Indian enterprises are feeling more confident about their management competence as they recover from the Covid-19 crisis, a study by the All India Management Association (AIMA) and KPMG, released on Tuesday, has found.
The ‘AIMA Management Capability Development Index 2022’ produced a higher overall score compared to the previous edition of the study in 2018. “This year’s overall Management Capability Development Index (MCDI) score stands at 74.5 compared to 71.6 in 2018,” the study noted. In the MCDI, India’s management leaders provide self-rating on multiple parameters related to management competence.
The 2022 MCDI also offers a view of the progress of India’s management capability over the past decade, as it is the sixth management capability survey since 2010.
“The self-rating by India’s management leaders has fluctuated since 2011, when the overall self-assessment score was the highest at 77.8. The lowest point for Indian management was 2014, when the MDCI score dipped to 70.7. It recovered in 2016 to 75.5, only to dive again in 2018 to 71.6. Now, the self-appraisal score of India Inc is 74.5. The scores are out of a maximum possible of 100 points,” the AIMA said.
The 2022 MDCI has accounted for gender-based variations in responses to questions on individual yardsticks of their organisation’s management capability. Women are more confident of capacity of their organisation than men. Women rated management capability of their enterprises higher than men on the majority of the 10 yardsticks, including vision and strategic leadership, performance leadership, financial leadership, external relationships, integrity and corporate governance, and innovation and adaptability. However, women score their organisations lower than men in areas such as people leadership, organisation, and application of technology and knowledge. Both genders agree in their rating on the criterion of focus on getting results.
Surprisingly, the study shows a lack of substantial score upgrades in the areas of application of technology and knowledge as well as innovation and adaptability. The score on application of technology and knowledge has gone up slightly, from 72.1 in 2018 to 74 now, despite the wave of digitalisation during the past couple of years. The score on innovation and adaptability has also improved a little—from 70.3 to 71.6. It indicates a significant bump in the level of thresholds in the areas of technology adoption and business creativity.
“The decadal trends of self-rating by Indian management show a strong bias towards ethics. Over the past five MCDI studies, India Inc has consistently given itself the highest scores on integrity and governance—in high 70s or low 80s,” the study noted. “This year, the score on integrity and governance has peaked at 80.4.”
Areas of biggest concern through the past decade have been the organisation capability and people practices, but there is a recovery on both counts this year. On organisation capability, since 2011’s peak score of 76.2, there have been dips, but now the score has recovered to 71.5. The people leadership score has also recovered this year to 73.2 after dips through the past decade.
According to AIMA president CK Ranganathan, the MCDI study provides important insights to Indian management leaders to bolster their organisations as they prepare for realigning their organisations in a changed world. “It takes immense management capability to navigate through uncertainty and ambiguity,” he said.
“Given unprecedented circumstances, it is even more pivotal to evaluate the management capability of leaders of India,” added Vishalli Dongrie, partner & head, People & Change Advisory, KPMG in India.
Among the organisations covered by the survey, the smallest ones (those employing 20 or fewer employees) showed the widest management capability gaps, whereas midsized companies (100-200 employees) expressed the highest confidence in their management capability.
The survey included a section on the management response to Covid-19. A key finding is that large organisations (more than 1,000 employees) reported seeing a higher positive impact of remote working on productivity, as opposed to small organisations (100 or fewer employees).