Walking the talk on leadership

Name the CEO who, within four years of taking charge, sold as many as 117 business units totalling one-fifth of his company's asset base.

Here's a clue: long after retirement, the CEO is still considered to be one of the most successful and charismatic corporate leaders in the world.

The answer: Jack Welch. His aggressive move to sell the prime symbols of the "old GE" had raised quite a few eyebrows in the early 1980s, but the creation of a "new GE" forced the same critics to sing paeans to Welch's creative destruction.

But one of the key reasons for Welch's success as a corporate leader was his ability to make his vision -- GE must change at the pace of the market -- the responsibility of his entire senior management team.

The same principle of leadership -- a fanatical focus on developing leaders -- applies even today.

Hewitt, which released its new study, titled Top companies for leaders in Asia Pacific -- 2003 on Wednesday, says CEOs spend more than a quarter of their time in developing leadership talent at all the top 10 companies, while this is the case in only 77 per cent of the other 193 companies named in the study.

Around 80 per cent of the top 10 (five Indian companies figured in the list) agree that their boards commit the necessary resources to develop leaders. The corresponding figure for other companies is 41 per cent.

Result: nine of the top 10 companies source their CEOs internally. They also groom 76 per cent of their total leadership internally, while other companies fill up to 41 per cent of their leadership roles with external hires.

This is important because it pays dividends for companies to invest in their high potential leaders, as they won't have to go outside the organisation to "buy" leaders later, which is an increasingly expensive and challenging proposition.

Eighty per cent of the top 10 companies use rotational assignments at least two-thirds of the time to develop their high potentials.

Dhruv Prakash, Hewitt practice leader, says no leadership development programme can succeed if there is no buy-in at the top. Organisations need to walk the talk and what's required is the culture, programme and practices.

Prakash gives the example of Goodlass Nerolac (incidentally, this company does not figure in the leadership list, showing  how tough the selection process was) where the executives have been given as many as 100 projects to work on to give the top management an idea about the strategic direction the company should take.

"Only a handful of these ideas will actually be implemented but what is more rewarding is that it helps build a leadership practice in the company," Prakash says.

Wipro, which figures on top of the Hewitt leadership list, has also formulated an enduring model to nurture tomorrow's leaders.

The company, which was the first to set up the People's Capability Maturing (PCM) model, believes mentoring is the key for developing one-of-a-kind leaders. A leadership programme based on general competency models can only help building clones.

GE, for example, invests over $1 billion worldwide in leadership programmes. Result: the company's boundaryless environment ensures that sales people share leads, engineers share technologies and people share ideas resulting in great innovations and a leadership culture.

Or, take the case of Infosys. The software major's leadership journey commences with the top management selecting a pool of high-potential candidates. The formal duration of the leadership journey is three years.

Each high-potential employee has one faculty member of the Infosys Leadership Institute assigned to him/her. The faculty member acts as a guide in the journey.

HR consultants like Prakash say leadership also requires integrity and risk-taking. Quite a few CEOs make the mistake of looking only at the mirror to get their decisions approved.

They must learn to surround themselves with people who are willing tell the truth, people who question and people who have the passion about the company.

One of the biggest myths about good leadership qualities is the need for an "angry" image -- the CEO must be a leader whose mood ranges from sour to apoplectic.

History tells us that such companies generally collapse under the weight of the ever-present threat of explosive anger.

The growing refrain is: if you believe fear is the electricity that powers your company, forget leadership practices and be prepared to live with a team of hangars-on.

Finally, what differentiates the men from the boys in leadership is eloquently described by Jim Collins, author of Good to Great.

One leader says: "I want to look from my porch, see the company as one of the great companies in the world someday, and be able to say 'I used to work there.'"

By contrast, there are other -- perhaps more charismatic ones -- whose greatness is proved when the company falls apart after they leave.

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