As the world struggles to understand the essence of successful leardership, a study on best practices and emerging trends in CXO development in the Indian context focusses on home-grown leaders

This study scanned various sectors of IT, FMCG, hospitality, technology and financial services both Indian and multi-national organisations. One of the key findings was that organisations gave a higher priority to internal development of leaders in comparison to recruiting laterally. Home-grown leaders cost less than external recruits and their cultivation is also more economical. As a strategy for creating sustainability, organisations prefer to provide career development opportunities to employees who have grown with the organisation. This point was underlined in a study by SHRM and Chartered Institute of Personnel and Development (CIPD) (see graph), which found that the primary focus for leadership development within organisations is on developing high-potential individuals.

Objectives

•To develop a conceptual framework for CXO development based on global and India-specific research

•To understand how CXO development in India compares with global leadership practices

•To highlight the best practices, trends and differences in CXO development in the Indian context.

•To articulate challenges and implications for next practices in CXO development in the Indian context.

Six organisations -- Wipro, Marico, Marriott, PepsiCo, Agilent Technologies and American Express -- were selected for the study from a broad list of 35 organisations. This study has helped establish an alignment of CXO development practices with global best practices in the organisations studied.

Key findings

• Rapid growth is a critical driver of leadership development

While organisations across the globe are just beginning to focus on business growth after the prolonged economic crisis, organisations in India have swiftly diversified and expanded their businesses across multiple locations over the past few years. This has necessitated accelerated development of CXOs as a strategic business imperative. Indian organisations have preferred to focus on internal, home-grown talent for their CXO positions ahead of hiring from the open market. CEOs essentially own and drive the CXO development process in most organisations because they have the required clarity on business requirements. Although global benchmarks indicate that high-performing companies fill 60 per cent of their leadership pipeline with internal talent, most organisations in the study have a proportion of 70 to 80 per cent of home-grown talent among their current CXOs.

• Developing leaders for CXO positions is an emerging trend

Leadership development through succession planning is a common practice. A couple of organisations, however, have evolved their focus from developing leaders for specific CXO positions to developing a pool of leaders at a certain level so that they can take up any CXO position, barring niche opportunities that require deep technical expertise, as in the instance of a research and development (R&D) head. Since candidates are identified at three to four levels below the CEO, this is a long-drawn process. On an average, it takes three to five years to develop candidates who can step into CXO positions.

• Collective identification of CXO candidates

Though the immediate manager makes the primary identification of CXO candidates, the final decision is predominantly collective. Both, leaders of the line of business and the HR facilitator, have a say in the process. Feedback of the candidate’s peers and subordinates through the 360-degree assessment is also considered. Use of psychometric instruments is another emerging trend in some organisations. This makes selection more objective and helps identify potential through assessment of hard -to-develop personality traits.

• Experiential learning is a key focus area

According to the Global Leadership Forecast of 2011, most organisations in India stated that formal workshops were the most commonly used method of leadership development. However, this study focused essentially on organisations with best leadership development practices, which endorsed experiential learning as a key technique in developing C-suite leaders. Click here to read more...

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