With so many changes in the business environment due to the pandemic, the organisations that managed to stay afloat and even thrive have done so basis the capability of their management. After all, it does require enormous management capability to be able to steer the business through uncertainty and handle the challenges that come with business priorities that keep changing every day.
Clearly, the pandemic made the maximum impact on management capabilities, and KPMG’s Management Capability Development Index India (MCDI) reports are used to measure and evaluate management capability across industries and sectors every year.
In this year’s survey, the maximum participants were from the manufacturing sector (21 per ent), followed by professional services (15 per cent), then IT (14 per cent), education (14 per cent), financial services (10 per cent) and finally, healthcare (2 per cent).
Given the challenges that organisations have had to face, due the pandemic-imposed restrictions and changes, the managerial capabilities that have really stood out recently are resilience, the urge to innovate, the passion to outperform, and also the ability to leverage digital technology to ensure efficiency in terms of operations and cost optimisation.
Building the right management capabilities can go a long way in ensure sustainable business performance.
As per the Management Capability Development Index India 2022, the following are few dimensions that participants of the survey rated their organisations’ management (and their capabilities) on:
Visionary leadership: This critical dimension received a moderate overall MCDI rating of 73.3.
Organisations with revenue between Rs 30 to 60 crore rated their managements higher in terms of this dimension (3.93), than their counterparts from companies with revenue between Rs 120 to 300 crore, who scored their managements lowest (3.06).
Performance leadership: In terms of performance leadership, the overall MCDI score was 74.4. Here, organisations with headcount between 101 to 200 rated their management highest, while those with headcount between 1 to 5 rated them lowest.
People leadership & self-development: Overall MCDI score for this dimension was 73.2. Participants from organisations with revenue between 30 to 60 crore rated their management highest (3.95), while those from organisations with revenue between Rs 120 to 300 crore rated the lowest (3.36). It appears that participants from IT and mining sectors are most confident of their management’s ability in this area, while participants from healthcare are least confident.
Financial leadership: Without good financial leadership, it becomes difficult for organisations to make important and timely business decisions and shape business goals. In this dimension, participants from organisations with revenue between Rs 60 to 120 crore rated their management highest (4.18), while the management of organisations with a revenue of 1-6 crore received the lowest rating (2.91). Organisations with workforce strength of 101-200 rated their management highest (4.45), while those with headcount between 1 and 5 rated them the lowest (2.4).
Organisational capability: Organisations gain competitive advantage because of the organisational capability of their management. The overall MCDI score for this dimension was a moderate 71.5
Companies with 101 -200 employees rated their management highest in terms of organisational capability, while those with 1 to 5 employees rated their management lowest.
The general opinion of participants was that not many organisations are as strongly committed to continuous learning at the individual or organisational level.
As per the MCDI scores, organisational capability was above average in the mining sector and below average in the healthcare space.
Application of tech & knowledge: Overall, the MCDI score was higher for this dimension this year, than in previous surveys, thanks to the pandemic accelerating digitisation.
Application of technology and knowledge ensures better interactive experience for employees. Participants from organisations with headcount between 101 to 200 rated their organisations highest in this area, while smaller organisations with one to five employees scored the lowest.
While most participants feel that their organsiations do understand the importance of applying tech knowledge, organisations still have a long way to go when it comes to effective application of knowledge and information management systems.
External relations: This ensures better fit of organisations with the market via beter products and understanding of customer needs. The overall MCDI score was high for this dimension (75.3) as participants believe their organisation’s capability to establish and build external relationships has gone up.
Organisations with 21 to 50 participants rate their management highest in this area, while those with 6 to 20 employees are rated lowest.
Integrity and corporate governance: It would be impossible for organsiations to nurture an environment of positivity and put in place effective internal control without focus on this dimension. The overall MCDI score for this dimension was 80.4, which is much higher than all other dimensions.
Participants from the utilities and professional services space are most confident that their organisations practise honesty, integrity and ethical behaviour, which are essential for sustained success. Participants from the IT space were least confident of their organisations in this dimension.