Business buzzwords: Do executives need to outgrow them?

This oversight is emblematic of a broader trend within India Inc, whose executives often exhibit a fixation with trending topics and buzzwords, akin to children gravitating towards shiny new toys. From strategy and sustainability to ESG and AI, from purpose and people to pivot and profit, from good-to-great to governance, the rush to adopt buzzworthy concepts reflects not only a desire to stay relevant, but also assume membership of a club that’s ‘with it.’ Given the disproportionate representation of men in leadership roles and C-suite positions, it can aptly be called a phenomenon of ‘boys and toys.’

A fixation with jargon that sounds aligned with the next big thing has a downside, however. If it acts as a distraction, which it very well could when buzzwords are used only as a signalling device, it could get in the way of reflection on the true relevance or impact of what’s being spoken about. Worse, CXOs attention could be diverted from the core purpose of their organizations. A preoccupation with buzzwords can lead to a disconnect between strategic initiatives and operational realities, hindering meaningful progress and alignment with the organization’s overarching mission. It’s crucial for CXOs to maintain a clear focus on their organizational purpose amid all the buzz, ensuring that their efforts are directed at creating long-term value.

Hashtag frenzy: Corporate India often showcases trending hashtags as its current drive to project an image of competitiveness and innovation (and thus market valuation gains), yet frequently falls short in implementing adequate backend measures or ensuring a comprehensive discussion of these topics across the company. This superficial approach results in a disconnect between the outward image of being at the forefront of trends and substantive internal measures. It also exacerbates employee dissonance and disengagement. Companies should invest in education and training programmes to equip employees with the knowledge and skills needed to navigate emerging trends effectively. Without adequate learning initiatives and meaningful dialogue around these topics, employees may feel alienated from the business’s purported mission, leading to a slump in morale and productivity. Companies must move beyond mere lip service and cultivate a culture of genuine engagement. To best leverage the potential of emerging innovations, they should foster a sense of unity and purpose among their people.

The AI eclipse: Amid the AI buzz, it seems that India Inc has momentarily shifted focus away from critical issues such as environmental sustainability, social responsibility, climate action, the future of work (and work of the future) and board stewardship. Initiatives like ESG and climate commitments have been somewhat overshadowed by the AI frenzy. While AI holds undeniable potential, firms neglect these broader imperatives at their own peril. Boards must maintain a balanced perspective, ensuring that investments in AI are accompanied by steadfast commitments to ESG principles, net zero initiatives and sustainable business practices.

The challenge is even more pronounced for CEOs. In the past decade, they pursued digital transformation, often conflating it with technology. This confusion was evident in how chief digital officers were hired. It took considerable time and internal debates over the need for younger talent became organizational distractions. What’s more, there was a failure to grasp that emerging technologies in the Fourth Industrial Revolution era transcend fixed physical infrastructure. Today, data resides in the cloud, rendering server rooms obsolete.

Additionally, companies chased the mirage of governance improvement, with many claiming to have enhanced their practices. Yet, board independence remains a question mark, while diversity (including gender) is below par. In corporate India, it’s rare for a CEO to be relieved of duties due to poor performance or for a board to be dismissed for governance failures. This illustrates how Indian businesses grapple with the latest buzzwords. For a compensation hike, presenting a 'new strategy' centred around AI often suffices, leaving many in the dark about its intricacies. Consequently, the average tenure of CEOs and other CXOs is decreasing, leading to a surge in CEO pay as companies strive to retain leadership stability. Yet, many potential candidates exploit the current buzzwords to their advantage.

Boards often seem to forget that the Indian economy has been on a growth path for many years. Policy consistency and regulatory stability have played roles in this. These have been the wind beneath corporate wings for business growth. As companies ride the wave of Indian prosperity, they must recognize the indispensable role of capable leaders in steering them towards success.

Neglecting the broader implications of our buzzword fixation can have far-reaching consequences. It risks fostering a shallow culture of short-term thinking, stifling innovation and hindering competitiveness. Moreover, neglecting core values and societal imperatives can erode trust among stakeholders and undermine long-term sustainability.