Gautam Kumra, who heads McKinsey & Co. in Asia, has shared new insights into what makes Asia's leading owner-CEOs stand out. In a recent interview, Kumra emphasized their unique knack for balancing a long-term vision with short-term execution. It's a rare skill that sets them apart.
Kumra, also the author of Shapers and Founders: The Untold Stories of Asia's Extraordinary Owner-CEOs, pointed out how these leaders manage to get exceptional results from ordinary people. Their mission-driven approach has been a key factor in their significant role in value creation across the continent. His research drew from interviews with around 30 top executives, including India's Mukesh Ambani and Falguni Nayar, as well as Thailand's Sarath Ratanavadi.
Owner-CEOs have a track record of outperforming their peers in professional and state-owned enterprises. They deliver the best returns to shareholders and on invested capital, playing a major role in value generation. Kumra illustrated this with a story about Anand Mahindra, chairman of the Mahindra Group. Mahindra promoted an executive assistant to lead the company's South African operations based on personal qualities and life experiences rather than formal qualifications.
These leaders are renowned for offering 'stretch opportunities' and taking calculated risks on individuals, a practice that McKinsey itself mirrors. Kumra explained how McKinsey encourages its staff to continuously push their boundaries and rewards those who take initiative. This strategy fosters a culture of ongoing learning and innovation.
But Kumra also highlighted the challenges these owner-CEOs face, especially when it comes to leadership transitions. When founders hand over control to professional managers, companies often face difficulties, particularly in the first five years after the transition. The main issue is the founders' reluctance to delegate and their tendency to stay too involved, even as they near the end of their tenure.
Moreover, there's a risk these leaders could become disconnected from market realities if they don't adapt. They might also struggle to establish clear mandates for their successors. Professionals stepping into these roles often find it hard to manage because the company's unique, founder-centric style hasn't been institutionalized for outside leadership.
Kumra's insights reveal the complexities of leadership among Asia's owner-CEOs, showcasing both their strengths and the obstacles they face in sustaining their legacy. His findings highlight how crucial adaptability and strategic risk-taking are for achieving lasting success.
