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Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
Leadership Driving Growth & Managing Talent in SMEs
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Leadership Driving Growth & Managing Talent in SMEs

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Leadership Driving Growth & Managing Talent in SMEs …

Leadership Driving Growth & Managing Talent in SMEs

CEO's Workshop

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  • 1. Leadership Driving Growthand Managing Talent in SMEsCEOs’ WorkshopFEBRUARY 10TH, 2012 MOHINISH SINHA
  • 2. Agenda POINTS OF DISCUSSION 1 SMEs in India SME i I di 2 Talent Challenges 3 Leadership Styles© 2009 Hay Group. All rights reserved 2
  • 3. SMEs In India
  • 4. SMEs in India – Key Characteristics THE TANGIBLES There are certain tangible aspects that relate to SMEs in India India. Size of the company − Turnover ranges between Rs. 100 to 400 crores Thrust area is usually one/few business line/s, as opposed to a diversified business − Focus is on leveraging one or two core competencies Depending on business strategy and industry, their customers could range from the g gy y g very small (for example, retail) to very large (for example, institutional) − Adds another shade of complexity to their operations Range from labour intensive or capital intensive, to semi automated businesses − Depending on the type of i d D di h f industry and scope of operations d f i Play an important role in India’s growth story, with 40 per cent contribution to exports* − Expected to contribute 22 per cent to Indias GDP in 2012* *Source: ASSOCHAM study, 2010© 2009 Hay Group. All rights reserved 4
  • 5. Here is Where The Irony Lies THE CHALLENGES FACED Most SMEs owe their growth to individual i di id l talent y But they don’t know how to proliferate this talent and nurture it© 2009 Hay Group. All rights reserved 5
  • 6. Talent Challenges
  • 7. The Intangibles to SMEs in India ... 1 TALENT AND PEOPLE CHALLENGES; AREAS OF OPPORTUNITY Workers with varying skills across ‘Design’ of formal systems and Design the organization, each requiring processes – HR and non-HR training customized to them Cash flow is the focal point for growth in Semi-skilled workers at the lowest levels most SMEs due to nature of the sector; are mostly contractual and have the thus ft th often growth happens without formal th h ith t f l lowest level of responsibility systems in place Complexity of managerial challenges As business owners and heads come to increases as one moves up the ladder p realise business case for institutionalizing Junior managers have to be trained on formal systems, a transformation is tackling IR at manufacturing level currently underway as more awareness spreads through the sector Middle managers to be trained on interpreting the business vision into The ‘design’ of the formal systems and design operational tangibles processes is to be paid attention to, as it will lay the foundation for future business Senior managers to be trained on scalability capturing the business vision and enabling buy-in for it from the rest of the organization© 2009 Hay Group. All rights reserved 7
  • 8. The Intangibles to SMEs in India ... 2 TALENT AND PEOPLE CHALLENGES; AREAS OF OPPORTUNITY ‘Execution’ of the planned Execution Alignment of organizational strategy for instituting formal structures with business systems and processes aspirations Execution of the strategy for systems and Organizational structures need to be processes is just as important as the designed to support business aspirations ‘design’ of it Required number of layers, so that senior Emphasis on obtaining buy-in from all managers can focus on strategic tasks as stakeholders – especially employees – p y p y opposed to daily fire-fighting pp y g g for execution to be successful Post buy-in, managers in-charge of rolling out the execution of their respective department / business units needs to be trained on the roll-out Important to reinforce key messages to sustain the systems© 2009 Hay Group. All rights reserved 8
  • 9. The Intangibles to SMEs in India ... 3 TALENT AND PEOPLE CHALLENGES; AREAS OF OPPORTUNITY Where the SME is a family-owned business (FOB), the army of loyalists family owned (FOB) bring their own set of strengths and weaknesses to the table Every family-owned SME would have the strong support of loyalists who have been part of the organization for a long tenure and are close to the owner These loyalists represent an important list of strengths: − Bring maturity in the organizational thinking − Provide stability to the top management team − Experience th E i through th organization’s good and t h the i ti ’ d d tough ti h times At the same time, there are areas of improvement: − Tend to create sub-cultures within their own departments; thus the business vision is cascaded to their team not through the owner’s eyes but the loyalist s eyes owner s loyalist’s − Having spent a long tenure, they may become conservative or risk-averse in their approach to the business − Unless growth opportunities are created and presented for high-potentials, these high-potentials hi h t ti l may b become d demotivated owing t th well-entrenched l d hi ti t d i to the ll t h d leadership© 2009 Hay Group. All rights reserved 9
  • 10. The Intangibles to SMEs in India ... 4 TALENT AND PEOPLE CHALLENGES; AREAS OF OPPORTUNITY Talent Management and Succession Planning The need for a formal talent management system in order to attract, retain and engage the best talent System where the top talent can be rotated across functions, so as to create well- rounded leaders Succession planning should be focussed on promoting the ‘next in line’ – high potentials who are being groomed for future leadership roles© 2009 Hay Group. All rights reserved 10
  • 11. To Professionalize or Not? BRINGING PROFESSIONALS INTO THE BUSINESS Answering the key questions on the journey to professionalization When is the right time to professionalize? − Most entrepreneurs don’t thrive on the role for day-to-day execution, which fuels the desire to bring in a professional; or the need for expertise in specific businesses; or something more urgent; a crisis that needs to be dealt with. Will professional carry my legacy forward? − Most owners nurture their business as they would, their children. The business is inextricably intertwined with their own identity identity. Will the professional respect my values? − The family structure provides the unique context of passing on values in a web of reinforced actions over time, while the professional brings his own values to guide his work ethics Will the professional commit to my business even in adversity? − Professionals are generally wired to deliver pre-set y-o-y objectives Where and h Wh d how d I fi d th right professional? do find the i ht f i l? − Often, the owner has to personally get involved© 2009 Hay Group. All rights reserved 11
  • 12. Leadership Styles
  • 13. The Responsibility of the Leader ONUS ON LEADERSHIP “You don t lead by hitting people over the head – that’s assault not You don’t that s leadership. ” – Dwight Eisenhower What do effective leaders do? Do they berate, cajole and plead? Do they collude, or do they simply lead by example? The most effective leaders use a collection of distinct leadership styles – each in the right meas re at just the right time measure, j st time. The ability to combine these styles and put them into action is not easy, but does pay off in performance.© 2009 Hay Group. All rights reserved 13
  • 14. Sample Study of Leadership Styles … Case 1 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 24 leaders 14
  • 15. Organizational Climate Study … Case 1 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 24 leaders 15
  • 16. Impact on Organizational Climate … Case 1 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 24 leaders 16
  • 17. Sample Study of Leadership Styles … Case 2 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 4 leaders 17
  • 18. Organizational Climate Study … Case 2 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 4 leaders 18
  • 19. Impact on Organizational Climate … Case 2 LEADERSHIP RESEARCH© 2009 Hay Group. All rights reserved Source: Hay Group research on leadership styles of 4 leaders 19
  • 20. Insights From The Research LEADERSHIP IMPACT ON ORGANIZATIONAL CLIMATE A Hay Group study suggests the higher people rise in an organization, organization the more likely they are to over-rate themselves and develop blind spots that hinder their effectiveness as leaders. Dominance of the directive style of leadership Lack of leadership depth, given that only 1 -2 leadership styles emerge as the most prominently used As a result of the inadequacy in leadership, the organizational climate is perceived as largely demotivating© 2009 Hay Group. All rights reserved 20
  • 21. What Can You Do About It? LEADERSHIP IMPACT ON ORGANIZATIONAL CLIMATE The most effective leaders are those who lead by example example. Talent management processes, such as recruitment, performance management, career development, and succession planning, need to be clearly laid out and institutionalized. There is an urgent need to systematically invest in building the leadership bench strength, to ensure a future supply of leaders Despite the lack of focus on capability building so far, that seems to be changing, as companies have started realizing the criticality of people capability as the driver of strategy for their business Loyalty is a valued trait; however, leaders need to assess this aspect from all angles in order to capitalise on its pros and work on developing the cons into strengths© 2009 Hay Group. All rights reserved 21

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