Strategic Leadership Development: The New Frontier For Indian Firms
n today’s world, executive education basically means leadership training, as leadership is broadly integrated into all forms of executive education. But does leadership training ensure success at the top management team level, and therefore, successful organizations?
No one is willing to argue that leadership does not matter; that would be short-sighted indeed. However, leadership has become a catch-all term whose pervasiveness has robbed it of its true meaning; this is especially true in today’s fast-moving emerging markets. In conversations with CEOs and heads of HR at over 50 of India’s largest and most innovative firms, it is quite apparent that the Indian CXO1 community defines leadership in ways that push the bounds of traditional definitions offered by researchers and professionals in organizational behaviour or applied behavioural sciences. Indian senior executives cannot afford to invest in programs that take such a one-sided, individual-focused view on leadership; they are under pressure to make money today, tomorrow, the next day and next year! When the GDP is growing at a rate of almost 10 percent year over year, and firms stop to train their top managers, this training has to be multifaceted and practical enough to improve the manager’s ability to lead the firm in its quest to capture value in an increasingly competitive environment.
Top managers in leading Indian firms don’t speak about their leadership development needs in the way most universities, consulting firms or training organizations do. The leadership development needs for top managers are much more specific and linked to the firm’s bottom line. If India’s top firms are going to depend on executive development organizations to help shape their future leaders, these outfits will have to be at the forefront of research and teaching in six key areas of strategic leadership: (1) managing growth, (2) developing a global mindset, (3) developing and retaining talent, (4) developing strong fiscal management, (5) institutionalizing creativity, and (6) leading across an enterprise.
(1) Leading to manage growth
In the last five years, India’s GDP has been growing at a rate of 10 percent annually. As well, exports from Indian firms have doubled over the last five years. The forecasts are equally positive, with GDP, private consumption, investment growth and domestic demand all expected to grow a by slightly less than10 percent per year for the next 5 years. This explosive growth scenario generates two different views of leadership at the firm level. Some Indian executives actively take on a short horizon view: “Why do we have to worry about leadership when any mistakes or weaknesses are easily remedied by the growth in demand; if we take our critical leadership cadre away from the business of the day – the opportunity costs are unfathomable”. The longer horizon view is: “What if the economists are wrong and the growth scenario doesn’t pan out? What if the number of foreign entrants into the Indian market space creates a level of competitiveness that begins to counterbalance the benefits of growth?”
CEOs at India’s biggest firms take the second view. What happens when the economic boom begins to wind down? Will companies have leadership teams in place that know how to create growth opportunities in a leaner environment? Will Indian managers be able to effectively and efficiently compete against competitors to capture more of the markets in which they do business? In today’s high-growth environments, creating and capturing growth is a key leadership skill that many Indian leaders simply have not had the opportunity to develop. Leaders with this set of skills will be crucial to Indian corporations’ long-term success.
(2) Developing a global mindset is crucial to being a successful leader
For a little less than a decade, FDI inflows to India have been on a positive upswing. The biggest sources of FDI into India include Mauritius, Singapore, the U.S., the UK and the Netherlands. Indian managers are constantly being confronted by the challenge of working with partners who are much more globally experienced. Expatriates working in multinationals and Indian firms have almost always lived in multiple countries, have been able to speak more than a few languages, and have education bases that span the globe. These global managers often hold pivotal positions in their firms, and Indian CEOs realize that they depend on their advanced global mindset to drive growth not only in India but also outside India. In fact, in countries as far away as the U.S. and Canada, it is now becoming impossible to reach the senior management level without having lived and worked abroad for at least 3 years. The bar for leadership is going up – leaders must be global. To ensure that Indian companies have Indian managers with a global mindset, the companies will need to provide top managers with the training that enables them to think across country boundaries and cultures, to work in multi-cultural environments, to learn how to coexist with business realities that are often very different from the ones at home, and to understand organizational structures such as joint ventures and acquisitions, both very common in the global business scenario.