What kind of leader can be considered truly excellent and efficient?
The Asia President of McKinsey & Company ( McKinsey & Co ), Gautam Kumra, stated in an interview with CNBC that he discussed the differences between top executives and ordinary leaders, and identified the key factors that determine successful leadership.
Kumra says that the ability to handle contradictory ideas – focusing on both the long term and the short term, seeing the big picture as well as zooming in on details – is one of the core characteristics of an effective leader. He is the chief author of the book Shapers and Founders : The Untold Stories of Asia 's Extraordinary Owner - CEOs, which was published last month.
He also stated that the ability to enable "ordinary people to perform exceptionally" and a mission-oriented approach to doing things are other characteristics of the most successful individuals.
According to Kumra, the most effective owner-CEO has created a considerable amount of value in Asia, and therefore deserves further study. To write this book, he interviewed about 30 top executives from Asia, including Mukesh Ambani and Falguni Nayar from India, as well as Sarath Ratanavadi from Thailand.
"Compared to the profession CEO, owner and CEO are, as a category, the group that creates the most value and performs the best when compared to state-owned enterprises," he said. "They bring the highest returns to shareholders, and also have the highest return on invested capital. As a group, they collectively create the vast majority of value."
He recounted an experience of Mahindra Group, the chairman, Anand Mahindra: Mahindra once appointed an administrative assistant as the person in charge of the company's business in South Africa.
Kumra said that Mahindra believes this person possesses certain personality traits: "not someone with a strong knowledge base from books, nor someone who appears outstanding on paper, but rather someone who has gone through certain life experiences." This gives him confidence. "So he is willing to take a risk with him."
Expansion Opportunities
Kumra said that these CEO will provide "expansion opportunities," establish new businesses, and be willing to take risks in hiring; he pointed out that McKinsey also adopts a similar approach.
"What we're actually doing is providing employees with a series of opportunities for growth, keeping them constantly on the edge of learning. That's the first point," he said. "The second point is that we highly reward spontaneous and proactive actions. So it's not just about telling you what to do; what can you do that would surprise me?"
Kumra said that one of the hardest things for owner-CEO is transitioning power to the next leader. He added that, on average, companies don't perform well about five years after the transition from founder to professional manager.
“It’s difficult for them to delegate authority and let go. Even when they realize their time is coming to an end, they still interfere excessively,” he said. Moreover, if they become detached from market realities, they may also lose relevance; when appointing successors, clear guidelines for delegation of authority may not be established either.
He also stated that it is not easy for professional managers to learn how to run a company after taking over, “because these companies have always operated in a very personalized manner that is very suitable for the founders themselves.” “But it has not yet been truly institutionalized to the extent that outsiders can take over and steer the ship.”
