The job of the chief executive officer (CEO) in India has always been pretty difficult - and over the years, it has only grown more difficult. Till the early '90s, very different skills were required to steer a big, listed company in India successfully because of the numerous government restrictions and regulations. Since then, many things have improved, while others have become much tougher.
For example, economic reforms have ensured less government intervention and far more transparency in many markets. They have also ensured deeper capital markets, easier borrowing norms, and many opportunities to get into new areas of business, and also diversify away from maturing industries. You might still need multiple licençes to set up a new company or business, but certainly not anywhere near the number of licences you needed in the '70s and '80s. Successive governments also have been far more business-friendly than they were before the '90s.
On the other hand, the job of the modern CEO has also become infinitely more difficult because of a host of reasons. First, both the concept of scale and the quality of competition have changed quite dramatically. As the Indian markets are now integrated far more with global markets, it is not enough to be a big company by Indian standards or supply goods and services that could be considered good enough even a few decades ago for the domestic consumers. Today, every company operating in India needs to fight it out in the market with challengers from all over the world, and the Indian consumer is quick to reject anything that does not match up to world standards. The global integration of Indian markets has also meant far more financial risk and far more sensitivity to the economic problems around the globe. For instance, the fortunes of India's biggest software services company, TCS, were always linked far more to the health of the US and European economy, than it was to the Indian economy. But now, almost all industries need to worry about competitors and the state of the markets globally. The big Indian banks and other financial players need to compete against banks and other lenders abroad when big Indian companies seek to raise funds. If an Indian bank is not competitive, its customer will simply raise funds from someone overseas who is offering far better terms.
Similarly, in automobiles, chemicals, textiles or telecom services, CEOs operating in India have to worry about how markets across the world are doing because they do not service only the domestic market any more.
Also, the domestic markets and the domestic customer expectations have become far more complex. The number of products competing for the customers' attention in any market segment was fairly limited three decades ago. Now, the number of competitors in each segment of the market has risen exponentially. More importantly, what were largely homogenous markets in a product or service category three decades ago are now divided into numerous sub-segments and niches.
Rapidly evolving digital technologies and the evolution of new digital marketplaces have only added to the complexity the CEO needs to deal with. A CEO today has to constantly worry about the introduction of a new product or service that would make his current offerings obsolete in no time.
The Business Today Best CEO survey identifies the country's best business leaders based on medium-term performance. We take a rolling three-year performance to see which CEOs have outperformed their peers. (In public sector enterprises, we have a shorter time-frame because many CEOs have relatively short tenures. You can read the details of our methodology on page 38.)
This year's winners are a mix - some of them are familiar names having won in the past couple of years as well. Others are newcomers to our list, having performed exceedingly well and muscling out better known rivals.