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India has witnessed unprecedented growth in the last decade, and, though a much touted and celebrated fact, has led to some very interesting repercussions on leadership development and talent management. Meet up with any CEO or C suite member and you are likely to hear some, if not all of the following sound bites:

Double-digit Growth: Our growth ambitions are outstripping our ability to groom talent internally. We are not built to grow our talent pool fast enough to feed our business growth.

Leadership Skills: We have solid technical capabilities; we just cant convert enough of our technical leaders into business leaders.

Ageing Leaders: We have a strong leadership team at the top but half of them will retire over the next 2 years. And we dont have enough emerging leaders to replace them.

Expansion Woes: We are expanding regionally and globally. Where can we find the talent to run cross-cultural operations? Our existing leaders dont have cross-border experience.

Attracting Leaders: Our leadership team is strong, but they are being targeted by new entrants. We are not a big enough brand to attract strong leaders from outside.

Enabling Leaders: Given high competition for talent, we promoted employees across levels but know that they are not performing at the senior levels.

Shweta Shukla senior consultant, Hewitt Associates

Keeping in mind economic and business factors, the need for developing leaders in the IT/BPO industry context is only amplified manifold. Leadership development today is not limited to only the evolved and established organizations. In fact, newer and smaller firms are considering this as a critical element of their human resources strategy.

Leadership Challenges
CEOs of IT/BPO companies participating in the Hewitt Best Employers study in Apac and India views quality of leaders in an organization as the most important factor affecting its success. While some benchmark leadership practices come from this industry, it is also evident that the sector is facing a heavy talent crunch especially in developing strong leaders at the middle management level. There is a need to focus more on developing leaders in managing global businesses and a diverse workforce, and developing leaders at all levels. A lot of mergers and acquisition in the IT/BPO industry has lead to managing and integrating cross-cultural teams very critical as well.

Today, these factors form the key judging parameters for leadersfrom planning to executionand the ability to spearhead the organization in difficult times with sound decision-making skills. Given that technological innovation and understanding of customer needs go hand in hand, the industry needs to focus more on developing strong business skills across different teams. The ability to identify and develop an idea and take it to market is the key to becoming a market leader. And the onus is really on the person at the helm leading the organization to achieve its goals.

Research Findings
Inputs from more than fifty-five IT/BPO organizations as part of Hewitts Best Employer Study in 2007 clearly highlights that providing a learning environment with effective structure, processes, and systems in order to grow the depth and quality of leaders is critical. The key insights from the study indicate that putting in place a sound leadership strategy has elements of the following:

Leadership Competency Framework

• A well-defined leadership competency framework forms the foundation of the leadership assessment and development processes. 75% organizations had defined leadership competency frameworks in place.
• The most frequent usage of leadership competencies is for selecting leaders from within the organizations as part of the performance assessment process, as well as for the succession planning process. However, the use of leadership competencies while determining base pay and incentives is fairly limited.

Key Leadership Characteristics
The top three most important leadership characteristics mentioned by organizations include:

• Character/Integrity
• Champion of organizational culture
• Performance level

Leadership Development Practices

• Most IT and BPO Best Employer organizations have formal processes to manage leadership growth and development. 86% of organizations use internal leadership training, which is the most frequent leadership development process. External leadership training programs are used by 77% of the organizations, external degree programs are used by 63% of the organizations, and rotational and developmental assignments by 58% of the organizations.

Succession Planning

• 76% organizations have a formal succession planning process in place. All organizations utilize the succession management framework for annual talent reviews, as well as assessment of employees for advancement. Organizations also use the succession plan to review KRAs; and redefine them going forward.
• n The graph below shows that succession planning is primarily done for senior and middle management positions. This is a marked increment since previous years, indicating that organizations are moving toward creating a ready talent pipeline for key positions.

It is also interesting to observe that as high as 91% of participating organizations incorporated ratings from their performance management process into the succession planning process clearly indicating that sustained high performance is one of the most critical factors which organizations in the IT/BPO sector consider while planning their leadership pipeline.

Ownership of Leadership Development
While 23% of organizations believed it is HRs responsibility to develop best practices for leaders, 25% believed that this was senior managements imperative. Most (48%) organizations entrust their leadership/organizational development team with this responsibility, clearly indicating that organizations have a dedicated focus on leadership development and have put in place a specific function to ensure that leadership development gets necessary focus and attention.

In the Top Companies for Leaders study conducted by Hewitt, we looked at how organizations are ensuring to build a steady pipeline of readily available talent, and what processes are getting institutionalized to ensure this steady supply of leaders. Four clear truths emerge from our study:

• Truth #1: Leaders Lead the Way: Leaders are passionate and visible with an unwavering commitment to leadership
• Truth #2: Unrelenting Focus on Talent: Intense focus on talent permeates all levels of the organization
• Truth #3: Practical and Aligned Programs and Practices: Business strategy is at the core of programs and practices
• Truth #4: Tipping Point: Leadership is a mind-set, a way of behaving, and it is ingrained in everything that an organization does.

One doesnt need to look far and insist on global benchmarks. Indias leading IT and BPO companies have proven their sustainable success not through better technology or financial reserves but through flawless execution of the above truths. These organizations have built some landmark leadership practices and have built a very strong leadership brand in the market. The best managed and most successful Indian IT companies have set precedent for other organizations aspiring to go global, with simple defined practices:

• Leadership culture which is continuously reinforced through established practices including strong focus on walking the talk and leading by example.

Senior Leadership and Board Members Involvement

• In one of the top companies, the CEO spends about 30% of his time on people-related issues and is the prime sponsor and driver of all leadership initiatives.
• The board holds an annual meeting, completely focused on the outcomes of this process and succession planning for critical positions. In addition, senior leaders serve as mentors and counselors, and hold mentoring sessions on a formal and informal basis
  
  
  

Strong External Focus

• Top companies display a strong external focus in developing leadership goals and the leadership development programs. Leaders performance is often benchmarked to performance of peers in competitor organizations, hence driving changes in the global environment and industry.
• In addition, key development programs involve interacting with people across industries and across the globe to provide exposure to business heads to strategic issues.

The talent war is far from over, and the Indian IT/BPO talent market struggles to create the right pipeline. This creates a very critical need for organizations to develop a compelling employer brand, the success of which is heavily dependent on how well the leadership of the organization symbolizes this brand. A company whose leadership embodies its unique brand will achieve stronger market value than competitors. This quote from the book Leadership Brand: Developing Customer-Focused Leaders to Drive Performance and Build Lasting Value by Dave Ullrich and Norm Smallwood beautifully sums up the linkage.

All organizations will go through peaks and troughs. However, it is the ability to use both the phases as an opportunity to develop people, which differentiate the organization. It is the ability to make the individual development plan comes alive for every employee that builds credibility and garners buy-in.

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