What is the ultimate act, and proof, of leadership? When the CEO or Chairman brings his (or her) organisation to a point where it no longer misses him. Weak and visionless leaders have no trouble doing this, but when the helmsman is powerful, respected, and an organisation builder, doing so becomes extremely difficult, if not impossible. That, then, is the sort of challenge some of India's best-known corporate leaders face. People like K.V. Kamath, Deepak Parekh, and Ratan Tata are men who've transformed their corporations; what they have today in terms of businesses is very different from what they inherited years ago. As these men, and other corporate leaders like them, approach an age where they need to pass on the baton to the next generation, they are confronted with issues more complex than what their own predecessors had to face while making a similar decision.

The reasons are not hard to seek. The business environment in which the new generation of leaders must operate is very different from the one that has existed so far. To put it simply, globalisation is the new corporate mantra, and the new leaders must suddenly figure out how to manage organisations that span different countries, cultures, and regulatory frameworks. Not an easy job. So, what sort of leadership qualities or characteristics should the GenNext leaders have? Three or four broad characteristics: One, performance-orientation. The successor must have a consistent track record of delivering on his goals and targets. Two, learnability. The CEO of tomorrow must be able to learn and acquire new skills on the fly, since there may not be a second chance in the new business environment. Three, global-mindedness. While the CEO of India's new MNCs may be based in India, he will, for all effective purposes, need to think and act like a global citizen.

Suprisingly, or perhaps not, these characteristics aren't very different from what has always been required of leaders, except for the fourth one: team builder. More than ever, the new CEO will need to build leaders across organisational levels. As corporations become larger, and more diverse and complex, it will not be possible for one man to spot all the opportunities or make all the decisions. In the nano-second 21st century, decisions will need to be made locally and minute-by-minute. Creating this tier-two leadership, then, will be the biggest challenge for the GenNext leader, since traditionally companies haven't focussed on developing empowered middle-level managers. Therefore, the CEO aspirant of today must be a person who can build competent and energetic teams around himself. It is this last act that will determine his legacy within the corporation.

Dearer Oil Riddle

Finance minister P. Chidambaram's recent lament at the World Economic forum (WEF) that the prevailing high oil price has shaved off the country's economic growth (GDP) by as much as 1 per cent is understandable. Since we import nearly 70 per cent of our needs, there is evidently transfer of income to not only oil producing countries but also traders who fuel speculation. Agreed, speculation definitely needs to be curbed, although it is intrinsic to market play. That said, a good part of this problem of a higher oil bill has been created by the very class of people Chidambaram belongs to-politicians. Here's why.

While increased economic activity has spurred global prices, the lack of efficiency in oil use has blunted growth. The latter is entirely due to the price controls set out by the government as a measure of populism on mass consumption petroleum products-petrol, diesel, kerosene and LPG-that accounts for as much as 60 per cent of total oil consumption by the country.

With price controls insulating retail prices from market signals, growth in consumption remains unfettered. Not surprisingly, we consume two-and-a-half times as much oil per unit of GDP as developed countries. Interestingly, while the country is recording over 25 per cent growth in motor vehicle population, the growth in diesel, which accounts for around 30 per cent of oil consumed in the country, still remains in single digits. In fact, last fiscal, growth in diesel demand was a minuscule 1.6 per cent, while growth during April-October period this year is at an 'improved' 6.3 per cent. Clearly, this points to a lack of data integrity in the government machinery to assess growth in demand. Importantly, this also points to loss of precious revenue to the exchequer-currently, a quarter of the government's revenues is from the oil sector.

While demand side measures require to be implemented at a political as well as administrative level, fact remains that the best way to insulate the economy from oil shocks is to find oil in the country itself. Recent oil finds by Cairn Energy have boosted the oil prospectivity in the country-especially since they found oil in a block abandoned by oil major Shell. However, the government needs to monetise this momentum. The objective is a simple one-government's rent from oil leases should be in line with the risk of finding oil. Evidently, blaming global prices is akin to blaming the weather!

India Everywhere, But...

India Economic Summit: Flavour of the season

One of the reasons why Chinese president Hu Jintao visited India recently, the media was told, was all the press the country has been getting over the recent past. Hu wanted to see for himself what the fuzz was all about. Earlier, the Boston Consulting Group held its first partner meeting outside of the US in Delhi also for the same reason. And Hu's visit was followed by the three-day India Economic Summit, which brought together more than 600 business, political and civil society leaders. At the World Economic Forum in Davos early this year, India began with an "India Everywhere" theme and as we near the end of the year, there's no sign that global investors are beginning to tire of the country.

Just look at both the foreign institutional and direct investment numbers. Commerce minister Kamal Nath is talking of $12 billion (Rs 54,000 crore) in foreign direct investment in 2006-07, compared to $7.7 billion (Rs 35,420 crore) the previous year. The stock markets continue to be buoyant thanks to foreign investors. According to the Reserve Bank of India, October witnessed the highest FII inflows so far this fiscal at $1.55 billion (Rs 6,975 crore). In the second quarter, the net FII investment was $2.7 billion (Rs 12,150 crore). By now, we know all the reasons why India excites foreign investors: A growing domestic market, where the consumers, apparently, are in need of everything-from cars to houses to footwear to mobile phones. Also, a lot of FDI is coming in for outsourced manufacturing. Capital goods, automobiles and auto components, and electronic and electrical hardware are all industries where this is evident.

There's a simple problem with such hype, though: Delivery. Investors are putting money on the table because they expect corporate earnings to continue soaring. The ones setting up factories are doing so because they expect India's competitive advantage in terms of labour to hold up for at least the next decade or so. Worryingly enough, the country doesn't seem to be doing enough about solving some fundamental problems. The infrastructure story is moving along-if not stuck altogether-at a vastly slower pace than what industry needs; human development continues to be hobbled by inadequate resources and poor delivery systems. As a result, labour costs are already rising. How long before all these problems pull the curtain down on the India story? Maybe not the next year or even the one after that. But if things don't improve fast enough, the inevitable may not take long to happen.