Anand Mahindra to step down
Making a Succession Plan Work in Organizations
News that Anand Mahindra will give up his executive role at Mahindra & Mahindra from April 2020, has surprised many in the corporate circles. Managing Director Pawan Goenka will take over, as part of a succession plan at the auto and tractor maker. What is interesting is that we are increasingly seeing elders in many family businesses are giving up control, but mostly to their own family members. One of the few exceptions is what Anand Mahindra has done.
Take many Indian business families and the baton of succession is handed down to the next generation just like Monarchy. So, Rahul Bajaj makes way for Rajeev Bajaj and then complains that there is no democracy in our country. Tata’s too followed the same path but that ended when Ratan Tata made way for Cyrus Mistry, but the boardroom battle saw Natarajan Chandrasekharan occupy the corner room at Bombay House. The Ambanis, too followed suit, but one brother went up like a rocket, while the other crashed without any chance of a bailout.
Just like politicians, Businessmen and women are reluctant to retire and let others take charge. Professional conglomerates like L & T had created a smooth succession plan, where the old guard, identified their successors, groomed them and then made way.
The problem is more acute when a senior level executive decides to quit, leaving a sudden vacuum in the organization. We saw that Binny Bansal stepped down from Flipkart and Vinod Dasari quit as Managing Director of Ashok Leyland.
Kavil Ramachandran, professor and executive director of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business, the Mahindra and Mahindra group has been known to do such leadership grooming for many years,” said.
According to Anand Mahindra, the selection process took into account both internal and external candidates, Anand Mahindra said in a message. Human Resources consultants say choosing someone sends a strong message to the organization that talent is recognized and given the right responsibility.
But how many organizations in the country are ready to ensure a succession plan. Succession planning is a strategy for identifying and developing future leaders of a business. It is also extremely useful in a critical situation where a leader leaves without a successor. Many sudden exits leave gaping holes, filling of which is a long, arduous process with a steep learning curve.
Go Air saw two quick top level exits, while Chanda Kochhar had to leave ICICI under a cloud with six months before her term was to end.
According to industry veterans, companies today focus on building a healthy pipeline for business, but neglect building their organizational asset – the People.
Organizations which groom their next in line are better equipped to survive and prosper in difficult business conditions. Anand Mahindra has set that trend – will others follow?
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