Hay Group has partnered Fortune magazine for the World's Most Admired Companies study since 1997. Adopting a similar peer-ranking methodology here, Fortune India published its first India's Most Admired Companies study. Among nine criteria that Hay Group asked executives, directors and analysts to rank companies on (in their industry) was leadership.
For the purpose of the study, leadership was defined thus: ‘The extent to which the top management plays a formative role in effectively and consistently charting a strategic direction for the company.'
Gaurav Lahiri, Managing Director, Hay Group India, points out that a comparison of companies in different industries by criterion might not give an apples-to-apples comparison. That said, the top five by criterion score published here are from a shortlist of 425 companies, across 15 sectors. From 291 companies, 507 executives with a minimum of 12 years of work experience participated. Of these, 11 per cent were CEOs, MDs or Chairpersons, and another 25 per cent Vice-Presidents and above.
The risk associated with such industry research being led by corporate brand perception rather than reality on ground, is negated because of respondent profile, explains Lahiri.
“They have a better understanding of what companies in their industry are doing. So there is a granular understanding of multiple aspects of the business. The study is driven by the fundamentals of the organisation as opposed to the general perception,” he says.
The claim is that in the World's Most Admired Companies list, which follows the same methodology, the ratings correlate with stock performance.
He adds, “By and large, the companies doing well in the survey have outperformed their peers. In bad times, they have been much more resilient than those rated lower. In good times, they have done better.”
The New Manager caught up with Lahiri for a commentary on what could have impacted some of the ratings, and hence rankings. (Below):