The leadership challenge

01 Feb 2013 CW Team

GURDEEP S HORA writes about building, nurturing and retaining talent for the construction industry.

There's a reason why the world is obsessed with 'leadership' in every arena. It's because the right leader, who symbolises the organisation's vision, direction and ethos, can make a difference. But where are the professional leaders of the construction industry? Unlike the heads of IT, automobile or pharmaceutical companies, one can hardly recall any names; those that come to mind are usually names of promoters or owners of the companies.

Differentiation in leadership needs

The leadership needs of an organisation vary depending on a number of fundamental factors and it's important for promoters and human resource professionals to understand the nuances. An organisation requires different skill sets at different layers of leadership at different stages of growth. Our attempt is to analyse and explain the issues concerning the top two layers of leadership and functional (CXO) leadership levels like Chief Financial Officer, Chief Technology Officer, Chief Human Resource Officer (CHRO), Chief of Projects, Chief of Sales & Marketing etc.

In manufacturing and services, there is a clear focus on the nature and range of products and services offered and, thus, a greater congruity of skills needed at the CXO leadership levels. Most professionals usually grow linearly within the same work domain till the CXO levels. For example, a production engineer grows to be a production manager and then a general production manager, and so on. Therefore, their deliverables and key result areas also pertain to their area of specialisation. The organisations are therefore structured in a homogeneous manner and the 'functions' converge smoothly into overall organisational objectives.

It's not the same in the construction industry, as our experience of over two decades with HR and talent issues, both in India and the Middle East, has taught us. While other industries usually grow by excelling in a range of similar products and services, the construction industry is built through building blocks of independent projects. For large organisations, these projects are often in entirely different areas of expertise. While one may be a power project, the other could be a township or chemical plant. Even when the projects are in similar areas of expertise, like housing or commercial complexes, each project is usually treated as standalone with its own specific areas of concern and complexities. Thus, most project managers are not just responsible for production and timely delivery of work but critically involved in ensuring quality and completion within budgeted costs, apart from maintaining a healthy relationship with employees and local bureaucracy.

The dilemma of middle management

They are expected to work like CEOs of their projects but given limited leeway in key decision making. Further, except in large organisations, this divides talent and confines it to specific silos. There is a fundamental lack of integration of human resources and available talent and the road to career growth is often not visible to younger managers. This further limits knowledge sharing and enhancement through peer interaction and exposure. The focus is on immediate deliverables and not organisation building through growth and development of people. While technology and materials have advanced dramatically, very few senior managers get the opportunity or time to learn about them.

This restricted focus leads to the creation of tunnel vision; managers also tend to limit their mental engagement to current projects. Or they start looking outwards for new projects and jobs even while they are at a critical phase of their current assignment. Such discontinuities and attrition are detrimental to the long-term well-being of the organisation. In fact, the construction industry has the highest CXO level attrition, almost twice that of the average industry levels.

Some time ago, a study by Synergy asked many CEOs and managing directors of construction, infrastructure and related industries a single question: "Is adequate CXO and functional leadership talent available in India to make the construction industry globally competitive; and if not, what's missing?"

While almost everyone was unanimous in saying that there was a talent crunch as far as professional leadership, many organisations asked us to help them search for and recruit experienced Indian talent from the Middle East. The responses made it evident that the industry has a long way to go before it gets the confidence to rub shoulders with the best in terms of technology, quality, skills and processes. Here are some findings of the survey:

The current leadership scenario

The construction industry in India is grappling with some fundamental concerns. Most private-sector organisations have extensive promoter family involvement and that determines their key decision-making process and leadership style. This has inhibited the development of a professional decision-making culture and consequent corporatisation of the industry. While many organisations are growing to a level where it is becoming increasingly difficult for the promoters to manage the size and complexities, the delegation of responsibilities is happening reluctantly. Thus, many fundamental flaws remain in the way leadership at the levels next to the promoter or managing director and the CXO levels is perceived and evolved. Further, the benchmarking study reveals that the construction industry is struggling with the issue of leadership talent acquisition and retention.

Here are some key elements of the malaise affecting the retention and contribution of CXOs:

1. Single-minded focus on projects in hand to the exclusion of long-term objectives.
2. Inadequate engagement and alignment of CXOs with the company and its goals.
3. Little peer interaction and sharing of experience at CXO levels.
4. Poor focus on career planning and training and development of leadership talent.
5. No vision of long-term career growth path.
6. HR primarily treated as a recruitment function with little contribution to business dynamics.

A case in point

Some time ago, we were called in to assist a large construction organisation that was floundering while trying to move into the big league. The company was having difficulty in retaining key talent although it was paying its staff above the industry median level. The initial discussion revealed there was no easy way out; structural changes would be needed. Many typical industry weaknesses were identified after a systematic HR audit. Many were fiercely denied and debated; this process led to realisation and acceptance of the steps needed.

Starting with a clear understanding of the top management's perspective of current business, areas of concern and short and long-term growth plans, discussions were held with all senior managers to identify their strengths, concerns and alignment with company objectives. An analysis of current competencies with reference to competencies required and the company's cultural environment was carried out. The resultant strategies were discussed with the top management to achieve their buy-in. Thereafter, a number of initiatives were taken to share the company's vision for the next five years as well as spell out concerns and invite suggestions from CXOs to help chart a future roadmap. For the first time, they felt involved and took ownership for difficult decisions that had to be taken. Simultaneously, steps were initiated to integrate critical strategic functions through a plan to corporatise the top management. An individual career growth plan was made for each CXO (and managers with CXO potential). Based on the gaps identified, we helped the company select and recruit key leadership talent with clear sharing of vision and challenges. And a CHRO was selected who was made an integral part of the strategic management team. Today, the organisation is considered amongst the top professional companies with a healthy growth rate and substantially lower levels of attrition.

HR's strategic impact

There is a dire need to focus on quality in all aspects of the construction industry by implementing robust processes across functions. The tendency to short-circuit processes at the first instance of trouble, delay or cost has to be curbed. Construction industry CHROs must acquire the expertise to attract multi-skilled managers and focus on excellence in people practices to develop an atmosphere where employees are given a long-term career plan for growth and learning by engaging them in partnering in the organisation-building process.

GURDEEP S HORA writes about building, nurturing and retaining talent for the construction industry. There's a reason why the world is obsessed with 'leadership' in every arena. It's because the right leader, who symbolises the organisation's vision, direction and ethos, can make a difference. But where are the professional leaders of the construction industry? Unlike the heads of IT, automobile or pharmaceutical companies, one can hardly recall any names; those that come to mind are usually names of promoters or owners of the companies. Differentiation in leadership needs The leadership needs of an organisation vary depending on a number of fundamental factors and it's important for promoters and human resource professionals to understand the nuances. An organisation requires different skill sets at different layers of leadership at different stages of growth. Our attempt is to analyse and explain the issues concerning the top two layers of leadership and functional (CXO) leadership levels like Chief Financial Officer, Chief Technology Officer, Chief Human Resource Officer (CHRO), Chief of Projects, Chief of Sales & Marketing etc. In manufacturing and services, there is a clear focus on the nature and range of products and services offered and, thus, a greater congruity of skills needed at the CXO leadership levels. Most professionals usually grow linearly within the same work domain till the CXO levels. For example, a production engineer grows to be a production manager and then a general production manager, and so on. Therefore, their deliverables and key result areas also pertain to their area of specialisation. The organisations are therefore structured in a homogeneous manner and the 'functions' converge smoothly into overall organisational objectives. It's not the same in the construction industry, as our experience of over two decades with HR and talent issues, both in India and the Middle East, has taught us. While other industries usually grow by excelling in a range of similar products and services, the construction industry is built through building blocks of independent projects. For large organisations, these projects are often in entirely different areas of expertise. While one may be a power project, the other could be a township or chemical plant. Even when the projects are in similar areas of expertise, like housing or commercial complexes, each project is usually treated as standalone with its own specific areas of concern and complexities. Thus, most project managers are not just responsible for production and timely delivery of work but critically involved in ensuring quality and completion within budgeted costs, apart from maintaining a healthy relationship with employees and local bureaucracy. The dilemma of middle management They are expected to work like CEOs of their projects but given limited leeway in key decision making. Further, except in large organisations, this divides talent and confines it to specific silos. There is a fundamental lack of integration of human resources and available talent and the road to career growth is often not visible to younger managers. This further limits knowledge sharing and enhancement through peer interaction and exposure. The focus is on immediate deliverables and not organisation building through growth and development of people. While technology and materials have advanced dramatically, very few senior managers get the opportunity or time to learn about them. This restricted focus leads to the creation of tunnel vision; managers also tend to limit their mental engagement to current projects. Or they start looking outwards for new projects and jobs even while they are at a critical phase of their current assignment. Such discontinuities and attrition are detrimental to the long-term well-being of the organisation. In fact, the construction industry has the highest CXO level attrition, almost twice that of the average industry levels. Some time ago, a study by Synergy asked many CEOs and managing directors of construction, infrastructure and related industries a single question: "Is adequate CXO and functional leadership talent available in India to make the construction industry globally competitive; and if not, what's missing?" While almost everyone was unanimous in saying that there was a talent crunch as far as professional leadership, many organisations asked us to help them search for and recruit experienced Indian talent from the Middle East. The responses made it evident that the industry has a long way to go before it gets the confidence to rub shoulders with the best in terms of technology, quality, skills and processes. Here are some findings of the survey: The current leadership scenario The construction industry in India is grappling with some fundamental concerns. Most private-sector organisations have extensive promoter family involvement and that determines their key decision-making process and leadership style. This has inhibited the development of a professional decision-making culture and consequent corporatisation of the industry. While many organisations are growing to a level where it is becoming increasingly difficult for the promoters to manage the size and complexities, the delegation of responsibilities is happening reluctantly. Thus, many fundamental flaws remain in the way leadership at the levels next to the promoter or managing director and the CXO levels is perceived and evolved. Further, the benchmarking study reveals that the construction industry is struggling with the issue of leadership talent acquisition and retention. Here are some key elements of the malaise affecting the retention and contribution of CXOs: 1. Single-minded focus on projects in hand to the exclusion of long-term objectives. 2. Inadequate engagement and alignment of CXOs with the company and its goals. 3. Little peer interaction and sharing of experience at CXO levels. 4. Poor focus on career planning and training and development of leadership talent. 5. No vision of long-term career growth path. 6. HR primarily treated as a recruitment function with little contribution to business dynamics. A case in point Some time ago, we were called in to assist a large construction organisation that was floundering while trying to move into the big league. The company was having difficulty in retaining key talent although it was paying its staff above the industry median level. The initial discussion revealed there was no easy way out; structural changes would be needed. Many typical industry weaknesses were identified after a systematic HR audit. Many were fiercely denied and debated; this process led to realisation and acceptance of the steps needed. Starting with a clear understanding of the top management's perspective of current business, areas of concern and short and long-term growth plans, discussions were held with all senior managers to identify their strengths, concerns and alignment with company objectives. An analysis of current competencies with reference to competencies required and the company's cultural environment was carried out. The resultant strategies were discussed with the top management to achieve their buy-in. Thereafter, a number of initiatives were taken to share the company's vision for the next five years as well as spell out concerns and invite suggestions from CXOs to help chart a future roadmap. For the first time, they felt involved and took ownership for difficult decisions that had to be taken. Simultaneously, steps were initiated to integrate critical strategic functions through a plan to corporatise the top management. An individual career growth plan was made for each CXO (and managers with CXO potential). Based on the gaps identified, we helped the company select and recruit key leadership talent with clear sharing of vision and challenges. And a CHRO was selected who was made an integral part of the strategic management team. Today, the organisation is considered amongst the top professional companies with a healthy growth rate and substantially lower levels of attrition. HR's strategic impact There is a dire need to focus on quality in all aspects of the construction industry by implementing robust processes across functions. The tendency to short-circuit processes at the first instance of trouble, delay or cost has to be curbed. Construction industry CHROs must acquire the expertise to attract multi-skilled managers and focus on excellence in people practices to develop an atmosphere where employees are given a long-term career plan for growth and learning by engaging them in partnering in the organisation-building process.