Anjali Bansal
The exponential growth in India has seen it emerge as one of the fastest growing economies in the world. However, this, coupled with the scarcity of talent, has resulted in a new challenge for companies—the issue of leadership development.
Successful leadership development strategies need to take potential leaders through a career path that addresses long-term company objectives, so that when succession planning is undertaken, there are already names on the list. But, for many Indian firms, this is a journey through uncharted territory.
Mobility conflict
Global leadership development requires identifying high potential talent, and then moving it through various roles and markets. This is a strategy that organizations such as Citigroup Inc., General Electric Co. and Unilever N.V. have successfully implemented across their businesses. However, currently in India, there is strong resistance to this requirement to be mobile, particularly at senior management levels, and there are several contributing factors.
For one, there are few countries at an equivalent growth stage. A direct fallout of this is an increase in the breadth of opportunity as well as compensation, and this is keeping people in India.
That said, the desire for international experience is still there at the mid-level, but again, no one wants to stay away for too long.
Thus, for companies entering new business areas, this conflict is reducing the number of opportunities through which they can expose people to the development process. The phenomenon has also led to a larger number of senior-level exits across multinational companies (MNCs), even at the country head level, with individuals wanting to stay in India rather than move overseas.
The country’s expanding global footprint has also created a strong need for diversity in leadership; whether it means rotating senior people overseas or bringing in overseas talent to senior management teams.
While Indian companies are at the beginning of the learning curve, it would serve them well to learn from the experiences of MNCs. Globally, there has been a rapid increase in, and cross-pollination of, individuals from diverse nationalities going into various leadership roles—Indra Nooyi, CEO at PepsiCo Inc., Klaus Kleinfeld, chief operating officer at Alcoa Inc., the US aluminium maker, and Martin Sullivan, CEO at American International Group Inc., to name a few.
Being a global company today means having people who embody this cross-pollination, whether they are directors of company boards or C-level management. Globally, this trend has taken a very long time to develop, and offers Indian firms the opportunity to accelerate leadership development to compete with those MNCs that are learning slowly, and painfully, what it means to be global.
There has also been a universal talent flow into the boardrooms of large companies. While at an early stage in India, globally, there is a great demand for directors who know the country.