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CEO factories

Some firms have a knack of throwing up people who become leaders elsewhere. Vivek Sinha & Sandeep Singh find out why. Leader breeders

business Updated: May 07, 2011 01:28 IST
Vivek Sinha & Sandeep Singh

Last month, when Suresh Vaswani took over as chairman of Dell India, months after leaving IT major Wipro as its joint CEO, he joined a long list of Wipro alumni who stepped out of the company's green Sarjapur campus in Bangalore to take up leadership positions elsewhere.

Industry experts say that Wipro is not alone in being a nursery for CEOs. A handful of companies including PepsiCo, Hindustan Unilever Ltd (HUL), Citibank and ICICI Bank are famous for throwing up executives who go on to don big hats at other companies.

There is the undeniable fact that executives often acquire qualities, skills and personalities in these "CEO factories" that make them hot property for headhunters. Some are groomed early.

"Our campus recruitment strategy serves a fundamental role as our entry-level programmes offer broad exposure across different businesses," said Stephen Cronin, head of human resources at Citi South Asia.

It is all about leadership and execution — and that often comes back to what they learnt during the course of training and experience in these companies.

"We take early bets on people. For instance if a person says that he wants to try his hand at something, we support him but the onus lies on him/her to learn," says Abhijit Bhaduri, chief learning officer at Wipro.

Usually, the CEO nurseries believe in assigning big responsibilities to their staff and have well thought-out strategies with an eye on linking long-term growth of the company with those of individual careers.

"We give big jobs to people early on, which is one of the tenets of our talent philosophy," says Leena Nair, executive director, HR at HUL.

"So a young business leadership trainee that has been confirmed may be handling an area/region with revenues of around Rs 400-500 crore."

Management gurus Bill Conaty and Ram Charan recognise and appreciate HUL's management training programmes in their book-— The Talent Masters.

"HUL believes that leaders are born, not made; it sees leadership as a specific competency that it can identify and develop right from the start," Conaty and Charan say in their book.

Training does matter, though. HUL's Nair said training programmes happen at all levels at HUL.

One key point is that the old-world rule of putting in years at a company need not be a driving factor in the leader-breeding firms.

"Age is not the sole criterion," says Samik Basu, chief people officer at PepsiCo India.

Discipline at work often does the trick, getting leaders ideas on managing time and delivery through gruelling work schedules. With it comes a much-needed confidence.

And a young leader often responds solidly when much faith is reposed on him or her by the company — and this is common between the companies. This is more so when the company nurtures merit and identifies potential leaders early and watches them perform.

Nevertheless, leadership jobs are not ensured for all because there is not enough room at the top. Some leaders leave when either they are bypassed or feel their chances of realising their potential is limited in the place they are.

"At the end of my 25 years at Citi, I was looking for fresh challenges more so to reinvent my skill-sets, while preserving my India linkage," said the former CEO of Citibank India, Sanjay Nayar, who is the India head for private equity firm KKR. He said his motivation to join KKR came in the opportunity to learn investing and risk-reward trade-offs.

In some cases, for instance in family-controlled Wipro, there is always the question of whether the company can have a chairman who is from chairman Azim Premji's offices than from his home. His son Rishad is now in a strategic position.

In other cases, division heads in the reckoning for the big CEO job see the race narrow – and that means pastures beckon elsewhere. The human resource heads of these companies deny a lack of opportunity as the reason for talented leaders leaving.

Whatever the detail, the fact remains that the leaders in question, despite their nurturing in the CEO factories, have to have a forceful personality of their own.

D Shivakumar, MD at Nokia India, said Nokia is vastly different from HUL, where he learnt his ropes. "Before I could learn I had to un-learn," he said.

So, the tantalising question still remains: are leaders born or can they be created?