Sustaining talent practices crucial to organizational growth, success: KPMG

India continues to excel in visionary and strategic leadership and financial management, according to KPMG’s Management Capability Index

Photo: iStock
Photo: iStock

KPMG in collaboration with AIMA (All India Management Association) presented the fourth edition of the Management Capability Index (MCI) India 2016 survey—a leading research on the progressive capability of organizations. MCI, a comprehensive measure, helps professionals evaluate their business performance and identify growth indicators.

MCI is computed by using 10 fundamental drivers. This year, KPMG saw 600 responses (506 from the senior leadership band). Responses were spread over many industries, including automobiles, BFSI (banking, financial services and insurance), manufacturing, IT, consumer business, life sciences, education, professional services and the energy sector, to name a few.

This year, the MCI score has taken a drastic leap and stands at 75.5%. Compared to the MCI 2014 scores (66.4%), there has been a major rise in organizational performance and results (79.3), highlighting an overall rise in profit performance and revenue.

India continues to excel in visionary and strategic leadership (76.0%), and financial management (78.6%). The organizational capability scores (67.4%) saw a decline from the 2014 MCI score (69.2%), suggesting the need to invest sufficient amount of time and resources in talent development initiatives.

Although people leadership scores continued to rise, professionals should work towards building a sustainable talent pipeline. Investing in leadership development initiatives that are essential to organizational growth should be regarded as one of the primary objectives.

About Management Capability Index

The MCI is a comprehensive measure to help firms gauge the effectiveness and growth of their business performance by benchmarking their management practices against those of their competitors and similar organizations. This year, KPMG received a staggering response from 506 participants across India.

The Indian economy is gearing towards an accelerated growth path and organizations need to be at the forefront of driving this change. Today, India is one of the fastest growing talent markets in the world, where organizations operate in an environment that requires constant adaptation of their leadership and talent strategies. Organizations that are adept at thriving in such a dynamic environment will be better positioned to excel in today’s changing world and reduce the gap between growing industry needs and HR capabilities.

Today, management capability assumes an imperative role, where organizations have become more equipped for driving business results and improving capability at different levels. Management capability is growing in all spheres and professionals are being increasingly recognized for their business acumen and skills for identifying, creating and sustaining competitive advantage. The report examines in detail, the 10 pillars of management capability and attempts to highlight the level of maturity of companies across these key dimensions.

The findings of the survey reveal that there is a lack of structured learning initiatives to help organizations build their capability and invest sufficient amount of time in leadership development and talent development. Firms need to focus on succession planning and building robust talent retention strategies to thrive in such a competitive environment. Sustaining such talent practices is crucial to organizational growth and success.

Business performance, organizational capability and certain leadership competencies are some of the key indicators of management capability. This report uses 10 fundamental drivers of management capabilities, identified after research and analysis, to compute the Management Capability Index. The findings of this report not only helps organizations benchmark their management capabilities, but also highlights their potential growth indicators and future developmental opportunities.

Participants rated the questions for all dimensions on a 6-point Likert scale, ranging from 0 to 5. The combined average rating given by respondents for each dimension has been converted into a score out of 100 for each dimension.