The most audacious acquisition by an Indian company this year saw the $2.4-billion Gurgaon-based Apollo Tyres acquire US-based $4.2-billion Cooper Tyre & Rubber for Rs 14,500 crore. The deal, being financed solely by debt, has spooked the markets as shareholders reacted with shock and then with disdain, dumping the stock in large numbers. It closed Friday at Rs 64.75, a decline of 5.61 per cent over and above the 25 per cent fall on 13 June. The company has lost nearly a third of its value on the stock markets within two days of trading. BW Businessworld's Swati Garg spoke to Apollo Tyres' Vice Chairman & MD Neeraj Kanwar on the deal and the investor reaction. Excerpts from the exclusive interview:The market has reacted violently to the Cooper acquisition, with the stock taking a 30 per cent beating in the past two days. How do you justify the premium you paid for the stock?The premium we have paid is in line with the norm in the tyre industry where deals are being done in the 30 -50 per cent premium range. We have paid a premium of 40 per cent, which is well within the mean of the EBIDTA multiples in the tyre industry. Besides this, our reasoning for the acquisition was clear: we wanted a global scale and footprint. We are also getting additional distribution network in Europe and Americas, which are the world’s highest margin markets. That combined with the presence in India and China, which are the world’s fastest growing market, forms brilliant synergies.When do you expect the stock to stabilise?We’ve already taken the beating that we had to take. I’ve spoken to investors and explained the financing of the deal which was misunderstood in the beginning. We will not take the entire burden of the debt on the Apollo India’s books. We will take only $450 million of the $2.5-billion debt. The deal is, in essence, a leveraged buyout, a fact that didn’t come across clearly earlier. Now that it has, we expect the stock to stabilise.Read Also: Why Shareholders Fear Apollo DaredevilryBesides the global footprint, and access to international distributor networks, what are the benefits you are hoping to get from the deal?We expect to save up to $80 million in the few years on just raw material sourcing since now we will have a clear pool. We will also be able to optimise procurement systems, besides and improvement in the R&D functions leading to a more standardised approach in the overall system of manufacturing.At present, 65 per cent of you revenues come from India. How will the mix change now?After the acquisition, we expect about 44 per cent of our revenues to come from the US, 22 per cent from India, 18 per cent from China and 12 per cent from Europe, with the rest of the world contributing to the remainder. So basically, now 60 per cent of our revenues will now come from high margin mature markets, reducing our risk exposure from an over dependence to a single economy.Where in your opinion will the growth even come from in a world which is in the grips of a slowdown, and developed markets which haven’t grown at all in the past couple of years?Cooper has grown at an average CAGR of about 16 per cent in the past 3-4 years irrespective of the slowdown, given their dominance in the replacement tyre market in these economies. Besides this, if you look at market-wise break up, China has grown at 9.5 per cent in this period, Apollo India has grown at 11 per cent. So there’s potential in the market for growth despite the slowdown. Also, the access to new markets will mean we can get products from India to these markets, where there is a demand for them. This will also translate into growth.Why did you sell Dunlop to Sumitomo if an expansion in footprint is what you were looking for?We didn’t own the global rights for the Dunlop brand, which resided with Sumitomo and Goodyear. We only had access to the brand in 32 countries, which didn’t amount to anything much anyways.Will you rebrand Cooper as Apollo?No rebranding of the Cooper brand will happen, since it is a well established name.
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Think of it as adventure capital; when capital flows are down, private equity is taking a back seat, and venture capital firms are being careful, one category of investors is still willing to take risks: the high net worth individuals or HNIs. Either singly, or in combination with others of their kind, HNIs are still chasing high risk and high rewards by putting their money into small, unlisted companies. Granted, the number of such investments may just be a tickle now, but according to some market observers, a pipeline is building up quickly. Take Just Recharge It, a an online mobile recharging company that some HNIs found as an attractive investment; another similar unnamed company is aslo reported to be exciting HNI interest.And it's not just telecom services or small IT servies companies; SK Auto Finance, a Jaipur-based company is yet another that appears to draw HNI money. “Today, few venture capitalists and private equity players would invest Rs 10-50 crore in such firms," says Deepak Ladha, executive director, Ladderup, a corporate advisory firm that also doubles up as investment vehicle for its promoters. "Such deals are increasing but often go unnoticed because of their size.” Ladderup has also invested in some companies along with some HNIs.Then there is the perennial HNI favorite: real estate. In past years, HNIs bought apartments or shops in real estate projects, as small-ticket investments, but now, they are buying equity in entire development projects, mostly through special investment vehicles, or SPVs. At a time when projects are facing financing pressure, HNIs are stepping in and negotiating for pieces of the action -- and hard. One recent example cited by some analysts is Lotus Spaces in Mumbai.Ladha says that the advantage HNIs have is having a say in the project, similar to what private equity firms had. From putting their money into PE funds that invested in such projects, HNIs are replacing the PE firms. As one wise man is supposed to have said, in stormy seas a ship may be safe in the harbour, but that's not what a ship is meant for. HNIs seem to have taken that to heart, and are navigating the high-risk seas themselves. sachin.dave(at)abp(dot)insachin581(at)gmail(dot)comTwitter: (at)sachin(underscore)vd
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TAM Media, the television audience measurement agency that has been around since 1998, is in the throes of a crisis. Three broadcasting networks — Multi Screen Media (MSM) that operates the Sony brands, Times Television and NDTV — have said they will pull out and stop subscribing to the audience monitor. Zee and Star India, among the largest of the broadcasters, are also mulling disassociating themselves from TAM. Currently, TAM Media operates the only audience measurement currency called Television Viewership Ratings (TVRs) based on which as much as Rs 12,000 crore worth of advertising revenue per year is planned and invested through media planners and ad agencies. TAM Media has been literally skating on thin ice. Over the years, it has been facing flak for basing its TV audience research on a very thin base of a couple of thousand households spread over a 88 towns and centers. Critics, especially those TV channels who are marked down, point out that this peoplemeter base is too small to provide a scientific dimension to audience measurement. IBF president Uday Shankar says TAM covers just about one-third of India’s television universe. The government has also flayed TAM for providing skewed numbers, and Information & Broadcasting minister Manish Tewari frankly told this correspondent that it was all set to shut down the agency. Interestingly, the immediate trigger for the boycott call of broadcasters against TAM was the sharp fall in ratings of many channels after the mandatory digitization of cable TV. In some cases, viewership is shown to have fallen by as much as 25 per cent. The representatives of the advertising industry — the Advertising Agencies Association of India (AAAI) and the Indian Society of Advertisers have, however, come out in favour of keeping TAM’s ratings going and pointed out that without the weekly ratings, the health and commercial viability of the advertising sector would be at risk. In the long-term, the government and the other stakeholders are working on a broader audience measurement plan through the Joint sector body, the Broadcasters Audience Research Council (BARC). However, it is estimated that financing the new agency would require an investment of Rs 600 crore or more, and no one is quite sure who or how this investment is going to come in. I&B minister Tewari admitted this was the main stumbling block. In this scenario, if a slew of major broadcasters withdraw from TAM and stop paying their subscriptions, the agency might collapse. In the absence of an alternative audience measurement currency, this could be suicidal for the media industry. Besides self-claims, how will advertisers judge which channels are the best to put their money on? The broadcasters are heaving the axe on their own feet, and they would be better advised to bring in the alternative before killing off the only currency that now exists. gurbir(dot)singh(at)abp(dot)ingurbir1(at)gmail(dot)comTwitter: (at)stayalive
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During my career, I have seen many organisations and business leaders frustrated by a lack of real success and impact with their quality programs. Great enthusiasm surrounding initial implementations eventually turns to disappointment two or three years later, when leaders wonder what was the result of their investment. How has the business improved? Why haven't the big dials moved?All too often quality is viewed as Lean, Six Sigma, ISO or a myriad other concepts or programs that make their way into organisations with great splash and much fizzle. But these are primarily improvement methods, not a systemic approach to 'organisational excellence'. To start with the solution, without thoroughly understanding the broader needs of the organisation, is the tail wagging the dog. No quality method is a silver bullet. No quality method addresses the organisation as a system and the need to drive systemic quality and service excellence.So what should an organisation do, and where should it start? Leaders must first see the organisation, and the role of quality, as a systems approach. Quality isn't something you throw at a problem. It is a carefully executed plan that helps the entire organisation function successfully. In my view, there are five key elements to successfully implement quality and organisational excellence in a systemic way.1)There should be an overarching approach to quality, a plan. Where and how will the theory and tools of quality be applied? How will they be used to drive excellence? Every organisation should have a quality system that makes sense to them. At the cost of sounding cliché, one size does not fit all. The structure will be unique to each organization, but whatever they are, the elements of the quality system must be intentionally developed, implemented and measured. To look at a graphic of a quality system should tell us how quality is implemented in that business and how it drives excellence and customer service. This can be further complex if it's a conglomerate of companies with separate management teams, but there needs to be consistency across the Group. At the Max Group we call it the Max Quality System. 2)The Chief Quality Officer (CQO) / Quality Leader (QL) should be at the planning table and should report to the CEO. This is a clear commitment to the importance of quality in the organisation and makes it possible for the quality team to understand business strategy and appropriately support it. In turn, to support strategy, quality must supply both strategic and tactical approaches. This may involve a strategic (top down) organisational excellence program like Baldrige (what we call Max Performance Excellence Framework, the Tatas call it Tata Business Excellence Model) or EFQM Frameworks, in conjunction with a tactical (bottom up) business improvement methodology like Lean Six Sigma, Kaizen etc. In a sense, force change down from a strategic perspective, but also push change up. This way, everyone has an opportunity to participate in organizational transformation.3)To be effective, quality leaders must understand and speak the 'language of businesses - finance, as well as the language of 'managing change'. Too many Quality leaders are practitioners - tactical thinkers who are more absorbed with method than business needs and organizational outcomes. The CQO must first be a business manager before he/she is a quality manager. In addition, successful implementation of Quality requires broad consensus. Quality must be required, but it cannot be dictated. So, the CQO must bring together divergent groups within the business (in a Quality Council) to discuss organizational pain points, explain strategic needs and reach agreement on what's important and how to address it. Quality leaders must be seen as relationship builders, whose focus in on helping, not hindering, the work of the business.4) Everyone in the organisation must have an unrelenting, passionate focus on customers and service (Sevabhav). All the quality drivers (the quality system, quality strategy, excellence model, Lean, Six Sigma, ISO, etc.) are all there for only one reason - to reach out to customers in the most economical way, to provide what they want when they want it. If this approach is not taken, the Business will lose credibility, customers and money.5) Finally, quality must prove its value. It is the responsibility of Quality to both measure itself and the impact of its strategy and tactics. There must be a balanced set of Measures of Success (MOS), a scorecard if you like, for the business that shows where improvement is or isn't being made. If Quality doesn't demonstrate impact on cost, revenue, customer satisfaction, turnaround times, capacity creation, employee engagement, and passion, then stop doing it till you seek the right quality leaders and redesign your quality system.In summary, what we call quality can only have a real impact if it is viewed as strategic as well as tactical business solution. If we only see Quality as a tool, we will miss the huge strategic impact quality can have in transforming all areas of a business. The author is Senior Director - Quality and Performance Excellence at Max India
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When executives talk about talent they usually mean their company’s emerging or established leaders: highly-trained people with MBAs or an equivalent level of street smarts, and a track record of achieving business results. But this understanding of talent is both misleading and incomplete. It implies that there is a single kind of brilliant person who is capable of slotting into any context and handling any assignment, when the truth is that companies need a broad, rich variety of people with complementary talents, not just those with “leadership potential”. In our experience, senior executives need to be aware of three types of talented employee, their different career trajectories, and the different ways in which they should be developed to make the most of what they have to offer the company. Fast trackers: These are employees who are earmarked as future senior leaders. They might start out in one function associated with their educational background – engineering or marketing, for example – before taking on assignments in others to get more rounded experience. The main development challenge with fast trackers is giving them assignments that stretch their abilities while still allowing the function in which they are placed to draw on their previous experience and high energy levels. The department must get a meaningful contribution; the assignment should not represent a one-way gain. The assignment should also be for a period that is appropriate to the context, such as a full sales cycle or until a change is firmly embedded. Too often, fast trackers are rotated through assignments at set time intervals, such as every six months, which means that they become experts at only one thing – starting new initiatives. Specialists: These are great individual contributors who work with their intellects and creative capabilities. They can come from all sorts of backgrounds, from research and accounting to engineering and law. Their output is often highly regarded by others in their profession, and many receive regular calls from head-hunters. Developing the specialists poses a different set of challenges. Some specialists might want to move into management, often for better compensation, while others can be pushed into management when they surpass others in their specialism. However, this transition is likely to succeed only if they have a talent for managing people, have already received developmental experiences, and are accepted by their peers. Senior executives looking to switch a specialist into management should be cautious, and need to recognize that they are likely to need extra training in this area. For example, specialists often work in isolation from non-technical professionals, so they need to get used to working with colleagues in other disciplines, perhaps through secondments or participation in cross-functional teams. They also need limited-risk exposure to managing people, coupled with preparatory training in tasks such as delegation, communication, and making decisions when other people’s interests conflict with their own. It is also important to note that not all specialists will be interested in, nor cut out for, an executive role, but they still need to be kept fresh and energized in their specialist role. This requires varying their assignments and giving them time “off-line” to expand and deepen their learning. This could take the form of benchmarking visits to firms in other industries, or participation in professional conferences, for example. Unsung Heroes: These are the middle managers who not destined for senior leadership, but who possess highly developed management capabilities, deep knowledge of key processes, and play a critical part in making sure things happen. This talent category presents two types of challenges to the senior executives.The first, and perhaps the more difficult, arises when people imagine that their capabilities are greater than they really are. There will come a point when some of these ambitious and talented mid-level executives will learn that, in spite of their crucial past and continuing contributions, their bosses do not expect them to break through into the senior executive ranks. The challenge for the CXO is to help the person digest this setback; if they are successful, he or she may be able to keep the person contributing at the same high levels as before. Unsung heroes can start to feel undervalued when they see fast trackers bypass them and specialists gain more recognition. They can withdraw and start channeling more of their spare energy outside the firm. No one wins if they become cynical and bitter. Where they once served as enthusiastic agents for improvement, they can turn into passive – sometimes even active – resistors. The team leadermust pre-empt this loss of performance. To help talented executives come to terms with disappointment, he or she can propose new developmental and learning challenges. For example, they can be lent to other units or be put in charge of particular projects. In some situations, however, it might be best for all involved to encourage the employeeto broaden their horizons outside the firm. The team leader’s challenge is to anticipate this situation before talented individuals become toxic to their environment, rather than trying to deal with the fallout. The second type of unsung hero is the people who have accepted the reality of their mid-level management career without the necessity of being told by others. Indeed, they are happy with the level of responsibility they have, and seek no additional responsibility or pressure. Despite this, the alert team leaderwill ensure that such a person remains fully engaged in the business. One useful method is to maintain and perhaps increase their involvement in the resolution of significant and complex issues, special projects that lie beyond their immediate job scope. (Preston Bottger is Professor of Leadership at IMD, where he teaches on the EMBA and Orchestrating Winning Performance programmess. Jean-Louis Barsoux is a senior research fellow at IMD).
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An HR professional plays a dual role in terms of assisting employers as well as employees to achieve overall goals of the organisation. Interacting with people across all levels, understanding needs at different stages of organisational growth were some of the reasons that drew Indrayani Ghokhale, Manager, Human Resources at Clarice Technologies, to HR practice. Ghokhale feels HR needs to understand the changing expectations of the future workforce and adapt itself and be more collaborative with business goals as wellExcerpts:What has been the biggest achievement in your career?Performing under tight schedules and making different process run smooth has been my achievement.What have been the primary traits/qualities that have helped you attain your present position?Being approachable (interpersonal skills), transparent and adaptableWhat are the challenges you are facing in your organisation?Tapping the right talent and meeting expectation of people with respect to benefits are some of challenges I encounter.What are the steps a company should take to develop and motivate future leaders?Companies should empower people to help them make certain decisions. They should educate them to have the required skills and make them capable of performing in the role. Entertain their concerns in a way that they not only feel motivated but also are confident about the challenges that may come with the role.What is your rate of attrition? How do you prevent it?Our attrition rate is low. Attrition is prevented by continuously engaging with employees. Their issues are addressed and solution is provided as per their satisfaction.How do you retain talent in your company?Talent Management is a very important function. Open communication is encouraged. Realistic career plan along with transparent honest feedback ensure people continuously are aware of their strengths and area of improvements.What sets your company apart from other companies as far as work culture goes?Good Work (quality work with like-minded people) combined with a good work culture sets it apart from other organisations. Managers and management are approachable. At Clarice, one gets the option to work on a wide array of technologies. How do you track of employees' satisfaction or dissatisfaction?a) Approachable management: Employees are given the general direction in which the company is heading during regular Mixers or Talks in the company. They can discuss, make suggestions or put forth grievances to sr. management or HR. The open door policy helps this and allows employees to speak freely about what is not helping their performance in the current role.b) One-on-one meetings/ approachable senior members: Weekly status meeting are conducted for all the teams with their reporting project manager which ensures timely handling of any grievances.c) Open door policy: This ensures that people do not hesitate to put in forth their views or any conflicting situation which can lead to grievanced) Open work culture: This ensures that people do not need to feel intimated to speak to managers including CEO. Managers encourage direct dialogue with team members which portray a positive work environment.We also have a flat organisation structure, resulting fast pace work environment. HR keeps help desks which ensures all related issues are discussed and resolved in a timely manner.How HR has been important to the bottom line of the company?HR has played very important role in attracting right talent, developing teams and retaining them as per companies’ growth requirement.How has the downturn affected HR?Clarice has been profitable and independent throughout the downturn which has resulted in very low employee turnover rate. HR as a function has not been affected by downturn.How should HR be integrated with the core line of business?HR should be cosidered as a business partner in terms of aligning the business goals with the best possible practices which results in achieving maximum outputs with available resources.A recent survey has questioned HR's actual contribution in an organisation. Would you like to comment on it with particular reference to your organisation?HR's contribution is very important right from getting the right pool of people to retaining them with right set of policies and procedures. This cannot be ignored at any stage of organisational growth.If you could change three things about HR practices, what would they be?Adaptability: HR needs to understand the changing expectations of future workforce.Succession planning: Developing advanced workforce planning capabilitiesMaking HR role more collaborative with business goals rather than restricting it for core general routine procedures.(As told to Poonam Kumar)
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There's no question that emerging healthcare markets are expected to outpace global counterparts. Recent estimates show emerging markets hold a 21 per cent share of the worldwide sales of pharmaceuticals. And this is projected to reach 28 per cent and 36 per cent by 2015 and 2020, respectively. Among emerging markets, India is leading the way. In just one year, from 2010-2011, its $12.6 billion pharmaceutical market had grown by around 21 per cent. And India looks to add another 40 per cent by 2013. The growth is, however, surprising. Even though gross health insurance premia collected in 2011 increased by 33 per cent due to the expanding middle-high income bracket (>$2000 per year), the modest overall per capita disposable income continues to keep branded speciality medicines out of reach for many. Given the situation, such growth can be mostly attributed to the development strategies of the government and Indian-based pharmaceutical companies. While many products remain outside drug price controls, the Indian government, through the National Pharmaceutical Pricing Authority (NPPA), has set out to negotiate the prices of patented medicines based on external references and post-marketing reviews. And, India is systematically supporting local, generic producers. These efforts have paid off. Today, all but 2 of the top 10 pharmaceutical companies in India are indigenous generic producers (See Table 1). And since 2002, India has been the largest provider of generics in the world, reflecting the country's ability to use the non-enforcement of intellectual property rights to pursue import substituting industrialisation. Its future will be conditioned by India's capacity to extend such support in TRIPS (trade-related intellectual property) compliant ways. To give some background: In 1988 Indira Gandhi is quoted saying: "The idea of a better-ordered world is one in which medical discoveries will be free of patents and there will be no profiteering from life and death!" Yet not everyone, particularly patent owners, agrees. India has been disputing with Western drug companies since at least 1970, when the country's Patent Act, excluded pharmaceutical product patents and only recognised process patents for a period of seven years. Also in 1970, India imposed limits on multinational equity shares and capacity expansion. Over the next three decades, the number of licensed manufacturers in the country increased eightfold, while R&D expenditure shrank to one tenth of its former level. Meanwhile, the collective share of foreign subsidiaries in domestic pharmaceutical retail sales dropped from an estimated 85 per cent in 1970 to around 30 per cent in 2000. As Indian-owned firms took over from multinationals, local producers often launched products before their international patent owners who, for fear of reference pricing, typically delayed entry to await the outcome of price negotiations elsewhere. All clear consequences of India's relaxed policy towards honouring intellectual property rights. Since 2005, following the re-recognition of product patents for pharmaceuticals within the Third Amendment of the Patent Act, Indian firms dramatically increased their level of R&D spending, albeit focused nearly entirely on process innovation. Exports of TRIPS legal generics flourished as expected. But TRIPS confines the industry to the reprocessing of international drugs patented before 1995, and so there is genuine concern about the sustainability of India Inc.'s generic model. Yet the Indian government hasn't been the only player aiding the breakdown of patents. To contain prescription drug spending as part of the fast-growing US national health expenditure, the 1984 Hatch-Waxman Amendments to the Food, Drug and Cosmetic Act (FDC Act) lowered barriers to generic competition. The FDC Act offers producers of new generics an Abbreviated New Drug Application (ANDA) if they can demonstrate bio-equivalency with the approved pioneer product and certify that any patent surrounding the original compound is either invalid or has not been infringed. Once the information is filed, the patent holder has 45 days to bring an infringement suit. If the patent holder does not bring suit, an abbreviated application may be immediately approved. By 2004, Indian firms had filed 234 such ANDA applications; by 2008, the number had swelled to a total of 823 filings of which 433 were approved. In 2010, Indian firms dominated the US generics market with 33 per cent of 419 abbreviated filings. Incentivizing Indian generics producers to promote product R&D and rejuvenate their product lines past the TRIPS 1995 hurdle, the Hatch-Waxman Act also eliminated welfare losses related to intellectual property rights. In the cases of Prozac, Zantac, Taxol and Plantinol alone, bringing generics to market before patent expiration saved US consumers more than $9 billion. Yet, the benefits of some related strategies were often not so clear. Early attempts by some branded and generic producers to settle patent disputes in ways that effectively deferred entry, so-called reverse payments, were eventually banned by US courts. Other efforts, like those of branded manufacturers that launched their own branded generics in response were, however, innocuous: prices to patients and payers were lowered and pharmaceutical producers were, at least to some extent, able to circumvent reference pricing or arbitrage to enforce profit and welfare maximizing price discrimination. From a commercial perspective, a patent challenge is apt to severely cut the expected revenue to the patent owner. It is the market, i.e. the buyers' willingness to switch and the various price and non-price interactions at the time of entry, that determines the share of sales which remains with the incumbent. From a welfare point of view, a successful patent challenge eliminates the risk of granting exclusivity to an already existing technology; its impact on monopolistic pricing, and thereby on the level of welfare loss and the sharing of remaining benefits between consumers and producers, depends on the overall market response. All things being equal, the ability to challenge a patent increases the incentive to innovate. Yet this can only be achieved when resources are in place to innovate. Clearly, challenging patents provides a means for India Inc. to sustain its generic business model in a TRIPS compliant fashion. Advancing from here, however, requires the country or any other emerging economy to refocus R&D efforts on product technology and, for their own benefit, to insist on a nation-blind enforcement of intellectual property rights. And, looking larger to rewarding those responsible for R&D and intellect, standards and implementation principles must be clear to avoid stifling the benefits of technological progress and global commerce.(Ralf Boscheck is Professor of Economics and Business Policy at IMD where he directs the Breakthrough Programme for Senior Executives)
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Many call this a factor of a fast growing economy, many call it being at the right place at the right time. But I too was among the bright, young, hardworking high performers who got promoted to a managerial post rather early in the career. I still remember that day when our names were announced, I was on cloud nine and like many others who got promoted young, I too was a victim of “I have arrived syndrome”. The thought of how to lead a team never occurred to me. By then I had seen many team leads doing it and I had my version of doing it the right way. Completely unaware that I had a huge blind spot as far as my capacity for leading a team and managing people goes.As days passed by, yester years' good performer became an average performer and I was left wondering what had gone wrong? By the third month, the heat was on me. My manager was knocking my doors for better performance. The only training I ever received back then was on conducting performance review just at the start of our new financial year. The famous “Sandwich Feedback” was fairly simple concept to understand and I started doing reviews right, left and center. Finished 12 member team review in three days. Spoke some good stuff to them, then gave them hard feedback on things they were not doing and then again some pep talk at the end. In my review with my manager, I was often told to coach my team members. Not knowing too much on what exactly coaching is, coaching a team member meant to me makeing him sit for an hour and telling him how I was a great associate and how he needed to change things he was not doing well and get on board quickly.Good or bad / right or wrong – no one ever told me or rather it never occurred to me to seek feedback on how was I doing.Today, when I look back at those days, I laugh and tell myself “Now that was just not the way I wanted it to be.” But what option did I have? According to the First Rung Study conducted by DDI in India, one in four leaders at the frontline are promoted because they are technically superior and they learn to become better leaders by trial and error. While almost half of them learn it on the job, a good question to ask is, What is at stake?Visualise the confidence of the young, dynamic high performer, moving from all time high feeling to one of the toughest roles. He never thought that this one could be hitting him hard. To top it off, he was asked to swim alone in the choppy waves of leadership. It indeed does some damage to him and more so to his team which lacks direction and leadership. This is where the manager of this young leader plays a key role. More than 2/3rd of the times, it’s the manager who has a critical role in helping these young leaders shape their development. More than half the times either managers and young leaders don’t have a written development plan in place or young leaders don’t have enough time to focus on their development.“With great power, comes greater responsibility” – all know that’s what uncle Ben told Spiderman. I often use this line while speaking with young leaders. The responsibility to develop ourselves as leaders at any level rests in our hands and the hands of managers above us. We often get caught in the storm of things so much that we don’t get time for the single most important job we are entrusted by our organisation and that is to lead and develop people. So the next question is what can we do to help these leaders?In our experience, organisations swing at either end of the pendulum. Few, over- engineer the development process and few don’t develop them at all. Both are not the best ways to do it. One has to strike the right balance. Hence, it becomes imperative to identify few critical competencies which are relevant for the role and also highly developable in nature.(The author is Key Member Leadership, Development Dimensions international (DDI). The article is based on the report – “Finding the First Rung Leaders in China and India”)
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