Business Today

A yardstick for management ability

There is a leadership deficit on vision and people in India, says a new index.

     Print Edition: Feb 20, 2011

Think of an index that measures how effectively a CEO, an organisation, a group, a sector or a country is performing. That is what the Management Capability Index, or MCI, developed by the All India Management Association, or AIMA, and HR consultancy Mercer, aims to do. "Management Capability is the degree to which management uses its skills, abilities and competencies to achieve business results. The index is a manifestation of this capability in an organisation, an industry or collectively in a country's economy," says Nishchae Suri, MD of Mercer India.

MCI will be an annual index. However, based on the feedback for this inaugural MCI, it will be refined and aligned with the needs of Indian CEOs. A total of 203 organisations participated in the survey.

The survey parameters included the following values, with organisation results and comparative performance carrying the highest weightage: Organisation results and comparative performance; visionary and strategic leadership; performance leadership; people leadership; financial management; innovation of products and services; organisation capability; application of technology and knowledge; external relationships; and integrity and corporate governance.

The overall Indian MCI 2010 is 71.6 per cent. "This is not a bad score considering that this average has largely been weighed down by the poor score of government agencies and companies, which have scored 66 per cent," says Gautam Thapar, President of AIMA, and Chairman & CEO of the Avantha Group.

In the survey, all types of organisations have achieved their highest scores on 'Integrity and Corporate Governance'. The scores on 'Performance Leadership' are much better than the scores on 'Visionary and Strategic Leadership' and 'People Leadership' parameters.

The biggest takeaway from this index for Indian corporates is that there is a clear leadership deficit, particularly on the vision and people fronts. "Leaders of Indian organisations need to get their colleagues on their side and convince them that they have the wherewithal to lead them into a positive future," says Thapar. The index has a global equivalent.

Developed by the New Zealand Institute of Management, the MCI survey has been adopted by members of the Asian Association of Management Organisations. Malaysia has been running this survey since four years. In India, AIMA launched the survey this year.

-Saumya Bhattacharya

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