Family-owned businesses form a major chunk of the business landscape. It is in this context that the issue of succession planning assumes significance. It is incumbent on the existing CEO to not only identify and groom a successor, but also to ensure that a smooth transition mechanism is in place. The corporate world is full of instances wherein business majors have made headlines on account of the issue of succession.
The issue of successionits planning, timing and executionis as ancient as history itself. The crux of the great Indian epics, the Ramayana and the Mahabharatha, lies in the issue of succession. Shah Jahan, the creator of Taj Mahal, one of the world's wonders, met a gory end only because he chose one scion over another to succeed him. History is replete with such examples. Apart from dynasties, succession has been a vexatious issue even for religious institutions and f.
Various issues, which include key organizational as well as interpersonal human issues, are involved in the transition process of a CEO succession. A good CEO can be differentiated from a successful one based on the succession philosophy adopted. A good CEO will be acknowledged for the organic growth of the organization during his tenure, whereas a successful CEO is the one who is remembered by future generations too for laying the foundation plans for a successor to carry on the legacy of the organization.
In today's highly competitive global environment, a globally experienced top-management team can make a big difference to the organization's future. A recent survey by Korn Ferry, a search consultancy, found that only 33% of boards had a management succession committee in 1981, but by 2003, this figure reached 73%. Global organizational success will depend on the organization's ability to build a corporate global mindset. A CEO needs to imbibe global leadership succession planning into the organization. |
