July 05, 2013

"Never promote an employee for performance; promote only if there is potential"

Lovely column by Devdutt Pattanaik in Economic Times with examples from Mythology - Ram and Bharat (humans) vs Vali and Sugriv (monkeys) vs Ravan and Kuber (Demons) - in answer to a question from CEO on succession planning. (Emphasis mine.)
A yajaman is proactive in decision-making and responsible for its consequences. Did your CMO do what he was told to do or was he taking independent decisions and responsibility? Did your CFO just do his job, but go out of his way to take decision and take responsibility, not just for success but also failure? Most critically, did you see any one of them groom people to take their respective job. If they don't help people grow, if they don't think beyond their domains, if they are unable to think future and take risks, they are probably not good to be leaders.

To be a yajaman, one has to take people along. Who amongst the two tries to take people along? This does not mean consensus all the time. Sometimes it requires force, a little pushing and pulling. Who can handle the consequence of losing the other? Who can find a replacement quickly enough? Who is capable of retaining the other?

You need to list all the things that you feel you did to be a good CEO and map if these qualities exist in some measure in either of the candidates. You need to check if either of them empathizes with the organization and understands the market and can handle change that even you cannot anticipate today. The CEO position cannot be a reward for a job well done. You never promote for performance; you always promote only if there is potential.

  Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private company transactions, valuations and financials in India. Click Here to learn about Venture Intelligence products that help entrepreneurs Reach Out to Investors, Research Competition, Learn from Experienced Entrepreneurs and Interact with Peers. Includes the Free Deal Digest Weekly Newsletter: India's First & Most Exhaustive Transactions Newsletter.