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India The New Ethos of Corporate Leadership Presentation of Findings

India The New Ethos of Corporate Leadership Presentation of Findings. Agenda. Overview: Where did we start from? Project Scope and Process Research Methodology Empirical Findings Competency Models International Comparisons Sector Analysis Scenario Analysis Motive, Styles and Climate.

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India The New Ethos of Corporate Leadership Presentation of Findings

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  1. India The New Ethos of Corporate Leadership Presentation of Findings

  2. Agenda • Overview: • Where did we start from? • Project Scope and Process • Research Methodology • Empirical Findings • Competency Models • International Comparisons • Sector Analysis • Scenario Analysis • Motive, Styles and Climate

  3. Process re-engineering • Matrix relations • “Atomisation” • Decentralisation • It-enabled services • “Bottom-of-pyramid” • Cost--competition • “World-Class” Organizational Structure/ Job Design Revenue, Profit, Stockholder Value Products & Services People/ Competencies Organizational Climate Business Strategy • Focus on Core Business • Consolidation • Technology-Enablement • Customer focus Policies, Procedures, Leadership Behavior Who’s going to create the conditions for success? Where we started from... Adaptation Coordination Output External Environment • World-at-risk • Geo-political dynamics • Globalization • Political Imbalance • Poverty • Infrastructure • Health • Literacy • Environment • Fiscal Deficit • Performance Standards

  4. India’s Vision A Developed India by 2020, or even earlier, is not a dream. It need not even be a mere vision in the minds of many Indians. It is a mission we can all take up - and succeed. President APJ Abdul Kalam

  5. What are the Challenges India faces? • Social/ Environmental: • Healthcare • Education • Population • Pollution • Economic/ Industrial: • Globalisation • Fiscal Deficit • Performance Standards • Productivity • Infrastructure • Labour Laws India’s Challenges • Political/ Government: • Conflicting interests/ Instability • Bureaucracy • Corruption • Slow pace of reforms • Regional Imbalances • International • Geo-political tension • Cross-border terrorism

  6. Competitive Advantages Large availability of scientists and engineers, Strong potential for “Catch-up” growth, Easy access to credit, Low exchange rate premium, Strong IT training and education, Local availability of information technology services, and government success in ICT promotion, Quality of management schools India’s Competitive Advantages and Disadvantages According to World Competitiveness Report 2001... Competitive Disadvantages • Lack of access to foreign capital markets, • High average tariff rate, • Stringent hiring and firing practices • High government deficit, • Extensive distortive government subsidies • Permits and time taken to start a firm, • Large-scale irregular payments in tax collection and government procurement

  7. Economic Growth Reducing Fiscal Budget: Disinvestments in public sector Closing down loss making public sector units Reducing subsidies Reducing the size of bureaucracy Reducing infrastructure expenditure by State Further opening up economy for trade and FDIs Reducing tariff Reforms in labour and exit policies Commercialise infrastructure sector Improving infrastructure in coastal areas and Gangetic Valley Human Development Healthcare: Increase spending to 3% to GNP Create awareness Political will and private sector support Improve grass-root level services Leverage IT Education: Increase to 5% to GNP Follow Best Practices and incentivize stakeholders Political will and private sector support Improve grass-root level education Leverage IT The strategies India must adopt to realise its Vision according to Centre for International Development at Harvard...

  8. Research Methodology

  9. Project Scope and Process This is where we are today... Step 1. Research and Planning Step 2. Instrumentation Step 3. Data Collection Step 4. Coding and Concept Formation Step 5. Validation • Objective • To fine tune the project plan and communication strategy • Objective • To administer instruments to the sample of CEOs which provide an in-depth understanding of their motives, values, emotional intelligence, leadership styles and the climate they create at the work place • Objective • To collect rich behavioural data from multiple sources, including the CEOs, government, other industry leaders, media, academicians, etc. • Objective • To analyse and code the data collected using our Generic Dictionary and Global Data Base • To develop the competency model and dictionary which characterises outstanding leadership in India • Objective • To collect data and validate the competency model

  10. Research and PlanningClear Sampling Criteria were identified... • For BEIs and Industry Panels: • Cross Industry • Cross Ownership Patterns • Consistent Financial Performance • Evidence of Social Contribution • No Evidence of “Controversy” • For Media and Academic Panel: • Thought Leadership • Reputation

  11. Research and PlanningDetailed Economic Analysis was carried out: • Performance of both public and private sector organizations analysed over the past 3 years using: • Annual Turnover • Profit After Tax • Earnings per Share • Sources: • Business Journals and Newspapers

  12. IOC ONGC SBI BPC BHEL GAIL NALCO Neyvelli Lignite Container Corporation RCF Hindustan Newsprint SAIL Power Grid HAL BEL NTPC NHPC RITES Indian Airlines AAI Corporation Bank Shipping Corporation MTNL Scooters India Research and PlanningThe following public sector organizations were identified...

  13. Infosys Technologies Wipro Tata Sons Reliance Industries AV Birla Group Bajaj Auto Bharti Telecom ICICI Mahindra & Mahindra Dr Reddy’s Lab Jet Airways L&T HDFC HLL Hero Honda TELCO Swaraj Mazda Titan ITC BSES Britannia Ranbaxy Mpshasis/ BFL Software Research and PlanningThe following private sector organizations were identified...

  14. Research and PlanningMore Industry Luminaries were identified.. • Gurucharan Das (Richardson & Hindustan / P&G) • Vaghul Narayan • S.M. Dutta • Kurien Varghese (Amul) • Sam Pitroda • P.M. Sinha • Captain Nair • Dr Nair (Ex HAL) • Rajendra Singh (Ex NTPC) • Mr Wadhawan (Ex PESB Chairman)

  15. Research and PlanningMembers from Media and Academics were identified for their unbiased perspectives... • Business Today (R Sukumar, Dy Editor, Delhi) • Business World (Indrajit Gupta, Sr Associate Editor, Mumbai) • Business India (Nazneen Karmali, Consulting Editor) • Business Standard (Dr Haseeb Drabu, National Editor) • CNBC (Govind Ethiraj) • Economic Times • Financial Express • PN Khandwalla (IIM) • Madhukar Shukla (XLRI) • Prof. A.H. Kalro (IIMK)

  16. Research and PlanningSelection Criteria for BEIs were identified... • For BEIs • Atleast 1 year on the job • Track record

  17. 21st Century Batteries (Mr Chandra Mohan) Punjab Tractors (Mr. Yash Mahajan) Hindustan Levers (Mr Keki Dadiseth) Hindustan Levers (Mr M.S. Banga) Harvard Business School (Mr V. Kasturi Rangan) IBM (Mr Ravi Marwaha) ICI (Mr Aditya Narayan) TISCO (Dr J.J. Irani) Titan (Mr Xerxes Desai) Mphasis (Mr. Jerry Rao) Infosys (Mr N.R. Narayan Murthy) ICICI (Mr K.V. Kamath) Telco (Mr Ravi Kant) HDFC (Mr Deepak Parekh) ITC (Mr Y.C. Deveshwar) L&T (Mr. A.M. Naik) Data CollectionFinally 16 CEOs from Private Sector participated...

  18. IOC (Mr M.A. Pathan) NTPC (Mr. C.P. Jain) Corporation Bank (Mr. K. Cherian Varghese) Shipping Corporation of India (Mr. P.K. Srivastava) BHEL (Mr K.G. Ramachandran) Power Grid Corporation (Mr. R.P. Singh) Bharat Electronics Limited (Dr. V.K. Koshy) IPCL (Mr Ramanathan) GAIL (Mr C.R. Prasad) Hindustan Paper Corporation Limited (Mr Raji Philip) BPCL (Mr U. Sundararajan) ONGC (Mr. B.C. Bora) National Hydroelectric Power Corporation (Mr. Y. Prasad) AAI (Mr. D.V. Gupta) Scooters India Limted (Dr. A. Sahay) Rashtriya Chemicals and Fertilizers (Mr. D.K. Varma) Data CollectionFinally 16 CEOs from Public Sector participated...

  19. From the Media: Mr Indrajit Gupta (Business World) Mr. Govind Ethiraj (CNBC) Ms Sudeshna Sen (Economic Times) Mr R. Sukumar (Business Today) From the Academics: Dr Pankaj Ghemawat (Harvard Business School) Dr. P.N. Khandwalla (Ex IIMA) Dr A.H. Kalro (IIMK) Dr Madhukar Shukla (XLRI) From the Government: Dr Raja Ramanna (MP, Rajya Sabha) Mr T.K.A Nair (Chairman PESB) Mr A.C. Wadhawan (Ex PESB) Mr Buch (PESB) Mr R.S.S.L.N Bhaskaradu (PESB) From the Industry: Mr P.M. Sinha (Ex Pepsi) Mr M.B. Lal (HPCL) Mr M.S. Ramachandran (IOC) Mr Subir Raha (ONGC) Dr Kanan (IOC) Mr Subodh Bhargava (Ex CII, Eicher) Data CollectionData was collected from 4 other sources were conducted...

  20. Instrumentation DataPSE, MSI and OCS were administered on-line... • 8 CEOs responded to the PSEs • 9 CEOs responded to MSI and OCS • 23 direct subordinated gave feedback to the CEOs

  21. Coding and Concept Formation • The BEIs were coded against 22+ global competencies by accredited coders in Asia-Pacific • Global thought leaders have been approached to provide insights in data analysis: • Dr Nitin Nohria (Harvard Business School) • Dr Rakesh Khurana (Harvard Business School) • Dr Richard Hackman (Harvard University) • Jim Collins (Author of “Built to Last” and “Good to Great”) • Dr David Winter (University of Michigan) • A global team of Hay consultants from Asia, US, UK and Pacific UK are involved in concept formation, led by Signe Spencer (Author of “Competence at Work”) • Senior Leaders from the McClelland Centre including Dr Mary Fontaine and Dr Jim Burruss are adding insights to Concept Formation

  22. Validation • The competency model is to be calibrated after another round of one-one interviews, BEIs • The model will be validated in an expert panel • The final model is likely to be communicated in February

  23. The Ethos of Corporate Leadership in India Findings from an Empirical Study into the Profile of Indian CEO Competencies

  24. Indian CEO Competency ModelWhat are the personal characteristics of CEOs that distinguish superior performance in India?

  25. Indian CEO Competency Model…is made up of 4 key clusters BUSINESS EXCELLENCE MANAGING ENVIRONMENT INNER STRENGTH ENERGIZING THE TEAM

  26. Indian CEO Competency Model…and 11 competencies BUSINESS EXCELLENCE Adaptive ThinkingEntrepreneurial DrivePassion for Action MANAGING ENVIRONMENT NetworkingOrganizational AwarenessStakeholder Influence INNER STRENGTH Transcending SelfExecutive Maturity ENERGIZING THE TEAM Team LeadershipDriving ChangeEmpowering Others

  27. Cluster: Inner Strength • Transcending Self: Courageous dedication to the super-ordinate goals: doing what is right and what will make India great(level 2) • Executive Maturity: Emotional wisdom to respond to others and embody the aspirations of the organisation (level 2)

  28. Cluster: Inner StrengthIllustration: Transcending Self • Level 1:Belief • Inspires action by focussing on how organisation strategies contribute towards the larger well being of the nation or the welfare of the common public. • Inspires action by focussing on how organisation strategies contribute towards making India a great country. • Level 2: Ethics • The individual is ethical in his / her behaviour. Promotes similar behaviour in colleagues. • Acts with fairness, showing favor to no one.

  29. Cluster: Inner Strength Illustration: Transcending Self (Cont’d) • Level 3: Dedication • Acts from his / her conviction even if it leads to an uncomfortable situation. • Persists in working according to his/her conviction, against obstacles, discouragement from others, and other difficulties. • Is willing to spend considerable resources on projects of public good – for their own sake (beyond what is required or mandated). • Level 4: Courage • Shows the courage to do the “right” thing even in face of enormous undue external pressures / influence. • Is willing to stake his / her career or even life in doing the “right” thing. Trusts that

  30. Cluster: Business Excellence • Adaptive Thinking: Strategic insight into business, adapting methods and technology to the Indian situation and to address unmet needs (with a special focus on the Bottom of the Pyramid)(level 3) • Entrepreneurial Drive: Unleash the spirit of entrepreneurial and competitiveness to find new horizons of growth (level 3) • Passion for Action: Foresight plus fierce and unrelenting passion to take action now, to improve the future (level 3)

  31. Cluster: Business Excellence Illustration: Adaptive Thinking • Level 1: Understands the business • Has a complete understanding of how the business operates and makes money or delivers value to its stakeholders. Can describe this in simple terms to others. • Uses own understanding of the business to pinpoint priorities and actions needed to ensure efficient and profitable operation. • Level 2: Understands the environment in which the business operates • Formulates plans and approaches to maximise and leverage opportunities for the business, taking into consideration how best to meet customer needs and position the business against competitors in the sector. • Indian CEOs focus on how to leverage the most advantage from markets they serve by, for example, meeting the unexpressed or unmet needs of customers or end-users • Most, this involves focusing on how to harness the economic potential of selling to the “the bottom of the consumer pyramid” in India.

  32. Cluster: Business Excellence Illustration: Adaptive Thinking (Cont’d) • Level 3: Shows commercial dexterity • Uses innovative ideas or approaches to ensure business plans and strategies are profitable and viable in India. • If one method (manufacturing technique, source of capital, business practice….) does not work well here, finds or adapts another • For example, sources world class business practices and technology from any corner of the globe and identifies how to modify and successfully apply these to the prevailing conditions in India (e.g. social, political, environmental). • Level 4: New Strategic Insight • Modifies or redirects strategic efforts or forge a new set of strategic imperatives to ensure the organisation continues to prosper. • Redefines the organization’s business and direction, to respond effectively to the changing environment and opportunities.

  33. Cluster: Energizing the Team • Team Leadership: Inspire and protect their team, enabling excellent team performance (level 3) • Driving Change: Lead the organization to implement and embed sustainable change (level 3) • Empowering Others: Delegates authority to allow others to act with purpose and ownership (level 3)

  34. Cluster: Energizing the Team Illustration: Driving Change • Level 1: Planning the implementation of a change initiative • Once a need for change in the organisation’s strategy or activity has been identified, fully embraces and plans for the needed response. • Thinks through the potential pit falls and required steps to follow. • Identifies the required resources and key manpower to enlist in the delivery of the change strategy. • Level 2: Articulating the change vision or the new strategy • Communicates the vision for change to the organisation. • Conveys a compelling and enlightened message to the organisation that clearly articulates the change message. • Uses a variety to strategies and communication methods to get enrollment and support of the organisation for change. • Engages his her or her board and broader organisation in rising to the challenge of the new strategy. • Consistently communicates the change agenda at every opportunity. • Ensures that own behavior is consistent with the change message

  35. Cluster: Energizing the Team Illustration: Driving Change (Cont’d) • Level 3: Taking action to cement the change • Sets up internal systems and processes that support the change. • May build organisational capability through training and development practices, recruitment, , • Initiates or supports the set up and inculcation of key systems (SAP, HR systems, purchasing systems etc.) to ensure the change is implemented internally. • Level 4: Makes change public • Takes calculated actions to ensure the larger community adopts or supports the change initiative. • These actions ‘burn the bridges’ so there is no going back. • May use the press, ministers, or other community figures to send the message to the broader community.

  36. Cluster: Managing the Environment • Networking: Reaches out to an extensive network for ideas and problem-solving (level 2) • Organisational Awareness: Understand how things get decided and done in a particular organization (level 2) • Stakeholder Influence: Uses customised strategies to influence specific stakeholders (level 2)

  37. Cluster: Managing the Environment Illustration: Networking • Level 1: Looks upward • Continuously updates and seeks help from superiors or key people in superior formations (e.g. government ministries). • Level 2: Looking outside • Seeking out and talk with people in business closely related to their own • Key customers • Suppliers • Business associates • Former colleagues • Colleagues far removed in the organisational hierarchy

  38. Cluster: Managing the Environment Illustration: Networking (Cont’d) • Level 3: Going to sources that are not obvious • Seeking out information or seeking help from persons / agencies not obviously connected with the business inside the country. These may include academics, people in other industries, people in government ministries other than the one most connected to the leader’s business. • Level 4: Going abroad • Seeking out information or seeking help from persons / agencies not obviously connected with the business outside the country. These include embassies, foreign academics, businesses in other countries. These contacts are used to gain perspective on business practices, form alliances or joint ventures, supply materials or equipment, or to provide entrance to a distant market.

  39. Algorithm: Formula for Success • At least 6 out of 11 competencies at or above the target level • Competencies should be spread over at least 3 or 4 clusters • The CEO must have at least one super strength with one competency at level 4 This formula will predict success in at least 75% of cases

  40. Prevalence of CompetenciesAs a group, how many of the CEOs consistently show the competencies at a level where they are adding value to their organizations?

  41. Prevalence of Indian CEO competencies % of Outstanding CEOs at target level 100 Inner Strength Business Excellence Energizing The Team Manage The Environment 80 60 40 20 0 Transcending Self Executive Maturity Adaptive Thinking Entrepreneurial Drive Passion For Action Team Leadership Driving Change Empowering Networking Organisational Awareness Stakeholder Management

  42. What do the patterns suggest? • Overall, the CEOs show clear strengths across all 4 clusters: • When leading the team, the CEOs tend to use Driving Change • When managing the business, the CEOs tend to use their Entrepreneurial Drive and Adaptive Thinking

  43. International Comparisons • Inner Strength is unique to India • Managing the Business has a uniquely Indian content and focus (bottom of the pyramid and adapting technology) • Other clusters are comparable to CEOs in other cultures • Indian CEOs don’t use insight into individuals to “get the right person for the right job” (Potential Insight)

  44. Sector Analysis:Are different competencies appearing or adding value in different sectors?

  45. Percentage of CEOs meeting the target level

  46. Statistically Significance Differences between Public Sector and Private Sector CEOs • Public Sector CEOs are significantly more EmpoweringOthers than Private Sector CEOs (p=0.003) • Public Sector CEOs are Energising their Team more (p=0.07) • Public Sector CEOs demonstrate higher levels of Transcending Self (p = 0.06)

  47. Situational Analysis:Are different competencies appearing or adding value in different situations?

  48. Method, Step 1 • Group Events from Behavioral Event Interviews: • Building up existing business (Horizon 1) • Turnaround • Start-up a new business operation (Horizon 2) • Lobbying

  49. Method, Step 2 • Within each group of stories, we sorted by the outcome: • clear, strong (quantitative) success • partial success • little or no success

  50. Method, Step 3 • Within each group, we looked for patterns contrasting the more successful with the less successful stories • baseline (shared by most stories) • added value (appears more in the most successful stories) • counterproductive (appears in less successful stories only)

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