In India, the executive awards season is upon us again. This is when corporate India, not content to take breakneck sales growth and soaring profits and stock prices as reward enough for its efforts, goes into a self-congratulatory tizz.

Leading the charge is The Economic Times Awards for Corporate Excellence, organised by the country's biggest English language financial daily.

The newspaper has tried to drum up a sense of excitement ahead of the awards, breathlessly telling readers on its front page that the judges for the event were holding their first meetings to decide the winners at a hotel in Bangalore. "As far as top-line muscle goes, this one's got to be the best quarter [sic]. On Wednesday, India Inc's first citizens, led by Infy's [Infosys Technologies] N.R. Narayana Murthy and Wipro's Azim Premji will go into a huddle at Bangalore's Windsor Manor," the article said, referring to the country's premier information technology entrepreneurs. "The high-powered group is enough to make the Sensex [the Bombay stock exchange index] shed a [drop of] sweat or two."

Leaving aside the hyperbole, however, it is easy to see why Indian executives are feeling good about themselves. This has been a year in which their entrepreneurial spirit has been on display as never before.

Acquisitions

For the rest of the world, the most visible manifestation of this has been the entry by Indian companies into global mergers and acquisitions (M&A). The Tata group, one of the country's largest private sector conglomerates, captured the most headlines with its £6.7 billion takeover of Anglo-Dutch steel producer Corus. But this was just one of many deals. Among the country's most aggressive entrepreneurs has been Tulsi Tanti, whose wind power company, Suzlon Energy, bought German turbine maker REpower Systems this year. But the real test of the competence of Indian managers is profit. Ridham Desai, Morgan Stanley equities strategist in Mumbai, estimates that net profit for the companies he covers will show average growth of 22 per cent in the year to March 2008 while net revenue will grow 36.4 per cent. Return on equity will slip slightly from 23 per cent a year earlier to 21 per cent but will remain respectably high.

This last measure is critical when comparing Indian executives with counterparts in other emerging markets. Unlike many of their peers in China, who often run state-controlled companies that benefit from easy credit from government banks and are largely unaccountable, Indian executives focus on returns and capital efficiency. This was also a year when managers from India and elsewhere in the subcontinent were feted for their rise up the ladder of multinationals. Prominent managers, such as PepsiCo's Indra Nooyi or Publicis' chief innovation officer Rishad Tobaccowala, have drawn attention to the deep pool of talent in the subcontinent and among the world's 25 million non-resident Indians.

Not surprisingly, this has led to an increasing focus on India by executive search companies as a source of managers for the domestic market and overseas firms looking to staff their global networks. Boyden, the executive search company, in a recent report, sought to define reasons Indian managers tend to be entrepreneurial. Apart from being well-educated and English-speaking, Indian executives have learned to be highly adaptable in the face of adversity in their domestic market.

"India's limited infrastructure, widely acknowledged as a longstanding liability, obliges people to develop their own resourcefulness," Boyden offers.

"The country's still cumbersome bureaucracy has encouraged inventiveness and creative thinking just in dealing with it," it says, adding: "The flip side is that values often get fuzzy or become casualties in the process."

Importance

One strong indicator of India's increasing importance as a source of talent is that it is beginning to show up in the profits of recruitment companies: one, Korn Ferry, said in the first quarter its Asia Pacific revenue grew 24 per cent, largely because of India and China.

India is also starting to attract M&A in executive search and human resources. In July, the UK-based executive search company Hat Pin bought Executive Access India for £6.9 million.

However, while no one doubts the quality of talent, there are concerns about quantity. With the economy now growing as quickly as that of China, India's quality business schools are no longer producing a surfeit of managers. In addition, with fat salaries and exciting careers at home, Indian executives have become far more reluctant to move abroad, particularly if this involves going to a market smaller than India or less attractive than, for instance, the US or Europe.

Noting the increasing demand for Indian talent, Boyden devotes a third of its report to how to attract and retain managers.

The heyday of the Indian executive may be here. But that might prove to be a two-edged sword for would-be domestic and foreign employers used to seeing the country as a limitless pool of cost-effective managerial talent.

Courtesy: www.archive.gulfnews.com, October 14, 2007