India Inc has been sitting on a ticking time-bomb. Senior management is wax eloquent about the importance of succession planning at the organisation. Detailed plans of action are shared at the board level and also with the human resource team. But when the CEO actually quits? It is suddenly a scramble.
HR firms have stressed enough on the importance of succession planning within organisations. This not only includes identifying the top talent within the company but also helping the company begin the training the next level of leaders from an early stage onwards. This would help groom talent for the required leadership role in the future.
One could not imagine an ICICI Bank without Chanda Kochhar, Axis Bank without a Shikha Sharma or even Yes Bank without Rana Kapoor as its CEO. But all three have undergone a management change (Yes Bank’s new CEO Ravneet Gill will take over on March 1), in a process that involved both internal and external experts to finalise the names.
Several traditional firms in sectors like manufacturing and information technology have been driven by one personality, who has led the firm for a long duration. Getting a successor in such cases for instance when N R Narayana Murthy or A M Naik retired were events that were closely watched by the market.
The basic concept of succession planning entails that for every leadership role, there should be three people identified as successors. Only then can a replacement be found on time. This will involve not just advanced planning, but also a detailed screening of the eligible candidates so that even if one of them would be asked to take over from the next day, they are ready.
Whenever a new person joins an organisation, the hiring firm’s first advice is to identify if he/she is eligible for any future leadership posts that open up. Only when talent is nurtured from day one of joining will a company be able to build up a strong pipeline of next-generation leaders.
The ideas and detailed frameworks are already in place. What companies need to do is to simply execute the plan and keep names ready at all times. Because when crisis hits, they may no longer have the luxury to begin the process from scratch.