February 15, 2011

Leadership Lessons from India

Vineet Nayar, CEO of the Indian IT services giant HCL, likes to rock the boat. Asked what he wished his greatest legacy to be in five years, Nayar responded without missing a beat: “That I have destroyed the office of the CEO.” He led the charge that gave rise to the company’s bracing motto, “Employee first, customer second”—an idea that would give many managers hives. And he invited employees to evaluate their bosses and their bosses’ bosses; then he posted his own review on the firm’s intranet for all to see, and urged others to follow his lead.

What’s Nayar up to? Pressed to explain, he told us that he sought enough “transparency” and “empowerment” in the company that “decisions would be made at the points where the decisions should be made”—that is, by employees, where the company meets the client. Ideally, he said, “the organization would be inverted, where the top is accountable to the bottom, and therefore the CEO’s office will become irrelevant.”

Nayar might be dismissed as a loosely tethered idealist except that his company, with nearly 55,000 employees and a market cap of $24 billion, is growing even faster than India’s red-hot economy. He’s doing something right, and, as we found in a yearlong study of Indian executives, his leadership approach is closer than not to the norm among India’s biggest and fastest-growing companies.

To discover how Indian leaders drive their organizations to high performance, our research team interviewed senior executives at 98 of the largest India-based companies. (See the sidebar “How We Did Our Study.”) In conversations with leaders at Infosys, Reliance Industries, Tata, Mahindra & Mahindra, Aventis Pharma, and many others, a picture emerged of a distinctive Indian model. None of the people we interviewed suggested that their companies had succeeded because of their own cleverness at strategy or even because of the efforts of a top team. They didn’t mention skill in financial markets, mergers and acquisitions, or deal making—talents that Western CEOs often claim underpin their companies’ performance. Almost without exception, these leaders, like Nayar, said their source of competitive advantage lay deep inside their companies, in their people.

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