A company's ability to create social value, an instrument necessary for creating shareholder value, is directly tied to the CEO's ability to demonstrate trustworthiness, the employee's perception of his career in the organisation and the continued talent the company can generate. From this viewpoint, addressing the talent shortage ultimately rests with the chief executive officer and his commitment to developing a strong second layer of senior executives.

The real waste in today's corporate environment is the debris and miscellany of failed human resources initiatives, executive confusion, rushed promotions and unproductive turnovers. While amateur minds often conclude that such outcomes are probably impossible to foresee given the nature of business-economic changes, our predictors are invariably off. By arming senior executives with mentorship abilities, companies can expect to enrich employee talent and accelerate business performance.

Where is the talent issue?

There is a reason for talent deficiency. Organisations rely heavily on human resources functions primarily to motivate and manage career progression. This process has not significantly improved the management rapport, increased talent or reduced turnover. Instead, it has created unintended behaviours — a dread of performance reviews, internal complexities and greater disconnect.

It is not that there is a real talent shortage. The shortage is in CEOs' commitment to develop talent that drives operational talent. Specifically, a focused effort is needed to mentor senior executives who consequently can motivate and energise middle and junior employees.

From a strategic perspective, India's growth opportunity is shrinking with its inflationary pressures, global economic shifts and hyper-competition within the country. It is time companies implemented new ways of talent development.

“If the senior executives' involvement in mentoring is vital to a company's long-term performance, why aren't CEOs committing more time for this function? What's stopping them from becoming mentors?” Ananthmurthi, professor in one of India's leading business schools, posed the question to the author.

The answer to long-term company growth starts with the CEO's outlook of an employee's career. Those who envision a short stint at the helm, often tend to stop with the financial performance as a cyclical indicator of a shorter tenure. For longer-term success, CEOs must believe that the company's future depends upon its ability to create social value — for its customers, employees and vendors without compromising shareholder value.

Many executives do not understand that they are role models, a critical aspect of mentoring. “I am not going to be running the company forever, and I need to make sure there are strong people at the top when I leave,” Ms Sengupta, a partner with a leading Hyderabad company emphasised on the legacy she is building.

Realities of mentoring senior executives

CEOs often have mixed feelings about mentoring other executives. Though they may want to address critical talent gaps by hand-holding, coaching and mentoring, CEOs are often reluctant to become mentors themselves. Instead, a majority of CEOs prefer an intervening mode to mentorship by letting someone else build the relationship.

“Not being able to mentor individuals is a reflection of one's acceptance of current and future corporate performance levels,” explains Palaniappan, the retired promoter of a family-owned textile mill. “In my opinion impatience and lack of personal attention are the primary reasons CEOs stay away from mentoring,” he commented.

The reluctance to mentor senior executives is sometimes a reflection of their own upbringing, life events and career progression. For instance, executives who have had a poor mentor-protégé relationship earlier in their careers consider formal mentoring programmes ineffective and believe in natural relationships that yield father-son or similar protégé-mentor relationships. On the other hand, those who have had a positive mentor-protégé experience in their younger days, institute a formal mentoring process in their organisation.

“I have had one or two good mentors and several bad mentors in my long career. Looking back, this could be one reason why I never got to genuinely mentor my executives. Perhaps, it's one of my own disappointments, not developing enough talent across the company,” says Palaniappan emotionally, recalling his long career at the helm.

Most companies do have a process to manage senior executives' career progression. But that does not seem to suffice where creating strong talent at the next level is concerned. When assessing talent gaps, for instance, how much thought is given to issues such as one's ability to generate the next layer of talent, the future significance of the talent gap, situations that best fit current resources, and lost market opportunities? From the outside, it might seem that we do pay attention to all these attributes. But can you point to the report, benchmark or the process? It may be time for readers to ask these questions as a team.

Companies that practice a mentor-protégé relationship manage business-performance issues better and integrate corporate value progressively to meet longer term growth.

“Apart from time commitment and business discipline, inadequate exposure to mentoring senior executives is a common reason for CEOs' wishy-washy efforts,” Mrs Sengupta observes.

Rather than seeing employees as assets to grow and develop, some senior executives see these resources as raw material to consume, re-cycle or dispose. Similarly, they routinely ignore hierarchical clues, failing to view the symptoms beyond their silo of influence.

To make talent grow in today's environment, an exploitative outlook will not work. Instead, CEOs must mentor constantly, develop a strong sense of community, and provide real value to each other.

Inactions are actions

CEOs are aware of the influence their position commands and the positive impact they could have on others. In running a company there is an obligation to employees' growth, responsibility for simulating individual talent and an ultimate commitment to creating shareholder value.

Winning companies understand this opportunity well. Such organisations operate, not in a vacuum, as more habitual companies do, but initiate a mentor-protégé relationship with a spirit to preserve high levels of social value progress. What's frequently lost is our conviction in, acceptance of, and commitment to active and effective mentor management.

In the next part, the author will address three strategies adopted by companies to increase talent capabilities and reduce turnover.

(The writer is Managing Director, The Business Labs Inc.)