Successions, values and loyalties

“Pursue studies as if your whole life is ahead of you, but perform your duties as if you are going to die tomorrow,” goes an old Sanskrit saying. Kanika Datta’s reference to Jack Welch’s thoughts about succession long before his retirement in 2000 in her column in this paper (March 5, 2020) indicates the priority he accorded this task among his responsibilities as a chief executive.  He stated in a 1991 address that from then on, his major concern was choosing his successor.  He was, of course, not alone to display this trait.

Mahinda Silva of what was then the Ceylon Civil Service, served Sirimavo Bandaranaike, Sri Lanka’s and the world’s first woman prime minister, as permanent secretary of land and agriculture from 1970 to 1977. He framed the estates nationalisation and land redistribution policy that became the hallmark of the Bandaranaike government. The prime minister considered him an irreplaceable asset and wondered what she would do without him.  “Not to worry Madam, I shall have at least eight younger officers who can carry on just as well after me,” he assured her.  Official Colombo knew about Silva’s Goliyas (Sinhala for acolytes).  Mr Silva retired prematurely in 1977 as he rightly feared that he would never get along with J R Jayewardene who won the election that year.  True to his word, six of the subsequent permanent secretaries in that powerful ministry were Silva understudies.

Most organisations have identified career development paths for their star performers.  Even if there are no clearly designated successors or succession processes, a tacit understanding prevails within the organisation and its immediate environment about the likely schedule of handing of the baton and its possible receivers.  Some also resort to search processes (not all of which are entirely transparent).  These act as shock absorbers for the system and ensure the least disruption following the change of guard. As Ms Datta observed, even though Welch did not name his successor, James McNerney, Robert Nardelli, and Jeffrey Immelt were widely known to be among the very short list of people who would helm GE after him.

But not all entities and their chiefs follow such practices. Ravi J Matthai, the first full-time director of Indian Institute of Management, Ahmedabad (IIMA), announced at a faculty meeting in April 1972 that he would step down as soon as a new incumbent was chosen.  He was then in position for less than seven years and by common consent, fully in command of an institution that was gaining in reputation and prestige.  He was just 45; the question of who after Matthai would have been laughed out of any court then.  The stunned silence in the meeting was broken when Dwijendra Tripathi, the business historian, said he felt betrayed, an indication of his bewilderment, shared by almost the entire faculty. Matthai made two provisos: He would stay on at IIMA (rather than use the position as a stepping stone for something else) and play no role in the choice of the successor.  He scrupulously adhered to them both.

The succession is a foregone conclusion in most family-owned entities, corporate or otherwise, and not just in India.  The mantle descends on a designated close kin, most often the progeny of the current occupant of the position.  Most dynastic successions have not led to beneficial outcomes either for the organisation or individuals concerned, warping businesses, professions — and politics.  This writer termed it the Dhritarashtra complex, after the Kaurava patriarch whose obsessive love of sons led to the Mahabharata war (Business Standard, October 14, 2012).

Not all successions, however well planned and in advance they may be, work out in reality.  Power struggles within dynasties ensure tumult for the designated heir, as is happening presently in the House of Saud, or in the two Yadav clans of Uttar Pradesh and Bihar.  Verghese Kurien, the Business Standard, October 26, 2016).

On the other hand, as Shyamal Majumdar shows, Welch was greatly concerned about the “four Es (Energy, Energise, Edge, Execution) and one P (Passion) principle of hiring” (Business Standard, March 6, 2020) which formed the core of the organisational culture he espoused in GE and not the disruption that he practised after reaching the top.  Mr Silva emphasised the professional independence and not sycophancy as the motive force of the bureaucracy. Matthai ensured that faculty autonomy and commitment to the institution became the core of the IIMA culture.  These instances of adherence to values and shared culture, and not personal loyalties, led to the successful transition of their respective organisations.  Although drawn from a microcosm of institutions, this is a valuable lesson for societies in times of turbulence.

The writer taught at Indian Institute of Management, Ahmedabad and is a management consultant

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel