Where are the leaders?
Realising 'right-fit' leaders are critical to sustaining growth,
companies scurry to build a robust leadership pipeline - and some of
them are succeeding.
Last year, software services firm Zensar Technologies carefully chose 400 of its employees to beef up its leadership pipeline. Among them, the age span was deliberately kept wide: the youngest had experience of four years while the senior-most in the group were of the level of vice president.
"Close to 10 per cent of the organisation must have the potential to rise to the level of Management Council at all times," says Ganesh Natarajan, Vice Chairman and CEO. This, he believes, is critical if the Pune-based company is to achieve its aim of doubling revenues - at Rs 1,000 crore today - by 2013.
The leadership pool target is as ambitious. "We are looking at a pool of 40-50 people by 2013. We already have 20-25 of them," says Natarajan. By 2013, Zensar will have more than 8,500 employees; it has 5,800 today.
As companies across India prepare themselves for scorching expansion, they have realised that success is possible only if they get leaders at multiple levels to drive that growth. The creme de la creme in Corporate India is, of course, ahead on the leadership development curve. Tata Sons has a slew of leadership programmes, including the famed TAS, formerly Tata Administrative Services, which has been running for over 50 years.
Hindustan Unilever has nurtured many of India's top leaders across sectors. Then there is Infosys and its leadership factory at Mysore. "What the biggies have achieved by way of creating tomorrow's leaders is being emulated by the companies next in line," says Dhritiman Chakraborty, Managing Director for India at Tower Watson, a global HR consultancy, pointing to the rush at Indian companies running leadership programmes.
What is the rush?
When Harvard Business Publishing recently surveyed 24 leading Indian companies to determine how learning and development priorities for 2010 had been impacted by the economic downturn, 88 per cent listed gaps in leadership practices as their top HR challenge. "The availability of talent in the market is not that big a concern. Availability of the right talent to meet strategic needs is an issue," says Vivek Chachra, its Director for Corporate Learning. But companies are being extremely prudent as they ratchet up their HR budgets. Take the instance of UST Global, an information technology services player that has 60 per cent of its workforce in India. The core of its growth strategy is built around its plans for leadership. "I believe in what one of my former bosses used to say - the best strategy for a business is to produce leaders faster than competitors," says Chief Strategy Officer Venky Rao. He should know: UST, which started with 14 people in 1999, just ahead of the Y2K bug scare, has grown to 7,500 people now.
Finding the right leaders could be even more challenging in the coming two years. To get to revenues of $1 billion by 2012, UST Global will need to increase staff strength to 25,000. To that end the company has developed what it calls "a HandPrint" model of leadership built around meeting client needs and strategic goals, the need to be agile and entrepreneurial, and the ability to deliver beyond contractual terms. The model is applicable to all employees. The learning modules are based on domain and profile, with the budget allocated for developing leaders set the highest. "Companies that miss the leadership development bus now will have a very tough time catching up with companies like us," says Rao.
Defining the right fit
If there is one favour that the downturn of 2008 and 2009 did to the industry, it was shaking the companies out of their stupor in so far as leadership hiring was concerned. A "Hire Now, Think Later" approach has now been replaced by "Think Now, Hire Later". In fact, companies have come through the last two years with a sharp definition of strategy and a much sharper definition of the kind of talent they need to succeed. "One of the good things that has happened after the downturn is that the haze around strategy and, more importantly, what kind of leaders we want is beginning to clear. In the last two years everybody has been forced to think about leadership definitions," says Chachra of Harvard Business Publishing.
For instance, the slowdown made it pretty obvious to the industry that it lacked leaders who could handle a downturn. Leaders growing a company have very different skills from those needed in a crisis. "We have growth harbingers, but the companies have been forced to think 'do we have a leadership mix that can handle turbulent times and dips in business and manage the risk, efficiency and the downside'," explains Chachra.
A company that has understood this lesson well is Bangalore's MindTree Consulting, an IT services firm. Vice Chairman Subroto Bagchi, who quaintly also adds Gardener to his title, asserts that the slowdown never had any impact on his company. This was largely due to the company's model of leadership: it believes in looking at the next crisis and dealing with it. So, how does MindTree prepare its leaders? "Prescription learning is no longer useful. What is needed are scenarios," says Bagchi.
In August 2009, Bagchi took a group of senior leaders to an offsite meeting at Pondicherry. The leaders were asked to line up on the beach at 6 a.m. There, they boarded a catamaran and were taken a mile out into the sea and thrown overboard (all under expert supervision, of course). Once the leaders got over their initial shock, they relaxed in the security of knowing that they had life jackets on. Even those who did not know swimming. Leadership is about preparing for unscripted events, says Bagchi.
While Bagchi's approach may seem extreme, talent experts agree that Asia's fast-paced growth and new models will require a new leadership style. Indranil Roy, who heads Leadership Consulting for Asia Pacific at Korn/Ferry International, puts this in perspective when he says that Asia's middle class spending is estimated to be 42 per cent of global spending by 2020 and 60 per cent by 2030, with China and India as top markets in the region. "The companies need to understand how to succeed in this environment. They need to be able to rethink their product positioning and to innovate closer to the customer. This new model of growth will require a new set of leadership style," says Roy.
Roy believes the new requirement of leaders will be in two categories: one, energisers who display social leadership with the ability to understand diversity. And, two, integrators who can put teams together. In Asia, says the Korn/Ferry executive, the best place to find this talent is India even though the immediate readiness of the senior talent pool to step into leadership roles is just eight per cent.
Challenges like these are pushing companies such as Dabur India to try new strategies. This summer, the company set about developing what it calls a leadership competency framework that will initially assess 50-60 top managers. Like several other companies in India, especially in consumer goods, the New Delhi-based firm is growing rapidly both organically and through acquisitions, the latest ones being in Turkey and the United States. Such expansion forces diversity challenges on the leadership. To face up, "we need to develop some kind of a standard language, a reference point and a framework to assess and develop leadership competency", says V. Krishnan, who heads HR at Dabur.
Grow, not buy
Lateral hiring, or hires from other companies at the same level, is increasingly being put on the backburner in favour of identifying future leaders from within the company. Automaker Mahindra & Mahindra prefers promotion of talent four times out of five, with just "20 per cent acquired for fresh blood and new thinking", according to Rajeev Dubey, who runs its HR.
At each of the eight levels in the organisation, 10-15 per cent employees are identified as leaders for the future. This translates into a leadership talent pool of close to 800, with some 150 at the top three levels of CEO, Senior Vice President and Senior General Manager. Still, admits Dubey: "We have potential in terms of leadership. What we lack is global experience."
Even in high-attrition industries such as information technology, the preference is for internal progression and rotation across functions. Prameela Kalive, Vice President for Zensar's business in India, West Asia and Africa, joined the company as Senior Project Manager after a stint at the Defence Research and Development Organisation. "The culture of the organisation is very flexible and open to looking at an individual's talent and not just qualification. The shifts that I have made with Zensar have all been crossfunctional - in software, sales, HR and strategy," she says.
And, it seems like it is working. While Zensar deals with attrition rates of 18 per cent across the company, it hardly loses people from its leadership programme. The attrition among the cherry-picked 400 is 1.5 to two per cent. "We rarely lose people at that level," says CEO Natarajan. As Indian companies climb the maturity curve, more companies will hope for similar results.
"Close to 10 per cent of the organisation must have the potential to rise to the level of Management Council at all times," says Ganesh Natarajan, Vice Chairman and CEO. This, he believes, is critical if the Pune-based company is to achieve its aim of doubling revenues - at Rs 1,000 crore today - by 2013.
The leadership pool target is as ambitious. "We are looking at a pool of 40-50 people by 2013. We already have 20-25 of them," says Natarajan. By 2013, Zensar will have more than 8,500 employees; it has 5,800 today.
Hindustan Unilever has nurtured many of India's top leaders across sectors. Then there is Infosys and its leadership factory at Mysore. "What the biggies have achieved by way of creating tomorrow's leaders is being emulated by the companies next in line," says Dhritiman Chakraborty, Managing Director for India at Tower Watson, a global HR consultancy, pointing to the rush at Indian companies running leadership programmes.
What is the rush?
When Harvard Business Publishing recently surveyed 24 leading Indian companies to determine how learning and development priorities for 2010 had been impacted by the economic downturn, 88 per cent listed gaps in leadership practices as their top HR challenge. "The availability of talent in the market is not that big a concern. Availability of the right talent to meet strategic needs is an issue," says Vivek Chachra, its Director for Corporate Learning. But companies are being extremely prudent as they ratchet up their HR budgets. Take the instance of UST Global, an information technology services player that has 60 per cent of its workforce in India. The core of its growth strategy is built around its plans for leadership. "I believe in what one of my former bosses used to say - the best strategy for a business is to produce leaders faster than competitors," says Chief Strategy Officer Venky Rao. He should know: UST, which started with 14 people in 1999, just ahead of the Y2K bug scare, has grown to 7,500 people now.
Finding the right leaders could be even more challenging in the coming two years. To get to revenues of $1 billion by 2012, UST Global will need to increase staff strength to 25,000. To that end the company has developed what it calls "a HandPrint" model of leadership built around meeting client needs and strategic goals, the need to be agile and entrepreneurial, and the ability to deliver beyond contractual terms. The model is applicable to all employees. The learning modules are based on domain and profile, with the budget allocated for developing leaders set the highest. "Companies that miss the leadership development bus now will have a very tough time catching up with companies like us," says Rao.
Defining the right fit
Vivek Chachra
For instance, the slowdown made it pretty obvious to the industry that it lacked leaders who could handle a downturn. Leaders growing a company have very different skills from those needed in a crisis. "We have growth harbingers, but the companies have been forced to think 'do we have a leadership mix that can handle turbulent times and dips in business and manage the risk, efficiency and the downside'," explains Chachra.
A company that has understood this lesson well is Bangalore's MindTree Consulting, an IT services firm. Vice Chairman Subroto Bagchi, who quaintly also adds Gardener to his title, asserts that the slowdown never had any impact on his company. This was largely due to the company's model of leadership: it believes in looking at the next crisis and dealing with it. So, how does MindTree prepare its leaders? "Prescription learning is no longer useful. What is needed are scenarios," says Bagchi.
In August 2009, Bagchi took a group of senior leaders to an offsite meeting at Pondicherry. The leaders were asked to line up on the beach at 6 a.m. There, they boarded a catamaran and were taken a mile out into the sea and thrown overboard (all under expert supervision, of course). Once the leaders got over their initial shock, they relaxed in the security of knowing that they had life jackets on. Even those who did not know swimming. Leadership is about preparing for unscripted events, says Bagchi.
Subroto Bagchi
Roy believes the new requirement of leaders will be in two categories: one, energisers who display social leadership with the ability to understand diversity. And, two, integrators who can put teams together. In Asia, says the Korn/Ferry executive, the best place to find this talent is India even though the immediate readiness of the senior talent pool to step into leadership roles is just eight per cent.
Build, not buy
Source: Harvard Business Publishing survey |
Grow, not buy
Lateral hiring, or hires from other companies at the same level, is increasingly being put on the backburner in favour of identifying future leaders from within the company. Automaker Mahindra & Mahindra prefers promotion of talent four times out of five, with just "20 per cent acquired for fresh blood and new thinking", according to Rajeev Dubey, who runs its HR.
At each of the eight levels in the organisation, 10-15 per cent employees are identified as leaders for the future. This translates into a leadership talent pool of close to 800, with some 150 at the top three levels of CEO, Senior Vice President and Senior General Manager. Still, admits Dubey: "We have potential in terms of leadership. What we lack is global experience."
Even in high-attrition industries such as information technology, the preference is for internal progression and rotation across functions. Prameela Kalive, Vice President for Zensar's business in India, West Asia and Africa, joined the company as Senior Project Manager after a stint at the Defence Research and Development Organisation. "The culture of the organisation is very flexible and open to looking at an individual's talent and not just qualification. The shifts that I have made with Zensar have all been crossfunctional - in software, sales, HR and strategy," she says.
And, it seems like it is working. While Zensar deals with attrition rates of 18 per cent across the company, it hardly loses people from its leadership programme. The attrition among the cherry-picked 400 is 1.5 to two per cent. "We rarely lose people at that level," says CEO Natarajan. As Indian companies climb the maturity curve, more companies will hope for similar results.
