India’s Leadership Challenge

Interestingly enough, Accenture in its assessment of these businesses through a report called Indian Paths to Global Growth indicated in 2014 that while there was very high commitment from India Inc towards these businesses (92%), only 35% of them met their own revenue and profit targets while many of them struggled to survive. This data suggested that acquiring businesses and running them successfully are two different things entailing different sets of abilities. While the former requires business and financial acumen, later largely requires leadership skills and numbers clearly indicated our strength in one and a major challenge in another. Besides other things like our ability to innovate etc., Accenture report diagnosed leader’s readiness, credibility and cultural dimensions to be the key leadership challenges. Another report by Ivey Business Journal supported 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’. IBJ clearly suggests that there is a short supply of leadership capability. And by `head hunting’ these leaders at a heavy premium, businesses are not only destabilizing each other but are also escalating their own costs. Besides this, over the last few years, India’s leadership challenge was exposed far too often, in just too many ways whether it was politics, business or any other walk of life.

I often wondered about this leadership challenge and followed 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 profiles and discussions with the 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 Inc’s Leadership Challenges. I have broadly categorized them as Challenges in the Internal Environment and External. 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 so that we enrich our collective understanding of what’s happening around. I firmly believe that this collective wisdom will help us prepare ourselves better to meet our global aspirations.

As the name suggests, these challenges belong to the internal environment of a business. Operating styles, culture, business strategies, standardized practices etc. form this internal environment. Since this is a complex eco-system, external factors tend to dictate the internal environment but one could find that when consciously modified, these internal factors created businesses that stood out, that were exceptional. I have obviously generalised things to form my hypothesis but I am mindful that there will be exceptions. However, my experience suggests that these generalisations are reasonable and there will be most heads nodding in agreement than dissent. Let’s look at these factors closely.

Primary consideration at the bottom of the pyramid is security, survival; making money. Predictably then strategic leadership shifted its attention towards monitoring, cost controls, consolidation, restructuring or somehow earning a quick return on the capital employed. Operations leadership got preoccupied with maximizing output with minimum input across all asset classes bringing in rigidity. Money and tangible outcomes became the key driver. With that the style of operation became dominion oriented, wielding power over others became success mantra which reduced people’s engagement with their workplaces and even they started working only for money. Recently a mere 5% or so drop in the quarterly profit made an MD of a leading IT company shake up the top management resulting into a few exits.

Leader’s ambition is the instrument of growth in most cases. Past performance, ambitions create hungry for growth in leaders who seek power and keep it concentrated. They end up creating mercenary organizations where the sole purpose is to somehow grow and become commercially successful. At times, these leaders get so hungry and ambitious that they spread themselves thin by overdrawing from the market on the back of wonky projections and fail to get their assets to repay in time, cook up their books, burden internal systems so much that they start collapsing, sell what you don’t have, make unreasonable promises, bend over backward and worst of all compromise morality. Growth creates such a sense of power that actually makes one blind.

As a matter of fact, when businesses obsess over survival and growth, they tend to lose sight of their real vision, purpose and identity. Survival and growth oriented leaders often confuse vision for goals. And because vision is not clear, the purpose is neither ennobling nor inspiring; they fail to meaningfully engage their constituents, particularly employees. It is the calling, meaning and high purpose at the peak of the pyramid. Transformation takes place at the peak of the pyramid, nowhere else. We all want to do something bigger than ourselves, something great in our lives, we are looking for such causes we could associate with, we attempt doing good things in small proportions around but if business leaders could build that `noble good’ in their business vision, they are instantly able to elevate their people to higher levels of intrinsic motivation; at the top of the pyramid.

Thus, organizations that fail to shift their focus from short term to long term, organizations that fail to appreciate the intangibles along-with tangibles or not be results driven as well as be relationships centric, process driven while being caring, may not survive test of the time. This shift from being transactional to being transformational, from bottom of the pyramid to the peak of the pyramid is India’s biggest leadership challenge. This is a journey inside-out. This shift has to first take place in the mindset of our leaders.

I witnessed some interesting phenomenon. Many organizations built their competency frameworks bottom-up. Entry level competencies were identified first and a simple logical progression was applied as we got up the ladder. For instance, if communication was a competency identified, it was defined at various levels and applied to, let’s say, junior staff with level descriptor reading as `organizes thoughts and articulates in a manner that….’ The same competency was then applied to strategic leadership as `communicates unit/ function/ department strategy from time to time’. According to me, to have communication as a competency for that level itself is a path to failure.  In some other cases, competencies were unscientifically picked from an `off the shelf’ universal set of some consulting company by applying collective wisdom and best judgment. They were loosely validated using tools like BEI.

When competencies are attached to roles and when India Inc reports as high as 70% variation in what people write as role descriptor or job description and what they actually do, are those competencies realistic, idealistic or hypothetical? When job content is a largely a variable entity, if targets change six times a year, how could competencies hold much validity? We need to be mindful of the fact that competency concept was imported from that part of the world where job content is more or less a static entity which is not the case here. Sadly survival and growth oriented organizations didn’t have the time to do it right, they had to do it fast (`as of yesterday’ as the popular expression goes). They also had compulsions to show themselves as a part of/ replica of `that’.

Owing to the lack of clarity of its purpose, understanding of the real concept and it’s potential, competency assessments today have merely become tools to make operational decisions such as promotions, salary increments, transfers, deputations etc. It is time we did cost-benefit analysis of it and made bold decisions. Considering the overall cost in terms of its development, annual administration and the cost arising out of resultant impact such as attrition, replacement, low morale etc (if any), I believe this intervention is not just unviable but actually quite counter-productive in most cases; a reality no one would dare own up! I find HR departments first create processes that bleed organizations and then create more expensive ones to stop bleeding. Assessments bleed and engagement surveys and everything emanating from them are attempts to stop that bleeding.

In the 28 competency frameworks of small and large organizations including three of India’s top 10 business houses that I got an opportunity to work with, I distinctly remember thinking that it’s not worth the effort if we have communication, listening, team building, decision making, problem solving, commercial/ business acumen or even strategic thinking as competencies beyond middle management. These things should be a `given’ at strategic leadership. Such competencies at that level keep leaders stuck to operations excellence which may not help our cause of leadership development. They are about performance not about transformation. Sadly, since businesses have become mechanistic, most competency frameworks are built to address only current and occasionally future operational challenges and hence those skills. Further I feel a need to remind the readers that competencies are about differentiating behaviours not the common/ standardised behaviours for a grade/ level/ designation.

I have come to believe that leadership competencies should be linked to organization’s leadership philosophy and its core ideology; its ethos. Because that’s what top leaders ought to be focusing on primarily. Aspects such as being empathic, self aware, environmental sensing need to make their way into the list along-with strategy, problem solving etc without worrying whether or not they could be assessed/ measured and without worrying whether or not such behaviours would always lead to tangible commercial success. A deep look into your organization’s philosophy, ideology will provide the necessary conviction in having these as leadership competencies. There are some progressive Indian organizations already doing that. With that in place, we could say that we want all our top leaders to be problem solvers but only those who have empathy and environmental sensing make the cut because those are the real differentiators. Just having strategy and problem solving does not differentiate a potentially successful leader from a transformational one.

Centre for Creative Leadership recommends that leadership competencies are derived from business strategy, vision and organization’s leadership philosophy. `Derived from’ are the key words here. Daniel Goleman also indicates that 67% of leadership abilities are emotional abilities. Yet sadly they don’t make it to the list of leadership competencies simply because these things are difficult to measure. And what’s easy to measure is not the stuff leadership is made of.

Operationally, this is another big challenge. Competency frameworks are not adequate tools for leadership development. We have ended up calling managerial skills as leadership competencies and have ended up weakening our infrastructure for a meaningful development of leadership abilities.

In another case, there was this maintenance head of a big ticket appliances manufacturing plant. He always aspired to become the production head. Being the eldest child he always made sacrifices for his younger siblings, took up  a job after completing his diploma whereas he wanted to pursue engineering, financed his brother’s education, got his sisters married and married late. He buried his passion for dramatics and music. At work he could never ask anything for himself. In spite of being qualified in production engineering he contended with a job in maintenance department, always went out of his way to please his internal customer and got nothing in return, pushed his subordinates towards the roles they aspired for but could never make a strong pitch for his own aspirations. He feels like he is standing at the end of the tunnel.

Both these leaders were subjected to development centres, leadership education at ivy leagues etc with little change. Leader’s personality is a crucial but often overlooked aspect of leadership. What mettle leaders are made up of determines what they create. I came across many leaders with challenges related to the `issue of authority’ and low self esteem. This is one of the most common finding of our fraternity of behavioural process consultants. Yet there is no recognition of these challenges in India Inc and no focused effort to work with them. These things are overlooked by some of the leading coaching frameworks that only superficially focus on outcomes, turning a blind at the root cause.

Many leaders we worked with across levels could not confront or influence bigger leaders. Issue of authority is usually camouflaged as a social norm of `respect the seniors’. In reality, we project our primary system on to our seniors/ bosses/ teachers and create stereotypes. Those stereotypes drive our actions. So my boss is like my father who was always so critical of me, never appreciated anything good in me, made all choices for me and my boss does the same therefore I don’t get along, I don’t suggest, I don’t share ideas, I only do as he says. First leader in my examples had experienced a very troubled childhood and was so angry that he always manipulated people for his personal victories. He was a man on a mission who got his sense of power by making people feel powerless. This is an unconscious behavioural process that most people have no control over. Now if we coach this fellow to learn a new behaviour of talking politely, privately, asking questions in the spirit of inquiry etc , there is every likelihood that he is going to become more manipulative. Boss-subordinate relationship which is such an important aspect in organization’s success is as feudal as it was in the medieval times and transformation of this relationship is possible by working at the root cause, not at the symptoms.

I completely subscribe to the theory which states that 80% 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 even sexual abuse. This impacts self esteem. Unless consciously worked upon, they create a deficient thinking about self in most leaders affecting their leadership potential. In my coaching interventions I have met many leaders across levels who nursed such deficient self image. They were gripped by `do I really deserve this?’, `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 truth in a constructive manner. The second leader in my examples suffered this syndrome. Sadly this topic of leader’s self esteem is not even on anybody’s radars. Even psychologists have grossly ignored it. Except for the legendary work of Nathaniel Brandon, there is pretty much no one who has done much research and writing on the subject. I urge all leaders to read Brandon’s writing, particularly `Six Pillars of Self Esteem’.

Leaders with these challenges of their personality are seldom able to make best use of the tools and techniques they learn because hiding behind that well equipped exterior is something very fragile. These deep seated patterns are capable of making leaders incongruent, inauthentic, and political. Instead of owning these deficiencies and working on them, they try to fake optimism, confidence or disproportionate aggression, unreasonable valour and so on. Recognizing these patterns and changing them is another big leadership challenge. It is a treat to find leaders who wants to know such limiting patterns in self and work on them. And as of now Process Psychology based coaching is perhaps the only answer to unearthing such patterns and overcoming them.

External factors are more socio-cultural factors of Indian society at large that impact leadership behaviours. They are contextual factors that affect organization behaviour. Businesses can do very little about them directly.

In reality I have seen that such concepts, models and case study based leadership programs usually have limited use and relevance. They may suit those highly process driven mechanistic organizations that have grow by solving problems. Strategy, process efficiency, structural interventions, analytics, problem solving etc are their vehicles of growth and their leaders benefit greatly from those programs. Or it may help build leader’s world view, perspective, seeing the big picture, networking and building skills that I would like to call `managerial’. It is imprudent to universally apply this educational model. I have seen many a family owned businesses and MNCs use even their CEOs mostly operationally. Typically, family members would sit together and decide the real strategy with inputs from the internal reporting system and communicate it to the CEOs/ MDs for them to execute. A progressive family would at best do this in an inclusive manner. In case of MNCs, mostly their strategy gets exported from their global headquarter with leaders having at best only operational input. Indian businesses therefore are able to do very little justice to such education. In many cases such programs have reduced to being a part of Engagement, R & R strategy.

This challenge is further compounded by the fact that India Inc. does not recognize emotional universe at all. There is almost total rejection of the right brain in business, even in the so called creative businesses. People are advised to think dispassionately and not bring emotions to work, forgetting that intense emotions were behind the biggest achievements in the world whether it was the adventure of Columbus, Alexander or insult of Chanakya that created the first republic of India, agony of Mandela that created a rainbow nation, humiliation of Gandhi or pain experienced by Nobel laureate Mr Sathyarthi. Harvard professor Ranjay Gulati’s latest research indicates that 70% assets of Fortune 500 companies are relational assets built by affective abilities. But unfortunately, our myopia has blurred them out. A conscious balance of cognitive and affective abilities is essential in leadership. Business is a dynamic social phenomenon and there is no good reason for us to make it mechanistic.

These affective abilities are overlooked for two reasons. First because they are intangible, difficult to contain, measure and businesses don’t like anything ambiguous. Second because as Annie McKee of Teleos Leadership Institute states, `leadership abilities are linked to leader’s relational skills, self concept and the world view which are deep seeded’ and hence difficult to change. Since it is easier to learn cognitive abilities, tools & techniques than confronting behavioural patterns in self that are anyway non-measureable, there are very few takers for such leadership interventions that foster leader’s personal transformation. Annie McKee further asserts, `no significant business transformation is ever possible without leaders transforming themselves first’.

This bias in leadership education is a big leadership challenge.

I must however make a passing mention that some public sector companies and some Indian MNCs are a delightful exception to this phenomenon. In these companies, people are as important as process, they are allowed to bring their heart to work, they have a voice and are seldom penalized for having it. Businesses with such cultures, in my experience are far more innovative and resilient than others.

One of the pains JRD once expressed was that he was so busy building Air India that he never built knowledge of creating a successful airline business. Invaluable knowledge was not captured and passed on. In some strange way, business world still dwells in the `Shruti’ and `Smriti’ era. We don’t have a culture of documenting business history or corporate folklore. The art of storytelling, which was the central theme of passing on the wisdom through generations, has not been lost. Couple this with having no indigenous management or leadership research and you have a major challenge staring at you. The challenge of not having your own home grown leadership wisdom is forcing us to look westward and making us into a bad copy of the west.

The way information and knowledge is packaged and exported from the west is incredible. Since that import comes at a lower cost and faster pace, not many eastern industrial centres are investing in building their indigenous packages. Where developed, these packages are only consumed privately by those organizations or industry associations.

My sensibilities tell me that there is a distinct cultural tonality to Indian businesses and local stories, researches on leadership are long overdue. This lacuna has made us desperate enough to search modern day leadership wisdom in history and mythology by convicting characters like Rana Pratap, Ashoka, Shivaji, Rama, Krishna, Arjun, Chanakya etc to have foretold it all.

These and many examples such as these indicate to me that there is haste in applying western principles, models and practices to our businesses without due diligence or localization. I sense a need to stop copying the west. I have a sense that in times to come, west will be looking at us for answers, if they aren’t already. In some businesses pressure to copy west exists because all the financial, technological investment comes from there but do our leaders stand their ground, are they rooted in a healthy self esteem about their heritage?

Indigenous research will help India Inc. bring itself into its own alignment.  This will help restore some pride and create conviction about our own practices. It is time for us to nourish our roots of industrialization that were once soaked in patriotism. Political and business history of the last two hundred years does not make a sound case for us to follow them blindly.

We need to start looking within to find answers.

Job, in India, as in many other parts of the world, is still an economic phenomenon. 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 safety high, need for control acute and focus is only short term. Saving their job or maintaining employability is more important to them. While it ensures a steady 10-15% growth pa, most of them fail to set examples of inspirational leadership. At best they become `nice bosses’. 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 and meaningful or not many leaders have the courage join a fledgling business and turn it around.

Ultimately it is in organization’s best interest to invest in leadership development and using a right approach is second to none. Case study based approaches that accentuate cognitive intelligence have their place but their impact is limited to the opportunities leaders get to apply them. Leadership journey is a journey inside-out, not the other way. Self is the only tool a leader has, advocates Kouzes and Posner. So it is not about what one knows but who he is that really matters. Emotional intelligence and personal transformation based leadership programs have wider application than strategy and case study based cognitive ones. If Ranjay Gulati’s and Daniel Goleman’s researches are anything to go by, then they are strongly advocating affective skills, an area that is under-valued ignored in leadership development.

My wish for leaders at all levels is that they take a moment from their leadership chores and dive deep inside themselves and start impacting their surrounding with a renewed self awareness.