Russell Reynolds Associates, a global leadership advisory and executive search firm, today released its Succeeding at CEO Succession in India paper, where it took the opportunity to speak with chairmen and other leaders who have successfully led several CEO successions to understand insights and frameworks to navigate successful CEO successions.
The research suggests that Indian companies are more relaxed compared to their global counterparts on succession planning, and family-owned businesses in particular present a unique challenge. As Indian companies continue to be impacted by the pandemic, key managerial and board seats are left vacant due to the untimely demise or indisposition of employees. This has led to an urgent need to focus on institutionalization of succession plans to ensure business continuity.
“Efficient and smooth CEO and leadership succession is the key to sustained corporate success. Practitioners realize that this is not an event but an ongoing process and a mindset. Our focus was on understanding what we could learn from the successful practitioners to ensure good intent gets translated into action in the broader Indian corporate world,” said Sanjay Kapoor, a Core Member of the firm’s Energy & Natural Resources Practice and Board and CEO Advisory Sector in India.
All these conversations were distilled and compiled into a paper, which highlights some significant lessons on the trends, challenges and practices of succession planning in India. The learnings, translated into the Ten Commandments of CEO succession, are:
Start early – The process of planning should begin as soon as a new leader takes over. This is the time when the person is feeling most secure. Having just taken over a new responsibility, they are idealistic about identifying and grooming successors.
Role of the chairperson – The boardroom needs the right constitution and culture so that the succession conversation is not an elephant in the room and there can be a candid debate on the topic. The primary responsibility for fostering such a culture rests with the chairperson of the board.
Role of the NRC – NRCs must be staffed with the right members in order to bring deep-rooted knowledge of human capital so that the focus on the succession agenda is automatic and well managed.
Seek help when needed – Use of consultants brings objectivity to the process of succession planning in terms of assessing internal candidates or selecting and comparing them with external ones, in addition to providing exposure to current thinking on topics such as diversity and inclusion and sustainable leadership.
Internal versus external – Companies that lead in their industry have well-managed businesses and are also focused on internal succession. For those looking to shake up their business, bringing in external talent is the preferred option.
Testing successors – Create organization structures that provide the opportunity to test potential leaders with P&L responsibility.
Play the field – Continuous engagement with senior leaders of your key competitors can be a booster shot for succession planning.
Role models – Internal role models serve a great purpose. Employees see the success story, remain motivated and mobile, and aspire to take on leadership roles.
Make it a non-event – Strong succession practices make the actual succession a “non-event”. The ability to manage “continuity with change” makes for a robust, competitive organization.
Successor identified. What next – CEO induction is only one part of the whole process. One also needs to create a complete framework in which the CEO can operate and succeed, which includes governance, empowerment, etc.
Pankaj Arora, a Core Member of Russell Reynolds Associates’ Consumer and CEO & Board Services Practices, shared, “The pandemic has laid to rest the debate and discussions around the ‘why’ of succession planning, and hence our paper focuses on the ‘how’ of succession planning based on wisdom gathered from leading practitioners, perspectives of governance stakeholders and lessons from our own work with boards around succession. We hope this helps progressive boards embark upon and move forward on their succession journeys.”
The detailed paper is available here – Succeeding at CEO Succession in India
About Russell Reynolds Associates
Russell Reynolds Associates is a global leadership advisory and search firm. Our 470+ consultants in 46 offices work with public, private and nonprofit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today’s challenges and anticipate the digital, economic and political trends that are reshaping the global business environment. From helping boards with their structure, culture and effectiveness to identifying, assessing and defining the best leadership for organizations, our teams bring their decades of expertise to help clients address their most complex leadership issues. We exist to improve the way the world is led. www.russellreynolds.com.