Indian firms losing leaders, not making new ones: B-school study | mumbai | Hindustan Times
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Indian firms losing leaders, not making new ones: B-school study

Pritesh Vora (34), who works for a bank in Mumbai, was asked to head a department. Although his seniors considered him bright, Vora did not feel confident and found an excuse to reject the offer. His company hired someone else and Vora was back to his old job.

mumbai Updated: Oct 18, 2010 01:00 IST
Kiran Wadhwa

Pritesh Vora (34), who works for a bank in Mumbai, was asked to head a department. Although his seniors considered him bright, Vora did not feel confident and found an excuse to reject the offer. His company hired someone else and Vora was back to his old job.

Vora is not alone in his nervousness. A study by Pune’s Symbiosis Centre for Management and Human Resource Development (SCMHRD) shows that most managers are neither confident nor groomed to become leaders.

The study of the downfall in leadership in Indian companies after the economic slowdown looked at nine prominent Indian firms, including banks and consumer goods companies. It showed that in the past two years, a lot of people in leadership roles — from supervisory levels to the top management — have either switched jobs or been laid off.

The tenures of leaders in these companies have reduced from an average of four to five years to as low as 18 to 24 months. This adversely affects the firm’s growth and profitability.

“Employees show ‘stopping behaviour’ where their mindset stops their growth. The self awareness needed to rise up the ranks is missing,” said KS Subaramanian, director, SCMHRD, who did the research with two other professors.

“There is a shift in organisation behaviour, where firms don’t invest in their employees’ potential, but bring in developed people from outside. Firms expect managers to develop leadership abilities on their own.”

Faculty members from Harvard University are teaming up with SCMHRD to further study leadership in India and develop a model of sustainable leadership. The team will address heads of companies in Delhi and Bangalore this week.

India’s growth rate of 6% to 7% will add pressure on organisations and the individual to maintain a competitive edge. Sustained leadership is needed for mergers and acquisitions. “New managements will bring in their own people, if the current leadership does not match standards,” said Subaramanian.

“In the US, too, companies are facing similar issues. The average tenure of CEOs, especially those from outside the organisation, is not more than 18 months. To succeed, global leaders need more than emotional intelligence and social skills. They need the competence to make good decisions,” said Myra White, a professor at Harvard and a leadership expert.