Manpower Planning: Compulsion or Safety Net

Manpower Planning: Compulsion or Safety Net

Introduction

On October 24 2006, the core team of ICICI a week before its joint Managing Director Lalita Gupte retired, was reshuffled. Chanda Kochhar, deputy Managing Director who led the bank's retail business was given Gupte's portfolio of international banking; V. Vaidyanathan, a senior General Manager who had built ICICI's retail business alongside Kochhar, was elevated to the level of Executive Director.

At ICICI Prudential, the bank's life insurance joint venture Bhargava Dasgupta was made Exective director so that Shikha Sharma, Senior General Manager if and when required can take a position in the parent company. The giant universal bank's Managing director and CEO, K.V. Kamath, is pushing 58, and has just two years to go before his retirement. It can't be ruled out, he seems to have made it clear whom he considers as potential candidates for the bank's top job.

When Coca Colas CEO Roberto C. Gozueta suddenly died of treatable lung cancer in 1997 there was a great deal of shock and sadness at Coca Cola. But the company other than loss of Roberto was not disrupted as within his tenure Roberto had already selected and groomed a replacement M. Douglas Ivester, the process had started way back in 1983. L&T despite of increasing the retirement age of its directors to 67 is facing a leadership crunch, as most of its directors such as J.P.Nayak, K.Venkatramanan, and Y.M. Deosthalee are 63,61 and 60 respectively and with no clear successors available they will have to rely on outsiders or have to extend the retirement age or call retired top notch's to run the company.

CEOs come and go but organizations cannot be allowed to die an untimely death just because the directors were not able to find a right replacement for the company. "Organizational survival and growth are the most important responsibilities of top management of all organizations. These responsibilities can best be fulfilled by planning a management succession plan to ensure the availability of the right people to provide for continued vitality and strength." (Dr. P.N. Singh).

Age and death are no longer the key reasons for a vacancy at the top position, with the rapid industrialization, more lucrative options and profits increasing to unthinkable heights, corporate governance is gaining further grounds the stakeholders like institutional investors are becoming more demanding regarding the companies leadership and overall performance leading to the shrinkage of a CEOs tenure from 9.5 years to 7.6 years, and two out of every five new CEOs