Building leadership is a process. The process is followed strictly in most global multinational companies. Every organisation starts with a pool of talent, which it recruits either from educational institutions or laterally.
This first step is a vital one because people with the requisite abilities must be recruited. Is it technical skills you are looking for, do you want people with social skills or those who are all-rounders? If at the first stage you don't pick the right people from among whom the leader will emerge, it will create problems for the organisation in the future.
The next step is to make sure that people get the right opportunities. There should be no bias - gender or otherwise - while giving out assignments, and performance should be evaluated appropriately to build a meritocracy. If the mix is not right, the talent base that the organisation is building will be flawed. This hurts not only your employees but also the organisation. Most organisations have been trying to correct it. In the past, one reason for a skewed talent base could be the absence of both genders in equal numbers in the organisation.
The step after that is the evaluation of the talent pool, a process whereby you look at each person's ability to perform in a given role. Initially it is in the role that is laid out and then slowly after four to five years, in more challenging roles. At this stage, you can probably start picking out the leaders. If you have done this exercise thoroughly, by studying each individual's personality in the context of the organisation, you will see a leadership pool starting to emerge.
One thing we fail to do is train people properly... Nor do we tell them how they can improve... These are the twin challenges in training peopleTake, for example, the ability to deal with subordinates, peers and superiors. In the next five to seven years after the initial stage, you start looking at the individual's ability to deal with relationships outside the organisation - with customers, suppliers, shareholders, etc. At this stage you need to carry out, not only a 360-degree evaluation, but a 720-degree one.
Most organisations, at least in India, fail to give correct feedback to employees. Our style is non-confrontational. But there are ways in which you can give feedback which are not necessarily direct. That can be done through dialogue. But in most cases, no feedback at all is given. So a talent pool is formed, but there is a question mark about whether the right people have been inducted into it.
Often the pool is skewed because you have people in it who have not been fully evaluated nor given any feedback about themselves. That is happening in a lot of organisations. These organisations say: we are not seeing leaders emerge. My answer to that is: have you evaluated the pool properly over the years? Have you taken the pains of spending a few years creating it? It cannot be done at the last minute.
In India, we often talk about CEO succession. To me, that should be the last item in your agenda. Textbooks also make the mistake by saying the role of the CEO is to find his successor. They claim the role of the board is also to find a successor. My answer to that is the role of the organisation is to create a pool whose members can occupy various positions in the organisation. Leaders evolve from within as the organisation grows. If more opportunity is created, the organisation gets rejuvenated. That is the way to building leadership.
At different levels of the leadership pyramid, the attributes a leader needs to have are not necessarily the same. The leader who is handling a small group of people within the organisation faces challenges very different from those confronted by a leader who is handling multiple businesses which are outward facing. I feel that one important thing we fail to do is to train people properly to do what is expected of them. Nor do we tell them how they can improve. We presume they will do so on their own. These are the twin challenges of the process of training people. Often the individual is not aware he needs training or he does not believe that the training is required. The organisation also lacks the training and other tools needed to correct the flaws in a person. And that becomes a challenge in terms of further growth. You need to have appropriate training and hand holding of a person to make sure that he grows in a particular role, understands the role and executes the role effectively, at whatever level it may be.
In modern business parlance of the West, the word 'coaching' is regularly used. But I think that in India the word is not understood. If you tell a person he or she needs to be coached, he will misunderstand and think he is being told he is not good enough. Here people start with the presumption that they know everything. I guess coaching at various stages will become more acceptable in the future.
A smart organisation or leader makes sure that where there is a weakness in a subordinate, it is compensated by somebody strongerHistorically, to pick leaders, you looked at whether they had certain attributes. How does this person build relationships, what is his attitude and approach to people, how does he deal with his subordinates, peers and superiors? How do you expect the person to deal with the board or the world outside? Then there are the characteristics which define his ability to think. I think in the last 10 years the ability to think - or lateral thinking - has become very important. In a world which is changing very fast, are you able to look around you and draw the correct lessons? Do you understand numbers? Do you have the ability to look at and understand profit and loss account, and achieve those numbers required? Has sufficient rigour been instilled in you? There are social and number attributes a potential leader must possess.
Change is constant
My experience, given the events of the last eight to 10 years, is that change is constant. Obsolescence happens at a dramatic pace, which means you need to re-look and reinvent whatever you are doing. Obsolescence could be in the product, the process or the tools available to you. Third because the change is constant; time frames are shrinking dramatically.
You need a leader who thinks laterally in terms of how to go about doing things. The person should have the ability to execute taking cognizance of the change variable. This need has arisen all the more in the last few years after the technological revolution that happened around the year 2000. Today, younger people occupying the corner office are also a symptom of the change. Everything is changing. I believe the younger leaders will be able to comprehend this and rise. Clearly, the future is with a younger leadership.
There are a whole set of new factors that have come up after the 2008 Lehman crisis, which impacted global growth. The US and Europe are still struggling to get out of the crisis. The crisis, however, did throw up another requirement - emotional stability. Emotional shocks now are a constant. Take the life of CEOs in the financial services business. There is a shock every day. That is the industry which is going through the biggest changes. So, does the CEO have the ability to face up to these shocks? What is the response of the CEO? It could be to dismiss the shock. That is not going to work. At the other extreme, the CEO could completely bow down, unable to take the pressure. A third response, the correct one would be to look at it as opportunity to improve, build and move beyond.
The ability to withstand shocks and marshal his troops, think constantly, reinvent and survive and grow, are attributes you need today in large measure. The best examples - where a leader has been able to withstand the shocks and then build - teach us a lot about how to build an organisation of the future. In today's context, emotional stability is non-negotiable.
You could have a leader who is weak in some of the leadership attributes. If you try to find an ideal leader with all the skill sets, you won't succeed. You are not looking for one leader, but leadership across the organisation. Fitting someone to the exact mould you have in mind is the most retrograde step you can take in a leadership development process. However good you are, another leader will probably bring in a completely new dimension to the company. It is better a company gets a new tonic to keep it going after your term is up.
If, in your structure, people have diverse abilities, it becomes a huge value-add. Their abilities are not all the same, but the synergy of those abilities makes the organisation better and successful. A smart organisation or leader makes sure that where there is a weakness in a subordinate, it is complemented by somebody who is very strong in that particular area of weakness of the leader.
To summarise, leadership development starts with recruitment, requires being gender neutral while doing so, choosing people with merit and without bias. After five years in the organisation, the recruits should be challenged by giving them different roles and assignments while you monitor and watch.
At the next level, after five to seven years, you need to have a leadership pool in clear sight. At this stage you should probably start running a 360-degree evaluation of the employee, depending on your organisational need. In seven to 12 years, the person is probably in a leadership role already. At that time you should have a clear identification of a leader. Thereafter, the challenges become bigger. And you need to make sure that you get a complete view of individuals who rise to high positions and carefully work with them for their development.
When a company has problems sighting leadership, it is not merely yesterday's problem. It is probably a problem going back 20 to 25 years when somebody did not do what had to be done. And even thereafter, nobody did what he/she should have. For such a company to try to suddenly discover leadership could be hazardous. It may still find one, but it could be difficult.
The author is Non-Executive Chairman, ICICI Bank
(As told to Anand Adhikari)