Article: The Industry Perspective: Leadership development, role of CEO

Leadership

The Industry Perspective: Leadership development, role of CEO

Industry experts share their views on leadership and succession planning
 

HUL is often referred to as a ‘CEO Factory' and has contributed over 400 CEOs within Unilever and externally

 

Boards that are willing to experiment with a young leader should learn to be tolerant towards ‘experimentation'

 

On Leadership Development

Leena Nair, Executive Director-HR, Hindustan Unilever Ltd.

Leadership development is about building leaders through a combination of disciplined routines and processes, and something not always evident from outside: a collective expertise, honed through practice, in recognizing and developing talent. HUL is often referred to as a ‘CEO Factory’ and has contributed over 400 CEOs within Unilever and externally. Our approach toward recruiting and nurturing leaders has been built over several decades where each generation of leaders has left a legacy for the future by playing its part in selecting and nurturing the right talent. The key tenets to leadership development include attracting the best talent, helping the new recruits walk the first mile, driving their growth through diverse experiences (both national as well as international), robust planning and rigorous HR processes, capability building, and a strong performance culture. All new recruits at HUL go through a Business Leadership Program which is a 15-18 month cross functional training program including international exposure and three months of independent responsibility. This is a step toward creating future leaders. Having a clearly defined career philosophy which revolves around job rotation and diversity of experiences at all stages of the individual’s career is imperative to have a holistic development of potential candidates. Clearly defined KPIs and metrics are again a good tracker of the overall health of talent.

 

On Role of CEO in Succession Planning

Dr. Shalini Sarin, Country HR Partner & Director-HR, Schneider Electric India Pvt. Ltd.

It is crucial that the CEO owns the talent management process and holds business unit heads personally responsible for meeting development objectives within their units, with the expectation that the bar will constantly be raised. Though it has become a cliché to say that the CEO must be involved in any strategic process, without active commitment at the very top, together with executive leadership, will sense that succession management is a tangential activity; next tier may not commit to the program. In fact, division executives may hide and hoard talented employees by manipulating their assessments. It is also not realistic or desirable for CEOs and their executive teams to have sole responsibility for the development of talent and leadership. They don’t have the time or the expertise. Both corporate HR and functional or regional HR heads need to be involved. Corporate HR provides standards, tools, and processes, and functional or regional HR people make sure that local units abide by the rules and customize them as appropriate.
It is also very important that the successor must align his professional goal with the overall organizational goal and identification, selection and development of the successor qualify as the top three processes towards fulfilling this desire. While there are several attributes to a good successor some important ones are: Results Driven (has completed many challenging assignments), People Skill (Influences, motivates, works with a wide range of people), Mental Ability (Street smart, asks insightful questions), Lifelong Learning (seeks challenging opportunities for new knowledge, learns from successes and failures), Integrated Thinking (Links ideas, sees essence of problem), Flexible (adjusts priorities, takes risks, embraces change), Energy (gets energy from work and energizes others), et al.

On Inclusion of Young Leaders

Hari Thalapalli, Chief Marketing Officer & Chief People Officer, Mahindra Satyam

In my opinion, prioritizing the context of ‘age’ and ‘experience’ while identifying potential leaders, would be fundamentally wrong. While there are many advantages of bringing on board ‘experienced people’ for leadership positions, there are equally distinct disadvantages for sure. Whereas on one hand experience can reflect the demonstrated strengths of the candidate, it also throws light on his / her areas of weakness. Youth on the other hand, may not bring with it an excessive baggage of tried and tested experience (which often leads to rigidity of thinking). What it does bring is willingness to learn and probably a greater understanding about the end customer needs - especially in sunrise industries.
Boards that are willing to experiment with a young leader should learn to be tolerant towards ‘experimentation’. Young and enthusiastic leaders may sometimes lift the lid off the familiar ground and seek newer avenues, in the pursuit of their goals. The Board must have the willingness to tolerate this style.
Some industries lend themselves easily to such aspects of leadership as the average age of their employees is itself low, for example, Telecom and IT sectors where it averages 25-30 years. However, in certain other industries such as steel and mining, by virtue of their long period of existence and organizational structure (largely hierarchical), average experience in the company tends to be much, much higher. The concept of bringing in younger leaders tends to be challenging in such a context.
At the same time, I also maintain that ‘age’ is all about being able to reflect a vibrant and youthful thinking. It all boils down to aspects such as ‘how flexible are you about your thoughts’, ‘how willing are you to learn and unlearn’, and ‘how inclusive are you in generating ideas’.

On Role of Board in Succession Planning

Dr. Arvind Agrawal, President and Chief Executive Corporate Development & HR - RPG Enterprises

It is imperative for the Management / Executive Board to participate in the whole succession planning process. I am talking about the involvement of Management or Executive Board and not the Legal Board. The process of succession planning is simple but the only difference lies in its execution and that’s where most of the companies falter. The process demands full dedication of the Top Management and not just compliance as one of the points in the agenda of the meeting. Companies should review their succession planning process on an annual basis. At RPG, we look at succession planning every year for all the top management positions. In many cases, job rotations are planned so that a person brings fresh perspective in the business and also develops by working in different businesses and functions. We ensure that people who reach the top of the learning curve get job rotated so that they have fresh opportunity to learn different aspects of business and management. At RPG Enterprises, the Board takes active part in the succession planning for the top management level. RPG has a robust process wherein a full-day session, which is presided over by the Chairman and attended by all the Management Board Members, is held every year. In this meeting, each top management level employee is discussed in terms of his / her career and successor. Each Management Board Member prepares recommendations for each of the top level employee and discusses their development plans by ways of job rotations, etc. Sometimes, when there is no suitable successor for a position, recruitment action is initiated.
There is no difference at all in the role of Board in succession planning process followed in a family-run business vis-à-vis a professionally run business. The difference lies only in the fact that whether a company has a robust succession planning process or not. There are numerous examples in both family-run businesses as well as in professionally-run companies where the companies have followed (or have not followed) a systematic succession planning process. When it comes to succession planning, there is no distinction in terms of the ownership of the company. Sometimes, companies contemplate on whether to have an internal successor or rope in an outsider. In my opinion, when companies want to make fundamental changes in the way businesses are done, they rope in outsiders who can challenge the status quo, explore new paradigms and bring about radical changes. There are global examples where outsiders have completely turned around the company, case in point being IBM where Louis Gerstner, who came from American Express and completely transformed the business. In the recent past, Unilever also roped in Nestlé veteran Paul Polman. On the other hand, in terms of insiders taking over, the transition from Jack Welch to Jeff Immelt was a smooth one.
 

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Topics: Leadership, Strategic HR

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