Talent crunch or failure of leadership?

The talent crunch facing India's manufacturing industry and its service sector as well, is not entirely a crisis arising out of the problem of an inadequate talent pool or in finding talent, but has roots in the failure of leadership at several levels in a high growth economic scenario.

If one were to look at the problem on a socio-economic canvas, on which the crisis lies, then we need to consider the failure of parents, to begin with, who are required to be leaders too, to identify and nurture innate talents of their children and give them direction to develop them. The role being played by educational institutions and educationists in creating and churning out stereotypical entities is another thing.

Coming to the world of enterprises on which this article will primarily dwell, the talent crisis that companies are finally talking about and experiencing is not really an issue of "attracting and retaining talent" but the result of several factors which were bound to surface sooner than later in an economy whose speed of progress is outstripping the pace of its preparedness.

A large number of people with leadership roles were so caught up in the frenetic pace of running enterprises and enlarging business baskets that they did not foresee that they would be grappling with such a crisis some day. Only a handful of visionary leaders foresaw it and had already begun taking various steps to prepare for the problem.

Failing to "recognise and reward talent", not by the crude yet important incentive of monetary gains but by more abstract and powerful means which lie in the qualities of good leadership is responsible for the problem as much as “not being able to place the right people in the right jobs”.

The most thought-provoking aspect of the problem in which, perhaps, the solution resides, is the fact that there are many companies which are not facing a talent crunch. How come?

When a promoter and CEO of a small-to-medium scale-turned enterprise was asked if he was facing this crisis he replied, "To my knowledge, we don't have such a problem. If there are any problems it must be because of me". The essence of this statement points to two essential traits, among others, of good leadership -- humility and the guts to own up to one's faults.

While speaking to a gathering comprising many seasoned and older CEOs of the automotive industry at a conference of the Automotive Component Manufacturers Association of India in September this year, Bajaj Auto's comparatively young and dynamic Managing Director, Rajiv Bajaj, must have definitely caused some discomfort among the leaders of industry when he most candidly spoke about the past frailties of his organisation in a presentation titled "Inside Out". The crux of his message was -- most problems, if not all, are inside and the solutions can also be found there. How many CEOs in India’s automotive industry can identify, recognise and admit what Bajaj did that September day?

The issue of possessing good talent in an enterprise does not necessarily pertain to highly skilled engineers or prestigious institution-educated MBAs, but to talented people working in different areas from varying backgrounds who are neither MBAs nor engineers but are equally important and capable to take the company forward.

Every individual has some skill or the other. If he or she does not have a particular skill that is required then the person has the capability of developing it and applying it where it is required.

While good and effective leadership will trickle from top to bottom and positively impact an enterprise, bad and ineffective leadership will cause damage to the enterprise as it percolates down and creates a malaise that is bound to become a serious problem some day. The quality of talent that a company possesses is the direct outcome of its leadership and the sound and just work environment that it promotes.

Why hunt for talent when you may already have adequate, untapped talent within your enterprise? Why are you afraid to reward talent adequately irrespective of how it may be viewed among less-deserving co-workers in your company? These are some of the piercing questions that leaders of enterprises need to ask themselves and introspect on when thinking about the talent crisis that they are facing. But thinking and introspecting is one thing and acting another.

An advertisement for an institution which was promoting its executive education programme for leadership contained a slogan which read, “If people don’t move up, they move out”. This copywriting slogan points to one of the most crucial factors of why talent is moving from one place to the other. One need not think that the term “moving up” only implies some form of promotion but it can take a variety of other forms of rewarding people who deserve to be recognised and rewarded.

Though no one talks about it openly, while automobile and auto component organisations are busy signing deals that are taking their companies ahead in a business sense, and their CEOs are photographed by the media shaking hands with their highly-respected overseas peers, how many realise and admit the malaise within their enterprises which are killing or turning talent away? How many leaders can see, admit and then act to check the cancerous co-existence of mediocrity at various levels coupled with corruption and bureaucracy beneath the business-astute and professional image of their enterprises?

A recent instance comes to mind of a talented and hardworking executive with a large Indian vehicle manufacturer. He was excited to be part of the company’s restructuring process (as a result of its high growth trajectory) which would elevate and relocate him if he passed a series of tests and interviews. Merriment followed his passing and he relocated with his family. A few months went by and with them set in frustration and high levels of stress that arose from unrealistic performance pressures from his seniors and affected a work-life balance that he earlier enjoyed. The executive quit to take another assignment and his former employer lost talent.

In another instance a harassed assistant working for an auto component company was offered a mutually agreed position at another company only to find that she had been misled by the Head of the HR department and involved in activities which had made her bitter and disgruntled. The fact that HR departments and their personnel are getting sizeable importance these days shows that many entrepreneurs have realised that human capital is one of the, if not the most, important wealth of an enterprise. However most Indian auto component companies, for instance, are still run along feudalistic lines with very little care for their employees. And those with HR departments are still trying to experiment with methodologies or having to deal with a lot of interference from the top.

In his survey of talent in a recent edition of The Economist newspaper, Adrian Wooldridge pertinently says "clearly there is more to good management than hiring the best and the brightest. Among other things, it requires rewarding experience as well as talent, and applying strong ethical codes and internal controls".

There is no doubt that as the economy grows and enterprises increase capacities or diversify their product base they will need fresh talent. Undoubtedly one of the most vital solutions to the problem of finding good people is for the automotive industry to work very closely with academia – something they should have done a decade ago. It is well known that the triad automotive industries have for years been keeping close links with universities, not only for improving awareness on the automotive industry, but in developing curriculum as well as utilising these seats of learning for carrying out research and development in a wide range of automotive engineering. This is one aspect where Indian automotive industry trade organisations could have played a major role but, barring the few studies they may have jointly worked on, failed to do so.

In many ways the talent crisis being faced by the Indian automotive industry is a failure of leadership across several levels and the sooner people realise that and take corrective action the better would be their position to handle this predicament. The problem most definitely lies within and not without which Rajiv Bajaj most aptly conveyed by citing a quotation by the great psychologist Carl Gustav Jung who said, “Those who look outside dream, those who look inside awaken”.

(Published in 2006 anniversary edition of Autocar Professional Magazine)