Shyamal Majumdar: What's your EI score?

HUMAN FACTOR

Indian CEOs are world leaders in IQ, but have a long way to go in tuning in to other people.

In 1973, Dr David C McCelelland, founder of McBer and Company (now part of the Hay Group, which is one of the world's leading management consultancy firms) wrote a seminal paper that created a stir in the field of industrial psychology.

Titled 'Testing for competence rather than intelligence,' the research concluded that competencies are best described as an iceberg, with a person's knowledge and skills representing the visible tip, while the personal characteristics (self-confidence, empathy, achievement orientation, and so on) represent the larger portion of the iceberg, hidden below the waterline. With the shelf life of knowledge and skills becoming shorter by the day, the below-the-water line competencies have a more substantive impact on how effectively a CEO performs on the job.

How do Indian CEOs fare in these competencies? The Hay Group, in partnership with Bharat Petroleum Corporation, has used the framework developed by McCelelland to provide some answers to this common question in a book called The Indian CEO, which was released by the Prime Minister last week.

The research is effusive in its praise for Indian CEOs and their ability to script smart success stories. In the process, it offers some other important insights as well. One of the most interesting findings of the research, which examined the traits, behaviours and motives of 30 of India's top CEOs, is that while they stand head and shoulders above their peers in other countries in the Intelligence Quotient, they are often found wanting when it comes to Emotional Intelligence (EI), which is the ability of tuning in to other people.

This is important as a recent study in an MNC showed that leaders who excelled in tuning in to people produced an average revenue growth of 12 per cent a year, over four years as compared to their peers who lacked this ability and lost an average of 8 per cent revenue per year in the same time frame and within the same company. While more than three-quarters of outstanding CEOs in the west score high on emotional intelligence, only about one-eighth of their counterparts in Indian companies have the ability of tuning in to other people, according to research done by a five-member team of Hay Group researchers.

Another important factor that inhibits the performance of Indian CEOs is the need for what the researchers call boundary management "" dealing with ministries, regulators, media and other external agencies. And surprisingly, the private sector is in no better position in this. While half of the Indian participants in the research spoke about their boundary management problems, not a single international CEO raised this issue.

Here's an example of this. A year after the Sarbanes-Oxley regulations was passed, the Hay researchers interviewed a senior executive in the US who was specifically in charge of changing the organisation to meet the stringent new standard. It would seem that if anyone in a private enterprise in the west would experience boundary management issues, it would be a leader in this role.

But this wasn't the case. The leader's focus during that year was not primarily on Washington, responding to congressional inquiries, nor fending off media intrusions, as an industry leader in India might imagine. Instead, the executive spoke about choosing, organising and inspiring the team; and about coaching subordinates to prepare them to take on larger leadership roles. The contrast to the painful experiences of the Indian CEOs couldn't have been starker.

Managing the environment is another chapter in the study that makes fascinating reading. Most Indian CEOs "" even the outstanding ones "" adopt a 'let's-keep-the-devils-away' approach when it comes to promoting a positive interaction between the enterprise and the ecosystem. Take networking, for example, which is an integral part of boundary management. When an Indian CEO needs to know something, the preferred method of seeking information is approach someone who knows, and just ask. This is in contrast to the networking common in other parts of the world. Network there could mean a web of relationships established early in life (usually at school), and used for business as well as social purposes throughout life.

In contrast, the Indian CEO usually does networking with a clear and immediate business purpose in mind. They reach out to whatever sources that are likely to have useful information even when he has had no previous connection or prior contact with that source of information. This style of networking may be bold but is likely to be less effective at a time when Indian business expands to other countries.

The Hay Group's research is commendable. For, it gives a useful blueprint of how Indian CEOs think, act and feel. More importantly, it kicks off a much-needed debate on the critical dimensions of leadership in today's world.