Toward a Sound Leadership

India has witnessed unprecedented growth in the last decade, and, though a
much touted and celebrated fact, has led to some very interesting repercussions
on leadership development and talent management. Meet up with any CEO or C
suite member and you are likely to hear some, if not all of the following sound
bites:

Double-digit Growth: Our growth ambitions are outstripping our ability to
groom talent internally. We are not built to grow our talent pool fast enough to
feed our business growth.

Leadership Skills: We have solid technical capabilities; we just cant
convert enough of our technical leaders into business leaders.

Ageing Leaders: We have a strong leadership team at the top but half of them
will retire over the next 2 years. And we dont have enough emerging leaders to
replace them.

Expansion Woes: We are expanding regionally and globally. Where can we find
the talent to run cross-cultural operations? Our existing leaders dont have
cross-border experience.

Attracting Leaders: Our leadership team is strong, but they are being
targeted by new entrants. We are not a big enough brand to attract strong
leaders from outside.

Enabling Leaders: Given high competition for talent, we promoted employees
across levels but know that they are not performing at the senior levels.

Shweta Shukla senior consultant, Hewitt Associates

Keeping in mind economic and business factors, the need for developing
leaders in the IT/BPO industry context is only amplified manifold. Leadership
development today is not limited to only the evolved and established
organizations. In fact, newer and smaller firms are considering this as a
critical element of their human resources strategy.

Leadership Challenges

CEOs of IT/BPO companies participating in the Hewitt Best Employers study in
Apac and India views quality of leaders in an organization as the most
important factor affecting its success. While some benchmark leadership
practices come from this industry, it is also evident that the sector is facing
a heavy talent crunch especially in developing strong leaders at the middle
management level. There is a need to focus more on developing leaders in
managing global businesses and a diverse workforce, and developing leaders at
all levels. A lot of mergers and acquisition in the IT/BPO industry has lead to
managing and integrating cross-cultural teams very critical as well.

Today, these factors form the key judging parameters for leadersfrom
planning to executionand the ability to spearhead the organization in difficult
times with sound decision-making skills. Given that technological innovation and
understanding of customer needs go hand in hand, the industry needs to focus
more on developing strong business skills across different teams. The ability to
identify and develop an idea and take it to market is the key to becoming a
market leader. And the onus is really on the person at the helm leading the
organization to achieve its goals.

Research Findings

Inputs from more than fifty-five IT/BPO organizations as part of Hewitts
Best Employer Study in 2007 clearly highlights that providing a learning
environment with effective structure, processes, and systems in order to grow
the depth and quality of leaders is critical. The key insights from the study
indicate that putting in place a sound leadership strategy has elements of the
following:

Leadership Competency Framework

• A well-defined leadership competency framework forms the foundation of the
  leadership assessment and development processes. 75% organizations had defined
  leadership competency frameworks in place.
• The most frequent usage of leadership competencies is for selecting leaders
  from within the organizations as part of the performance assessment process, as
  well as for the succession planning process. However, the use of leadership
  competencies while determining base pay and incentives is fairly limited.

Key Leadership Characteristics

The top three most important leadership characteristics mentioned by
organizations include:

• Character/Integrity
• Champion of organizational culture
• Performance level

Leadership Development Practices

• Most IT and BPO Best Employer organizations have formal processes to manage
  leadership growth and development. 86% of organizations use internal leadership
  training, which is the most frequent leadership development process. External
  leadership training programs are used by 77% of the organizations, external
  degree programs are used by 63% of the organizations, and rotational and
  developmental assignments by 58% of the organizations.

Succession Planning

• 76% organizations have a formal succession planning process in place. All
  organizations utilize the succession management framework for annual talent
  reviews, as well as assessment of employees for advancement. Organizations also
  use the succession plan to review KRAs; and redefine them going forward.
• n The graph below shows that succession planning is primarily done for senior
  and middle management positions. This is a marked increment since previous
  years, indicating that organizations are moving toward creating a ready talent
  pipeline for key positions.

It is also interesting to observe that as high as 91% of participating
organizations incorporated ratings from their performance management process
into the succession planning process clearly indicating that sustained high
performance is one of the most critical factors which organizations in the IT/BPO
sector consider while planning their leadership pipeline.

Ownership of Leadership Development

While 23% of organizations believed it is HRs responsibility to develop best
practices for leaders, 25% believed that this was senior managements
imperative. Most (48%) organizations entrust their leadership/organizational
development team with this responsibility, clearly indicating that organizations
have a dedicated focus on leadership development and have put in place a
specific function to ensure that leadership development gets necessary focus and
attention.

In the Top Companies for Leaders study conducted by Hewitt, we looked at
how organizations are ensuring to build a steady pipeline of readily available
talent, and what processes are getting institutionalized to ensure this steady
supply of leaders. Four clear truths emerge from our study:

• Truth #1: Leaders Lead the Way: Leaders are passionate and visible with an
  unwavering commitment to leadership
• Truth #2: Unrelenting Focus on Talent: Intense focus on talent permeates
  all levels of the organization
• Truth #3: Practical and Aligned Programs and Practices: Business strategy
  is at the core of programs and practices
• Truth #4: Tipping Point: Leadership is a mind-set, a way of behaving, and
  it is ingrained in everything that an organization does.

One doesnt need to look far and insist on global benchmarks. Indias leading
IT and BPO companies have proven their sustainable success not through better
technology or financial reserves but through flawless execution of the above
truths. These organizations have built some landmark leadership practices and
have built a very strong leadership brand in the market. The best managed and
most successful Indian IT companies have set precedent for other organizations
aspiring to go global, with simple defined practices:

• Leadership culture which is continuously reinforced through established
  practices including strong focus on walking the talk and leading by example.

Senior Leadership and Board Members Involvement

• In one of the top companies, the CEO spends about 30% of his time on
  people-related issues and is the prime sponsor and driver of all leadership
  initiatives.
• The board holds an annual meeting, completely focused on the outcomes of
  this process and succession planning for critical positions. In addition, senior
  leaders serve as mentors and counselors, and hold mentoring sessions on a formal
  and informal basis
  
  
  
  
  

Strong External Focus

• Top companies display a strong external focus in developing leadership
  goals and the leadership development programs. Leaders performance is often
  benchmarked to performance of peers in competitor organizations, hence driving
  changes in the global environment and industry.
• In addition, key development programs involve interacting with people
  across industries and across the globe to provide exposure to business heads to
  strategic issues.

The talent war is far from over, and the Indian IT/BPO talent market
struggles to create the right pipeline. This creates a very critical need for
organizations to develop a compelling employer brand, the success of which is
heavily dependent on how well the leadership of the organization symbolizes this
brand. A company whose leadership embodies its unique brand will achieve
stronger market value than competitors. This quote from the book Leadership
Brand: Developing Customer-Focused Leaders to Drive Performance and Build
Lasting Value by Dave Ullrich and Norm Smallwood beautifully sums up the
linkage.

All organizations will go through peaks and troughs. However, it is the
ability to use both the phases as an opportunity to develop people, which
differentiate the organization. It is the ability to make the individual
development plan comes alive for every employee that builds credibility and
garners buy-in.