Corus acquisition by Tata Steel in 2006 was a trend setter in many ways. This was India’s first major overseas acquisition of that nature and stature. It announced India’s global aspiration to the world in no uncertain terms. While it took 15 years coming after opening our economy, after that landmark Corus acquisition, India Inc has consistently been acquiring businesses worth $ 6.25 billion per annum globally and has invested another $ 500 billion on international expansions in the same time period.
Interestingly enough, Accenture in its assessment of these businesses in their report called Indian Paths to Global Growth indicated that while there is very high commitment from India Inc towards these businesses (92%), only 35% of them met their own revenue and profit targets in this period and many of them are struggling to survive. This data clearly spells out one reality that acquiring businesses and running them successfully are two entirely different things and require completely different sets of abilities. While the former requires business and financial acumen, later largely requires leadership skills and numbers clearly indicate India Inc’s strength in the former and a major challenges in the later. Accenture report points to leader’s readiness, credibility and cultural dimensions. Ivey Business Journal supports this view saying `there is leadership talent deficit, experience deficit and there is also leadership talent war in India resulting in overall leadership capability deficit’. In the last few years, India’s leadership challenge was exposed far too often, in just too many ways whether it is politics, business or any other walk of life.
I have often wondered about this leadership challenge and observed this phenomenon with a spirit of enquiry to make some sense of it. I was fortunate to have had an opportunity to engage with clients who acquired businesses globally and struggled with them, as well with those who faced severe competition from international businesses domestically. Through years of these engagements, interaction with a lot of leaders, through the study of their psychometric profiling and discussions with my own fraternity of behavioural process consultants, I developed some understanding of this challenge. I intend to present it here in the form of my hypotheses. This is not a presentation of my diagnostic but only an articulation my understanding of India’s Leadership Challenges. I have broadly categorized them as Leadership Challenge on Business Side and on Behavioural Side. No way is this list complete; neither do I intend to convict India Inc or its people of having these challenges. I am only giving voice to my thoughts, my meaning making processes and encourage your thoughts in support or to counter mine so that we enrich our collective understanding of what’s happening around. I believe that this collective wisdom will help us prepare ourselves better to face any leadership challenge today or tomorrow.
Leadership Challenges on Business Side:
These are tough times for business owing to multiple factors with key focus on either survival or exponential growth. Post 1991, license raj businesses struggled to survive, new businesses emerged, created competition, global giants entered Indian markets, forced us to think differently and created challenges for scale and growth. Businesses faced polar challenges of survival and growth. Leadership style used in these polar conditions is typically common. It is dominated by optimization to save cost and control to manage chaos. Short term gains and tangible outcomes get precedence over long term interest and investment in intangibles. The whole organization starts operating at the bottom of the pyramid where strategic leadership shifts its attention towards monitoring, controls, consolidation, restructuring because they want quick returns on their capital employed. Operations leadership focuses on maximizing output with minimum input across all asset classes through command & control bringing in rigidity. Employees get either conformists or passive aggressive by working only for money, personal gains, take no risk, take no ownership, don’t innovate and wait to be told. Relationships in such organizations become transactional, at all levels. So strong is this transactional leadership syndrome that organizations invest millions in people processes such as engagement surveys, development centres, R & R etc and still not make employees feel valued, powerful and inspired. This is a huge area of challenge. Organizations that fail to make this transformation from focusing on short term to focusing on long term, focusing on tangibles to focusing on intangibles, being results driven to being relationships driven, from being process driven to being people driven, typically don’t survive beyond 40 years according to Arie De Geus, author of The Living Company. I have experienced a lot of Indian companies, both new and old, in this trap. This transition from transactional styles to transformational styles, from bottom of the pyramid to the peak of the pyramid, from focusing on tangibles to looking at intangibles is India’s biggest leadership challenge.
Second challenge is that traditionally in our country Intelligence has always been worshiped. Right from schooling to retirement, our entire system is designed to celebrate the conventional intelligence which is articulated in numbers. Perhaps, that’s the reason even Sachin & Dhoni felt a need to complete their graduations. Likewise in business, a lot of emphasis is given to strategic thinking, technical know-how and such other cognitive abilities. Leadership is largely attributed to left brain. If contents don’t include business strategy, strategic decision making, business modelling etc., those programs are looked down upon. Leaders spend millions on learning which businesses to invest in, which ones to sell, analytics and predictions, how to make decisions, how to intelligently handle situations, how to build business models, how is ZARA different from M&S as a case study etc. They feel great going to Ivy Leagues and burning mid night oil making presentations on strategy. In reality, these concepts and case study based leadership programs have very little relevance for them. As a matter of fact, they end up getting more confused about themselves and their roles. I have seen a multitude of family owned businesses, professionally managed Indian and MNCs not involving even CEOs in strategy. Typically family members would sit together and decide the real strategy with inputs from the internal reporting system and communicate it to the CEO/ MD for them to execute. At best they may do this in an inclusive and consultative atmosphere. In case of MNCs, mostly their India strategy comes imported from the parent company which is ushered in by the India CEO. So where do these leaders apply this Ivy League Leadership Education? Let’s understand clearly that these programs create better managers, not leaders at highest level of the enterprise.
This is only one side of the coin, though. On the other side, India Inc does not recognize emotional universe at all. There is almost an aversion to the right brain in business, even in so called creative fields such as entertainment and advertisement. I have experienced that commonly held belief about the word `emotion’ or `emotional’ is being vulnerable and more precisely crying and therefore weak. People are encouraged to think dispassionately and not bring emotions to work forgetting the fact that intense emotions were behind the biggest achievements in the world whether it was insult of Chanakya or humiliation of Gandhi or pain experienced by Nobel laureate Mr Sathyarthi. Working without the potential created by this emotional universe is working with only half our real potential and this half matters a lot in business.
This challenge is further compounded by India’s indifference towards any sort of solid leadership research. There isn’t any organized leadership research focus in India. There also is very little writing about India’s business history. It is only a recent trend that authors like Gita Piramal, Sharmila Kantha, Shyamal Majumdar have started sharing business stories that create a possibility for one to look for corporate history, study of leadership behaviour etc. India Inc follows the great Indian shruti and smriti tradition. Besides Tatas, not many other companies have a scribe entrusted with a responsibility of documenting business history. I believe that there is a distinct cultural tonality to Indian businesses and a local research on leadership behaviours will help a great deal. For instance, with all due respect to liberal western thoughts on managing people, Theory X type thinking has always been successful in India for good reasons. And this is so primarily because of the way most Indians are brought up. They are always told what to do unlike their western counterparts who start making their own choices from a very early age. The same behaviour pattern percolates in business world and we find most leaders either looking for directions themselves or securing their positions by developing proximity to bigger leaders in their pack.
On process side, one interesting phenomenon I observed in many companies is that competency frameworks are built bottom-up. Entry level competencies are identified first and a simple logical progression is applied as we go higher in the hierarchy. So for instance, if communication is a competency identified, it is defined at five levels and it is applied at level one to operations staff which reads something like `organizes thoughts and articulates in a manner that….’ and the same is also applied to strategic leadership with level description reading like `communicates unit/ function/ department strategy from time to time’. These competencies are randomly picked from a universal set of some international consulting company, by applying logic and best judgment. I think this approach is over-simplified and inappropriate. I can understand the reasons for this simplification but I don’t accept it as an appropriate approach for competency identification for leaders. CCL recommends that leadership competencies to be an outcome of business strategy, vision and organization’s leadership philosophy. It is not easy to find an organization that has used this approach. Further, Daniel Goleman indicates that 67% of leadership abilities are emotional abilities, yet they don’t make it to the list of leadership competencies. However, what’s worse is that many organizations are not even clear about the difference between a skill and competence. But they are hiring, evaluating, promoting etc based on a heady cocktail of skill and competence. Operationally, this is one of the big leadership challenges.
Now let’s look at Leadership Challenges on Behavioural Side:
Whether we like it, accept it or not, job is still an economic phenomenon in India. Most people, irrespective of their socio-economic backgrounds, look at jobs as a means of earning livelihood. There is a tendency of making career choices based on the earning potential of a profession. There is also a social status attached to jobs. Sadly career and professional choices are based mostly on bottom & middle of the pyramid thinking (money, survival, recognition, growth) not top of the pyramid thinking (calling, ennobling purpose, meaning etc). With economics in mind, leaders tend to only deliver transactional leadership. Their risk taking is low, need for protection, survival, growth are high that makes them guarded, risk averse and mediocre. Saving their job or maintaining employability is in focus. While it ensures that they grow steadily @ 10-15% pa, they fail to set examples of inspirational leadership. At best they become `nice bosses’ but that doesn’t mean they are good leaders. They have successful careers but they don’t touch too many hearts to compel people out of their comfort zones to achieve something extra ordinary.
Further in over hundreds of experiential interventions directed towards capability and culture building, I have observed that most leaders across levels have challenges related to issue of authority and self esteem. Most leaders we worked with across levels could not confront or influence bigger leaders. We shove this under the carpet of social norm of `respect the seniors’ but the real issue is projection. We project our primary system on to our leaders and create constraints for ourselves. This is an unconscious behavioural process that most leaders have no control over. I completely subscribe to the theory which hints that 85% of people in India have experienced some kind of abuse as children ranging from psychological rejection, `conditions of worth’ to physical (beating up by parents) and sexual abuse. This impacts the self esteem. Unless consciously worked upon, this creates a deficient thinking about self in most leaders affecting their leadership potential. In my coaching interventions I have met many leaders across levels who had `I am not good enough’ or `how could I’ or `what if’ syndromes coupled with all sorts of fears like that of failure, ridicule, rejection etc. With this on their mind, they are rarely in a position to speak their minds in a constructive manner.
Most of our behaviour is shaped by observing our parents and later other people we admire. Unfortunately, we don’t have too many leaders who have positive influence on the society or business that we could follow. Not much beyond a few opportunist film and sport stars, who are all mired in controversies, do we have to look up to. Last five years were particularly difficult when a lot of business leaders also got exposed for their wrong doings. Who are our role models and what kind of modelling they do? Who do we look up to, to draw inspiration from? There aren’t too many such people around and those who are looked up to are looked up to in spite of their dubious backgrounds. Recently, I remember feeling shocked when a politician was jailed for disproportionate accumulation of assets and thousands of supporters went agitating against the arrest not because they were contesting the judiciary for any processes flaws. They were up in arms because the leader who bestowed some special favours to most of them was arrested. Insane but real!
Lastly and importantly, for some reasons our business community shows more respect towards western thought over Indian ethos. India, like a lot of other industrial East Asian countries is getting swayed by the western influence, yet again. During colonial rule this happened by force but today there is a natural attraction towards it. Industrial manifestation of this is by way of over enthusiasm to accepting western models, concepts, frameworks without testing its relevance in Indian context. I know of a dozen big organizations where western ways of defining jobs, evaluating them and identifying & assessing competencies have failed miserably. There are a couple of primary reasons for this. First of all, the concept of job is very different in India and in western countries. There is hardly any ambiguous element to the job there, whereas in India even after defining it meticulously a large component of the job remains undefined or ambiguous. In many cases what’s written in the JD hardly matches what one does through the year. This happens because we are constantly fighting constraints while they are managing resources. Now, what are the chances that the attributes and parameters applied to job are valid if the definition itself is dynamic? Second of all, those western models and concepts are used in India without localizing to suit our context. Take for instance this European competency assessment company that employs Indian consultants to carry out their assessments met passive aggression from their assessees because all their tests had western characters and names. Plenty of people from my client organizations could not relate to those tests at all. They didn’t answer those tests whole-heartedly. When my clients shared this feedback with the assessment company and requested them to make necessary changes, the agency replied saying that those cases are controlled and documented centrally in their HQ as per international standards and that they did not have the freedom to even change the names of characters in those cases. Our assessees lost their interest moment they realized that it was about some Chris Shevelyov working for some Keneka Texas in Yorkshire. On the other hand, process owners in HR were quick in judging their own workforce and calling them duds. Implicit assumption is that if it is western it’s got to be good and our own people are not up to it. This gap is a common reality across industry, yet it is consciously unacknowledged primarily because commissioning and working with these consultants make HR representative’s bio data look very strong. Where else would one get international exposure sitting in India?
I understand that it is difficult to accept and digest the truth but it is even more difficult to speak it. It is easy to reject ideas and kill the messenger but it requires openness to introspect and explore, it required courage to accept the truth. I trust the reader has these abilities. It is only if we face these challenges head on, would we transform into an industrial superpower. Else we may just burn out enroute. I believe that India Inc is poised for a big leap. I see a tremendous potential in India story for we are the only country in the world to have highly talented and young workforce that has the whole world as its canvas. I wish for us to write stories of great successes, I wish for us to role model the global businesses, I wish for us to show the way in terms of morality and consciousness in business and take the burden off our vedic seers. We have the potential and the capability to do it. Do we have the will to face our deamons?
