Five years earlier, when senior managers at state-run Bharat Petroleum Corporation (BPCL) began retiring, the company realised it was going to be faced in due course, unless steps were taken, with a near-empty boardroom.

"BPCL recruited mostly in the 1980s and today this batch is occupying senior positions. We realised that these people will retire in the next decade and as talent gets out, the company is not ready to fill in those positions. We then decided to have a succession policy in place," says Dipti Sanzgiri, executive director, BPCL.

BPCL is not alone in realising this.

A recent survey by Harvard Business Publishing, where 24 companies have been interviewed, says gaps in an organisation's leadership pipeline have emerged as the biggest human resource (HR) challenge.

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These companies include public sector units and multinational companies of all kinds - IT/ITeS, FMCG, insurance, telecom and heavy engineering sectors.

The survey also shows that most organisations are trying to build a leadership pipeline internally, rather than buying it through a recruitment strategy.

"Leadership development was cited as a priority for most organisations. More than 50 per cent of organisations see a need to create a culture that encourages and has implemented a 'Leader as Teacher' model. Many organisations see that leadership is most effective when transferred from an organisation's leaders," the survey states.

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Calls for help

Probably this explains why Matt Barney, vice president-director, Infosys Leadership Institute, has been inundated with calls from both private and public companies to groom future leaders.

Barney is grooming the future leader for Infosys Technologies, India's second largest information technology services firm.

The Institute is focusing on shortlisting 750 future leaders for Infosys, something Barney thinks will come in handy when the company start exiting.

"Infosys might have started the process, but the number of calls I get from both private and public firms clearly shows the interest on the issue," he says.

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According to the survey, 88 per cent of the participating companies think there is a gap in leadership practice at their organisation.

The issue of having a leadership pipeline in place has also made A M Naik, chairman and managing director of Larsen & Toubro, India's engineering giant, spend around four hours every day on HR matters, which includes interviewing candidates, issues concerning organisation design, people movements at senior level, assessments, etc.

L&T, which is to now operate as nine independent companies, has developed several signature leadership projects such as the Management Leadership Programme and Leadership Development Programme.

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"The company has tied up with the premier Indian Institutes of Technology for domain-based programmes on construction, structural engineering and a legendary Graduate Engineer Trainee programme which has been the genesis for several wholetime Directors on L&T's Board," says Yogi Sriram, executive vice president, HR & administrative services.

Priority

The survey highlights that leading organisations are expected to invest a large portion - 41 per cent of their total budget - in leadership and management development of senior and middle managers within the organisations.

"If your organisation has instructor-led training as part of your leadership development programmes, it's important to develop a plan that supplements classroom training with other delivery methods to create a true blended learning experience. Companies that have made this transition have seen accelerated adoption and high retention rates," the survey states.

With inputs from Shivani Shinde.