Gautam Kumra, Chairman of McKinsey & Co. (McKinsey) Asia;
What separates truly great and effective leaders from other leaders?
Gautam Kumra, chairman of Asia at consultancy McKinsey & Company, spoke in an interview with CNBC about what distinguishes top executives from the crowd and helps remove the key factors that determine successful leadership.
The ability to deal with conflicting ideas – to think both long-term and short-term, to see the big picture while looking at things under the microscope – is one of the greatest characteristics of effective leaders, said Kumra, lead author of the book “Shapers and Founders: The Untold Stories of Asia’s Extraordinary Owner-CEOs,” published last month.
Skills and a mission-driven approach that lead to “extraordinary performance” are also hallmarks of the most successful people, Kumra said.
Kumra, who interviewed around 30 of Asia’s top executives for the book, from India’s Mukesh Ambani and Falguni Nayar to Thailand’s Sarath Rattanavadi, says the most effective owner-CEOs are responsible for a significant portion of value creation in Asia and are worth highlighting for further study.
“Owner-CEOs, as a category, are the ones who create the most value and the best performance compared to professional CEOs and state-owned enterprises,” he said. “They have the highest return to shareholders and the highest return on invested capital. Collectively, they are creating the bulk of the value as a category.”
He shared how Mahindra Group Chairman Anand Mahindra appointed an executive assistant to head the company’s South African operations.
Mr. Anand Mahindra, Chairman, Mahindra & Mahindra Ltd.
CNBC
Mr. Mahindra wanted this person to be someone who would give him confidence, “not someone with bookish knowledge or someone who sounded very good on paper, but someone who had gone through that kind of life experience,” Mr. Kumra said. “That’s why he took the risk.”
opportunity to stretch
Kumra said these CEOs “provide stretch opportunities, build new business, and take risks on people,” noting that McKinsey takes a similar approach.
“In fact, we give our employees a series of stretching opportunities to ensure they’re always on the cutting edge of learning, and that’s one of them,” he said. “Secondly, we really reward self-direction, so I don’t have to be the only one telling you what to do. What can you do that surprises me?”
One of the most difficult things for an owner and CEO is the transition to the next leader, Kumra said. He added that in the transition from founder to professional, companies typically perform poorly five years after the transition occurs, on average.
“It’s very difficult for them to delegate and let go. Even when they know their time is running out, they’re still too involved,” he said. Also, if you diverge from market realities, you may lose relevance, and you may not be able to set clear mandates when hiring a successor.
It can also be difficult for experts to come on board and learn how to run a company, “because they’ve run the company in a very specific way that suits them,” Kumra said. “But there is still no institutionalized way for someone from the outside to come in and take the reins.”
