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Leadership Lessons from India

Source | LinkedIn : By Srinivashan Iyer

Vineet Nayar, CEO of the Indian IT services giant HCL, likes to rock the boat. Asked what he wished his greatest legacy to be in five years, Nayar responded without missing a beat: “That I have destroyed the office of the CEO.” He led the charge that gave rise to the company’s bracing motto, “Employee first, customer second”—an idea that would give many managers hives. And he invited employees to evaluate their bosses and their bosses’ bosses; then he posted his own review on the firm’s intranet for all to see, and urged others to follow his lead.

What’s Nayar up to? Pressed to explain, he told us that he sought enough “transparency” and “empowerment” in the company that “decisions would be made at the points where the decisions should be made”—that is, by employees, where the company meets the client. Ideally, he said, “the organization would be inverted, where the top is accountable to the bottom, and therefore the CEO’s office will become irrelevant.”

Nayar might be dismissed as a loosely tethered idealist except that his company, with nearly 55,000 employees and a market cap of $24 billion, is growing even faster than India’s red-hot economy. He’s doing something right, and, as we found in a yearlong study of Indian executives, his leadership approach is closer than not to the norm among India’s biggest and fastest-growing companies.

To discover how Indian leaders drive their organizations to high performance, our research team interviewed senior executives at 98 of the largest India-based companies. In conversations with leaders at Infosys, Reliance Industries, Tata, Mahindra & Mahindra, Aventis Pharma, and many others, a picture emerged of a distinctive Indian model. None of the people we interviewed suggested that their companies had succeeded because of their own cleverness at strategy or even because of the efforts of a top team. They didn’t mention skill in financial markets, mergers and acquisitions, or deal making—talents that Western CEOs often claim underpin their companies’ performance. Almost without exception, these leaders, like Nayar, said their source of competitive advantage lay deep inside their companies, in their people.

That may sound like posturing, but our research puts hard numbers on the characteristic ways Indian leaders invest in people. Far more than their Western counterparts, these leaders and their organizations take a long-term, internally focused view. They work to create a sense of social mission that is served when the business succeeds. They make aggressive investments in employee development, despite tight labor markets and widespread job-hopping. And they strive for a high level of employee engagement and openness.

This is not to say that Indian firms and their leaders are inordinately virtuous. Corruption and malfeasance can be found in the Indian business community as surely as in any other. (Note, for instance, the scandal involving Satyam Computer and its chairman and founder, Ramalinga Raju, who was jailed on charges of misleading investors.) Not all Indian executives are saints or sages, just as not all U.S. CEOs single-mindedly pursue shareholder value while ignoring social concerns. Still, the leaders of the most successful Indian companies do engage with their country, culture, and employees in a characteristic way, and this is an important factor in their performance. Their approach is used often enough that, we believe, it constitutes the centerpiece of a clear model—one from which Western leaders can learn.

Although India’s competitive environment is relatively new, company leaders have brought to it a long-standing tradition of business largesse—a commitment to social goals fueled by enlightened self-interest. That mind-set is embedded in Hindustan Unilever’s Project Shakti, for example, which applied microfinance principles to create a sales force in some of the subcontinent’s most remote and economically challenged regions. And it’s revealed in hospitals, grade schools, and virtual universities built across the country by leading businesses.

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