Hay Group India Blog
Hay Group in partnership with Fortune India has announced the list for India’s Most Admired Companies across 15 industries in India. The list is based on the survey of executives, directors and analysts.
The prime sectors from which the companies were chosen were apparel, garment, textiles, auto components, banking & finance, cement, consumer durables, infra development, metals, mining, oil & gas, power, pharmaceutical, health care and telecom, amongst others.
Employers emphasizing on core business practices despite the ever changing trends in technology and economics have been able to retain the best talent over the years without fail. A 15- year review of Fortune Magazine’s World’s Most Admired Companies by the Hay group affirms the strategy and highlights the key practices that help an organization sustain success:
- Executing and enabling strategy
- Building structures and processes to sustain long-term performance
- Achieving success through people
- Placing a high value on leadership and talent
The review underscores that ‘achieving success through people’ boosts the revenue growth of an organization by 4.5 times, and reduces employee turnover by 54%. Apple, Google and Amazon.com have bagged the top three spots in Fortune’s World’s Most Admired Companies-2012, among all the global organizations; while Tata Steel and ONGC occupy the coveted top positions in India.
Hay Group has partnered Fortune magazine for the World’s Most Admired Companies study since 1997. Adopting a similar peer-ranking methodology here, Fortune Indiapublished 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.
There are many reasons that make a company successful and you can’t deny that there are equal number of reasons that make a company admirable. Judging the companies on myriad platforms, Fortune India in collaboration with global management consulting firm Hay Group has listed India’s 50 Most Admired Companies, for the first time, in its March issue.
The Tata Group dominates with three group companies featuring in the top ten list of India’s most reputed companies. Tata Steel has topped the list, becoming India’s most admired company. Tata Consultancy Services (TCS) has ranked top among companies in the IT, ITES, BPO industry and Tata Motors led in the automotive industry.
Corporates are rated on the parameters of consistency, quality, talent management, corporate governance, social responsibility and delivering value to investors. The cover story also includes the sectoral rankings, covering 15 key sectors.
Hindustan Unilever and Colgate Palmolive are placed at the second and the third place in the list followed by Cadbury India. No public sector undertaking features in the first top ten most admired companies. However, PSUs in the Oil and Gas sector like the ONGC, Bharat Petroleum Corporation and Indian Oil and Hindustan Petroleum are ranked 16th, 17th, 19th and 20th respectively in the list.
Gaurav Lahiri, Managing Director of Hay Group India, said: “Hay Group India is pleased to partner with FORTUNE India to roll out the inaugural edition of India’s Most Admired Companies. This initiative furthers the tremendous success of our collaboration with FORTUNE globally, on the World’s Most Admired Companies rankings. The India list will prove to be a conclusive guidebook to corporate India’s emerging and existing stars and demonstrates the most progressive and effective market players across industries, as measured by company’s peers within the industry.”
The companies were shortlisted from 15 industries on the basis of their size, contribution to national GDP, growth rate, maturity of industry, competition within the industry, the minimum number of players in the industry and their national presence.
For 15 years, we have conducted research to identify the factors that distinguish the World’s Most Admired Companies (WMAC). During that time, we’ve seen companies from GE to Amazon.com to Apple top the list of WMAC. So, what is it that makes these companies so successful?
Taking a look back at our research conducted during the past 15 years, we discovered that there are four consistent themes among the WMAC that enable them to financially outperform their peers, attract and retain top talent and successfully adapt to economic and global changes.
The four business practices that contribute to the WMAC success are:
- Executing and enabling strategy
- Aligning structures and processes to sustain long-term performance
- Achieving success through people
- Placing a high value on leadership and talent
But, the question remains: How do the WMAC incorporate these ‘best practices’ into their organization and more importantly, how can you do the same? How can you help enable greater success for your organization?
Implementing these four practices is critical to becoming a WMAC. Here’s what it takes:
1. Put strategies into practice. Clarity is crucial. WMAC ensure strategic objectives are clear at every level and align all business units around a common strategic vision. They also understand the importance of culture – embodied by attributes the organization wants to encourage, support and reward – and it’s alignment with the businesses intent and go to great lengths to make sure employees ‘fit’.
2. Align enduring structures and processes. WMAC engrain innovation into their companies, maintain an active focus on growth and manage people for the long-term. When a downturn or crisis strikes, these organizations rely on well grounded plans versus overt course changes to sustain performance and weather the storm.
3. Enable your people to succeed. WMAC recognize that their people are the key drivers of organizational success and therefore, they focus on creating the right conditions for their people to thrive. The WMAC recognize that in addition to providing training and development, you must also engage and enable your employees to produce results.
4. Invest in your leadership and talent. In order to get the right people to drive success, organizations must place a strong emphasis on attracting and developing talent and, investing in and designing reward programs that align with their strategic vision. WMAC promote a ‘total reward’ approach that makes best use of both tangible and intangible rewards.
While there may not be one specific algorithm that will contribute to success for all organizations, beginning to recognize and implement these core practices is the first step in the equation.
Are there other factors that you’ve experienced and would cite as critical to the foundation of organizational success?
To learn more about the WMAC and the secrets behind their success, visit our microsite at http://bitly.com/w3y1CP
