When it comes to spotting talented young leaders, India Inc. has generated hundreds of successes - division heads, business heads and function heads - who are 40 years of age or less. It is a trend Business Today has chronicled since 2002, when we began our signature listing of India's Hottest Young Executives. Many names in that famous first list went on to much greater glory in the ensuing years - such as Ruchir Sharma of Morgan Stanley Investment and Prasoon Joshi of McCann.
Corporate India's quest for spotting young talent and giving them leadership mandates reached the tipping point in 2012, when the Tata Group - one of the country's oldest business houses - appointed 44-year-old Cyrus Mistry as its Chairman. Since then, the group has been refreshing its top rank to induct young leaders. For instance, Mistry hired 38-year-old Madhu Kannan in 2012 as the Tatas' Group Head of Business Development. Kannan, who was CEO and MD of the Bombay Stock Exchange then, had featured on BT's Hottest Young Executives listing in 2011.
Kannan is one in a long list of people that BT spotted early on. Saugata Gupta, current MD and CEO of Marico, was heading a division in 2008 as CEO of Consumer Products, Marico when he featured on our list. Gopal Vittal, who took charge as CEO of Bharti Airtel in 2013, featured in BT's listing in 2007 when he was Regional Category Vice-President, Fabric Cleaning, Hindustan Unilever.
For a country with India's young demographic, you would imagine this situation can only get better. But that may not exactly be the case. Seven years ago, leadership search firm Egon Zehnder did a study on CEO talent with Nitin Nohria, Dean of Harvard Business School. The study found that only 15 per cent of companies in North America and Asia had the right number of qualified successors. In fact, when it again did a survey late last year to update the findings, there was a terrible rate of depletion in the level of successors. "The thing to worry about is that talent in the age bracket of 35-44 years is shrinking," Claudio Fernandez-Araoz, Senior Advisor to Egon Zehnder who founded the firm's appraisal practice, told BT during his trip to India late last year. This, according to him, has been triggered by three key dynamics at play: globalisation, demographics and talent pipeline.
So, what do young leaders bring to the table apart from the usual - greater passion and energy? There are other critical reasons, too. "It is important for those in leadership roles to relate with a younger workforce demographic," says Purvi Sheth, CEO of Shilputsi Consultants. "That makes younger leaders extremely crucial to managing and developing talent and steering the business." Adds Lakshmi Narasimhan, Associate Director, RGF India: "Today's young leaders have high risk appetite and thrive well in the VUCA (volatile, uncertain, complex and ambiguous) environment. Unfazed, open minded and 'being a sport' depicts the new generation of leadership."
Catch 'em Young
Spotting leadership talent early is easier said than done. Some top companies have put in robust processes for this purpose. There is the obvious option of lateral hiring of talent from other companies. But, equally, companies are putting in place measures on a war footing to tap talent at the formative stages from colleges as well.
For instance, Egon Zehnder's Fernandez-Araoz points out that Tata Consultancy Services - India's biggest company by market value - has evolved a method of assessing talent productivity against their cost to the company. The company then makes blanket offers to certain colleges from where talent has shown consistent good results in the past. In turn, the company has shown consistently good results over the years, which naturally is an outcome of talent within. The correlation, of course, is not so simplistic - many other factors are involved in a company's success - but there is a correlation nonetheless because success is determined by strategies put in by managers.
IT services major HCL has something called Ideastation that provides a platform for students in the US, the UK, and India to connect, blog, ask questions and engage with the company. The target audience for the US and UK are students from engineering colleges and B-schools, and the target audience for India is B-school students. At Ideathon, HCL presents live business cases to students for them to offer solutions. Of course, there are companies such as PepsiCo India and Bharti Airtel and others that also have exercises aimed at spotting talent.
This is becoming increasingly important because, as K. Sudarshan, Regional Managing Partner-Asia, EMA Partners International, says, India's Inc.'s leadership profile is set to witness a generational churn in the next five years. "You will see younger leaders at the helm while those in the old set will slowly fade out," he says. This is visible in the way all new segments within established groups are reaching out to young leaders. It also underlines why we persist with our passion for showcasing India's Hottest Young Executives. It is a listing that you can refer back to in the coming years - for perspective. We are helped in this initiative by our knowledge partners and an eminent jury. As Rekha J. Koshy, Partner at Accord Group, points out: "Talent will continue to be almost the sole defining factor for firms in years ahead."