Career News 24/7: INSTANT MBA: High-Growth Companies Should Have Succession Plans Like Infosys'

Wednesday, December 14, 2011

INSTANT MBA: High-Growth Companies Should Have Succession Plans Like Infosys'

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Wednesday, December 14, 2011

Today's advice comes from former Infosys HR head Mohandas Pai's interview with The Week:

"Succession planning is extremely critical for all companies, especially high-growth companies. High growth creates multiple challenges as companies outgrow their leaders. The burnout, too, is very high. A leadership pipeline needs to be built and the board needs to take the responsibility for this."

That might mean picking out the most promising employees and grooming them for top posts. Leadership is at least partly learned, so eyeing top candidates and making sure they have what it takes to snag a spot in the C-suite help ensure a good fit. That belief helped Pai's former employer, Infosys, emerge as an IT giant. From 1993 to 2000, its sales and earnings grew by more than 70% each year (via Forbes).

Thinking critically about who might make the best future leaders within a business is important especially when the choice for a future successor seems obvious, he says. Overlooking top talent or going with an expected choice could rule out trailblazers.

And when hiring leaders comes down to politics — like in a family business, where all the emphasis is on promoting workers with the same last name — companies often suffer an entirely preventable blow, Pai says.

Successful organizations need a board that isn't afraid to go with a dark-horse candidate. Board members need to research candidates' backgrounds and keep up with workers' performance. If they do, they minimize the risk of choosing a sub-par CEO. Plus, board members bolster their accountability in the process, keeping them engaged with the company they oversee and fully invested in its progress.

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