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Karl Slym (left), managing director at Tata Motors, Tony Fountain (centre), CEO of Reliance Industries’s refining business and Neil Mills (right), who till recently served as CEO of SpiceJet. Photos: Hemant Mishra and Pradeep Gaur for Mint, Luke MacGregor/Reuters. (Hemant Mishra and Pradeep Gaur for Mint, Luke MacGregor/Reuters.)
Karl Slym (left), managing director at Tata Motors, Tony Fountain (centre), CEO of Reliance Industries’s refining business and Neil Mills (right), who till recently served as CEO of SpiceJet. Photos: Hemant Mishra and Pradeep Gaur for Mint, Luke MacGregor/Reuters.

(Hemant Mishra and Pradeep Gaur for Mint, Luke MacGregor/Reuters.)

Going global for talent

Is there a dearth of leadership in India, forcing firms to shop abroad for talent?

The number of foreigners who have assumed key leadership positions in Indian companies has multiplied many times in the past couple of years. There are the likes of Karl Slym, managing director at Tata Motors Ltd; Israel Markov, chairman of Sun Pharmaceutical Industries Ltd; Gary Kenneth Toomey, who was recently appointed as the new chief executive officer of Jet Airways (India) Ltd; Tony Fountain, CEO of Reliance Industries Ltd’s refining business; and Neil Mills, who till recently served as CEO of SpiceJet Ltd. Is there a dearth of leadership in India, forcing firms to shop abroad for talent, or do foreign leaders bring in a fresh perspective to local businesses?

Wilfried Aulbur, managing partner at the Indian unit of Roland Berger Strategy Consultants

Recruitment of top leadership talent is one of the most important and challenging jobs of the supervisory board. Finding individuals with the right balance of industry and functional know-how (often in a global context), a proven track record of performance and a capability to gel with or fundamentally change the existing culture of a company is as important as it is difficult," says Wilfried Aulbur, managing partner at the Indian unit of consulting firm Roland Berger Strategy Consultants GmbH.

Aulbur, who works closely with automotive, engineered products and high technology firms, says many companies look globally for management talent as a natural fallout. “Boards take a ‘Best of Breed’ approach. Whenever the internal management bench is strong, they will be in the run for the top jobs and typically have a significant headstart. But they still need to prove their mettle against capable external candidates and sometimes these candidates can be a better option," he says. Prior to Roland Berger, Aulbur was the managing director and chief executive officer of Mercedes-Benz India Pvt. Ltd. “This is an approach that US companies have followed for some time and we are seeing more of this happen also from European companies, India is by no means an isolated case. We have witnessed already a significant number of Indian executives, who are very successful in overseas markets, notably the US, but also to an increasing degree in Europe," he says. Aulbur points out that as Indian companies grow and professionalize, they become more attractive for foreign talent and their need for management talent with substantial international exposure increases.

In addition, as industries move towards global competition, some companies may feel the need to leapfrog from a relatively sheltered competitive environment to a fiercely global competitive environment for which globally experienced executives can provide value, he says. “Current recruitment trends are hence a reflection of the increasing integration of Indian companies into the global economy and an increased attractiveness of Indian companies for foreign employees," Aulbur adds.

Yugesh Goutam, executive director (human resources, infrastructure sector) at RPG Enterprises

A reason why Indian companies scout for talent abroad is that when they try and benchmark themselves against the best practices of their global peers, they find that while they may have some of the best standards among Indian firms, they fall behind the curve when compared with global companies. It is not always possible for an Indian company to acquire a firm overseas for its superior processes and standards, and therefore, they tend to hire the professionals who have worked in these companies to facilitate a knowledge transfer.

Another reason is that when a company contemplates a succession strategy to fill leadership roles, they need someone to be a mentor to get the Indian professional ready for a leadership position. It is often beneficial to hire an expatriate professional for such a role since they come in for a time-bound contract, share their expertise quickly and exit the company. An Indian executive hired for a similar role may elongate the mentorship process due to vested interests.

The third point is that since a number of Indian companies are expanding into new regions, they prefer to have someone on their team who can interact with executives of a potential foreign partner in their language and context. This goes a long way in the successful conclusion of a deal.

Debashis Chatterjee, director at IIM Kozhikode

It is not possible to produce leaders in classrooms. They emerge with experience they gain by working in various geographical contexts. Expatriates are welcome to lead Indian companies as they come with such experience.

It makes sense for Indian companies like the Tata group to hire such managers as a significant portion of their revenue is derived from abroad. Indian business schools (B-schools) should orient their students to such diversified experience. Most schools are already doing this by offering opportunity for students to participate in exchange programmes with foreign universities.

But the challenge these schools face is lack of diversity in classrooms. Indians suffer from the classic middle-class syndrome, which causes insecurity and drives students to take up engineering and medical streams as their undergraduate majors. To produce better leaders, we need more diversity in classrooms.

Indian B-schools should work on a large ecology and not just on business accounting. They should stop imitating the Western B-school model blindly and start inculcating a sense of social community capital among its students. They should sensitize students to various aspects of India. For instance, IIM Kozhikode offers a course called social transformation in India. Only then can our B-schools provide true leaders.

India was under colonial rule for almost 200 years. The main objective of the British was to produce clerks. It is only after India got independence that we started looking for other jobs. But things are changing quickly. We will see a huge shift in the next 50 years.

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