The Indian economy may be booming, but the country’s companies still don’t have enough leaders, say human resources (HR) consultants and executives at research firms.
The firms, they add, have no one but themselves to blame for this. “We don’t have bench strength; we don’t have leaders of the future,” said Rajan Srikanth, head of the Asia region for Mercer Human Resource Consulting, citing the problem he has often heard articulated by Indian firms. “This is a classic problem that comes from rapid growth and the hot talent market worsens it.”
The Indian economy grew by 9.2% in 2006-07 and estimates suggest that it will grow by at least 8.5% this year. Indian companies are growing their businesses in the country, and several are even growing internationally, through greenfield operations in some cases and acquisitions in others.
As the people running these firms begin to realize the difficulty of finding leaders to fuel this immediate growth, say experts, they are increasinglybeginning to think about where they will find the next generation of leaders who can help the company grow in the future.
Planning for the next generation of leaders “is a big topic of discussion these days,” said Deepak Gupta, country head and managing director of Korn/Ferry International, an executive search firm. And although “it has become an important enough topic, it is still a very sensitive one,” he added. That’s the consensus among most experts: Indian companies are happy about dealing with growth and talking about it; they behave differently when it comes to creating leaders.
Companies all over the world face similar problems, but India is unique according to the experts. Many Indian companies are still owned and managed by families and are waiting for the next generation to come up from within the family. The skills required to head a company has changed in the past few years, with senior executives of such companies now requiring some experience as to how business is done globally, apart from a good understanding of the domestic market.
Despite a growing convergence in the salaries of senior executives in India and in developed countries such as the US and the UK (at least as far as the better Indian companies are concerned), multinationals continue to lure Indian executives for overseas postings, making things a little more difficult for Indian companies hoping to find the next generation of leaders.
Companies in India have to do this quickly, said Srikanth because “they are running on thin ice.” These companies have “entrepreneurial leaders who inspired them with their head, heart and guts,” he added, but they do not groom the people who would lead the company after them.
As Indian firms increasingly focus on creating the next generation of leaders, demand for the services of HR consultants and executive search specialists is zooming. “India is our fastest-growing region,” said David Hui, the head of the financial services practice in the Asia Pacific region for Korn/Ferry. “It’s a very important market,” added the Hong Kong-based Hui, “so, I need to spend a lot of time here.”
Not all Indian firms have realized the importance of creating leaders for the future, said Prashant Srivastava, managing partner of Gallup India Pvt. Ltd, the Indian arm of the research firm that is now largely focused on employee engagement studies.
“Some of our leaders are still used to a less dynamic world, fairly known enemy, and hence they think they can drive it themselves. Whereas, now we are in an era where most of Indian companies are going global and global companies coming to India are faced with multifaceted challenges: multiple geographies, multiple legal systems, multiple competitions, multiple issues,” he said.
The best way to fight battles on multiple fronts is to have multiple leaders fight them, said Srivastava. “Now you can’t have one warrior, or one chieftain with all arms in his pouch, fighting the war or battle again. He has to become the mentor, the coach, the guide who sets the overall objective and then he has to create multiple leaders who fight their own wars rather than just supporting him for the wars.”