In the post dated 7th April, a view was expressed that much ado is being made in finding a successor to Ratan Tata. Similar sentiments find a place in the Financial Express today (18th April). The article is reproduced here:
"At the outset let me announce my deep respect and professional regard for the four industry veterans—Ratan Tata, NR Narayana Murthy, AM Naik and YC Deveshwar—whose impending superannuation is creating much media noise of late. I have interviewed/met three of the four in the past, and have found them worthy of every bit of praise they’re generally heaped with—visionary leaders, business colossuses and all that.
Infosys’s Murthy has stridden the Indian IT industry like a tall statesman for close to three decades now, the time he saw his $250 fledgling morph into a $5.7 billion raptor. In the last 20 years he has been at the helm, Ratan Tata has transformed the $2 billion Tata Group into a $67 billion Indian multinational, with its corporate flag flying high in industries and geographies hitherto considered to be the sole domain of developed market transnationals. L&T’s AM Naik has led the $10 billion software-to-rigs behemoth from the front since 1999, and led it to victory in many a bruising battle. ITC’s YC Deveshwar took the reins of the firm at a far from favourable time—recollect the 1995-96 messy shareholders’ fight and ignominious departure of the then chairman KL Chugh—and turned the cigarette major into one of the country’s biggest, and most respected consumer goods & hospitality companies.
But, of late, word coming out from these hallowed organisations on how they view the current succession plans, and more importantly the current incumbent, should be cause for some concern for the yet to be identified/named new chiefs. “Our committee has come to the conclusion that we cannot find a replacement for Mr Tata!” And that the committee may have to “rearrange the model,” to make it easier for the new chief to manage the hydra-headed group. This from a senior group manager and a member of the five-member search panel mandated to find a successor to Ratan Tata. Dispensing the operating companies-specific part of the Tata chief’s job with that of being the principal shareholder (as chairman of holding firm, Tata Sons) is desirable and so is the search panel’s reported bias for young Tata-ites to be inducted in the Tata Sons board, and reducing the retirement age on non-executive directors from 75 to 70. But what I find hard to understand is the need to publicly pronounce the incumbent as a kind of a “super-human”—“we cannot find a replacement for Mr Tata”—the only one who could manage “an extremely large, complex and diverse” group, though surely the group will have a new chief come December 2012, as Ratan Tata has made abundantly clear that he is not hanging on beyond that. After all, with every passing decade, businesses are only getting more complex, diverse and large and the one Ratan Tata is leaving is surely more of all these than the one he inherited from the legendary JRD Tata. In 1991, when he took over from JRD, no one gave him half a chance to bring order to a chaotic organisation with prima donnas galore, but all credit to Ratan Tata for showing such a stupendous success. Is the intent here then merely to pay obeisance to one of India’s finest business leaders or does it tantamount to pre-judging the new chief, whosoever she/he may be?
Move over to L&T, where Naik has announced virtually splitting the company into nine entities, each with its own CEO, in an attempt to simplify management of the conglomerate. There has been persistent, though unverified talk of splitting the group-wide chairman & MD’s post, wherein Naik continues as chairman well beyond his September 2012 superannuation. Something similar is under way at ITC, where the incumbent chief Deveshwar is reportedly angling for an extension beyond April 2012, to see through the group’s initiatives in food and personal care. Although Infosys’s Murthy has long given up executive positions, and is slated to relinquish the non-executive chairman’s chair later this year, he will continue as chairman Emeritus even as a new non-executive chairman and CEO takes guard this August.
At the risk of being accused of being uncharitable to undoubtedly the finest business leaders that India has seen after liberalisation, is there a tendency here to hang on and/or create an aura of indispensability? The affliction of perennially being there in some role or another that characterises Indian politicians—when was the last time you heard a politician fade away voluntarily?—seems to have bitten businessmen too.
True, people like Naik or Deveshwar are super-achievers, and sometimes the organisation may need to turn back to them for advice and leadership even after the normal retirement age or the first innings—much like the case with Apple’s Steve Jobs or Coke’s Neville Isdell who came back from wilderness and retirement to lead their troubled companies back to glory.
But to have them back was the choice the new management and shareholders took, after much bungling by the new leadership. And Jobs’s and Isdell’s stature has only grown by quitting first, only to be back because the company needed them desperately. And coming back is not always the trend. Jack Welch, the most successful business executive in American history, retired at 65 years, after seeing GE’s market cap go up from $14 billion to over $410 billion in 2001, which has since tumbled to around $212 billion, without anyone even suggesting putting a call to Welch!"
shailesh.dobhal@expressindia.com
"At the outset let me announce my deep respect and professional regard for the four industry veterans—Ratan Tata, NR Narayana Murthy, AM Naik and YC Deveshwar—whose impending superannuation is creating much media noise of late. I have interviewed/met three of the four in the past, and have found them worthy of every bit of praise they’re generally heaped with—visionary leaders, business colossuses and all that.
Infosys’s Murthy has stridden the Indian IT industry like a tall statesman for close to three decades now, the time he saw his $250 fledgling morph into a $5.7 billion raptor. In the last 20 years he has been at the helm, Ratan Tata has transformed the $2 billion Tata Group into a $67 billion Indian multinational, with its corporate flag flying high in industries and geographies hitherto considered to be the sole domain of developed market transnationals. L&T’s AM Naik has led the $10 billion software-to-rigs behemoth from the front since 1999, and led it to victory in many a bruising battle. ITC’s YC Deveshwar took the reins of the firm at a far from favourable time—recollect the 1995-96 messy shareholders’ fight and ignominious departure of the then chairman KL Chugh—and turned the cigarette major into one of the country’s biggest, and most respected consumer goods & hospitality companies.
But, of late, word coming out from these hallowed organisations on how they view the current succession plans, and more importantly the current incumbent, should be cause for some concern for the yet to be identified/named new chiefs. “Our committee has come to the conclusion that we cannot find a replacement for Mr Tata!” And that the committee may have to “rearrange the model,” to make it easier for the new chief to manage the hydra-headed group. This from a senior group manager and a member of the five-member search panel mandated to find a successor to Ratan Tata. Dispensing the operating companies-specific part of the Tata chief’s job with that of being the principal shareholder (as chairman of holding firm, Tata Sons) is desirable and so is the search panel’s reported bias for young Tata-ites to be inducted in the Tata Sons board, and reducing the retirement age on non-executive directors from 75 to 70. But what I find hard to understand is the need to publicly pronounce the incumbent as a kind of a “super-human”—“we cannot find a replacement for Mr Tata”—the only one who could manage “an extremely large, complex and diverse” group, though surely the group will have a new chief come December 2012, as Ratan Tata has made abundantly clear that he is not hanging on beyond that. After all, with every passing decade, businesses are only getting more complex, diverse and large and the one Ratan Tata is leaving is surely more of all these than the one he inherited from the legendary JRD Tata. In 1991, when he took over from JRD, no one gave him half a chance to bring order to a chaotic organisation with prima donnas galore, but all credit to Ratan Tata for showing such a stupendous success. Is the intent here then merely to pay obeisance to one of India’s finest business leaders or does it tantamount to pre-judging the new chief, whosoever she/he may be?
Move over to L&T, where Naik has announced virtually splitting the company into nine entities, each with its own CEO, in an attempt to simplify management of the conglomerate. There has been persistent, though unverified talk of splitting the group-wide chairman & MD’s post, wherein Naik continues as chairman well beyond his September 2012 superannuation. Something similar is under way at ITC, where the incumbent chief Deveshwar is reportedly angling for an extension beyond April 2012, to see through the group’s initiatives in food and personal care. Although Infosys’s Murthy has long given up executive positions, and is slated to relinquish the non-executive chairman’s chair later this year, he will continue as chairman Emeritus even as a new non-executive chairman and CEO takes guard this August.
At the risk of being accused of being uncharitable to undoubtedly the finest business leaders that India has seen after liberalisation, is there a tendency here to hang on and/or create an aura of indispensability? The affliction of perennially being there in some role or another that characterises Indian politicians—when was the last time you heard a politician fade away voluntarily?—seems to have bitten businessmen too.
True, people like Naik or Deveshwar are super-achievers, and sometimes the organisation may need to turn back to them for advice and leadership even after the normal retirement age or the first innings—much like the case with Apple’s Steve Jobs or Coke’s Neville Isdell who came back from wilderness and retirement to lead their troubled companies back to glory.
But to have them back was the choice the new management and shareholders took, after much bungling by the new leadership. And Jobs’s and Isdell’s stature has only grown by quitting first, only to be back because the company needed them desperately. And coming back is not always the trend. Jack Welch, the most successful business executive in American history, retired at 65 years, after seeing GE’s market cap go up from $14 billion to over $410 billion in 2001, which has since tumbled to around $212 billion, without anyone even suggesting putting a call to Welch!"
shailesh.dobhal@expressindia.com
No comments:
Post a Comment