Global research demonstrates that 81% employees are leaving companies because of poor quality of leaders. 43% employees are actively disengaged. There is enough proof to suggest that attending to the quality of leadership and improving engagement levels leads to growth of companies and improvement of profits.
Corporate Leadership Council, UK research demonstrates that building future leaders is the most important job of HRD. It offers sustainability to an organisation.We find based on secondary research that those companies, which have built capable and ethical leaders, have grown exponentially and become sustainable over a long period of time. On the other hand, those companies, which have not
built leaders systematically, have inevitably suffered in the long run.
Take for example, the case of the Indian multinational conglomerate Tata Group. The Tatas for more than 50 years have had the Tata Administrative Service ( TAS ) which recruited the best talent from the top colleges and groomed them to be future leaders. Most of the Chairman and MD’s of the Tata companies are from the Tata Administrative Service. The group with 695,000 people employed in more than 100 countries across six continents, runs multiple leadership programmes. TCS even in a Covid year has recruited 40,000 engineers at the entry level. TCS, perhaps, is the most valued company not only in the Tata Group but in the industry as a whole. Similarly, Infosys has done the same.
Another company that comes to mind is Hindustan Unilever which every year recruits the best talent from the campuses and grooms them to top positions. In fact, HUL has so much talent, that many find it difficult to rise in the pyramidal structure and leave to become MD & CEO of other companies. The HUL Management takes great pride in its ability to build the finest CEOs for the country.
The same is the case with Asian Paints, Britannia, Nestle, Procter & Gamble, etc which routinely go to the campus, acquire the best talent and groom them to be the top leaders of the company. Global companies such as Boston Consulting Group, McKinsey, Ernst & Young, Shell are no different in
this regard.
While the Government of India is often criticised by some people for not having a good quality of management, it is far from the truth and reality. Every year, the armed forces through the National Defence Academy and the Indian Military Academy recruit cadets who grow up to be generals, air marshals or chief of the naval staff. No general or air marshall is recruited from outside.
Similarly, the Union Public Service Commission recruits IAS, IPS, IFS and other allied service officers at the entry level and they grow up to be secretaries of the various ministries.The civil services offer a very strong administrative structure to the country. The nation and PM’s Atmanirbhar strategy is possible only because India has the finest, seasoned and talented armed forces and bureaucracy who can rise to any occasion and lend fantastic management support to any crisis, as seen in the rollout of Covid vaccines.
The Banking Service Recruitment Board, Reserve Bank of India Officers recruitment is another example. It offers all the chairman and MD of the public sector banks. Many of the recruits of State Bank of India have become chief executive officers of many private sector banks.I have illustrated above examples so that all start–ups and new companies especially understand that creating a cadre
of officers is extremely important for growth and sustainability. Based on research conducted by SRIIOM Human Resource Solutions LLP, we have found that there is a positive correlation of entry level cadre building to sustainable growth and a negative correlation when companies have not built future leaders.
Almost all companies which have crashed such as Jet Airways, Kingfisher Airline, Mafatlal Group, Kilachand Group are those who did not create future leaders. The top management did not consist of professionals but members of the family who were mostly not qualified and, sometimes, incompetent.
Ask any financial analyst and he will tell you to never buy a share of a company which does not have an ethical and good leadership structure. Therefore, building future leaders who are embedded in the culture of a company and committed to its growth always serves the company and offers it sustainability.
As per a global research, if 81% people are leaving companies because of bad bosses, it makes eminent sense to create effective and great leaders who can manage people effectively and help them to grow in maturity, wisdom, knowledge, skills and behaviour.An expenditure in recruiting talent at the entry level and building them as capable leaders cannot be seen with a myopic view as an expenditure. Creating capable leaders is an investment into the future. Companies which has built a strong cadre of executives and trained them to become capable leaders have become profitable and sustainable.
Ashoke K Maitra
Founder & CEO, Sri Ramakrishna
International Institute of Management
ashoke.maitra@gmail.com