Average tenure of CEOs and MDs has come down to 1-3 years.
The aspiration of Indian companies to reach global heights, especially in technology and consumer space, is mounting pressure on the honchos. This has led to their quick exits from their posts — within 6 months to 3 years. In last 2-3 years, the average time chief executive officers (CEOs) and managing directors (MDs) spend with organisations, in sectors like IT, BPO, retail and media, has come down to 1-3 years.
R Suresh, MD, Stanton Chase India, a leading headhunting firm, says: “The evaluation of CEOs’ performance is getting stringent as well as rigorous today, especially against the backdrop of Indian companies’ foray into all major global markets. Also, the performance is critisised from stakeholders like analysts, stock markets, board of directors, etc.”
Bhaskar Pramanik of Microsoft India, Raghu Pillai of Future Group, Rajan Anandan of Google India, Rajesh Kamat of CA Media and Arun Kapoor of Dish TV are a few examples of quick movements.
Sunit Mehra, managing director of Mumbai-based executive search firm Hunt Partners, says: “The inordinate pressure to deliver quick results in an ever-changing and uniquely challenging economic scenario would probably be the most severe problem.” Redundancy could also be due to an event such as a merger or acquisition, he adds.
Raghu Pillai, a top executive in the Indian retail industry who died recently, had last year joined back Future Group as CEO after spending about 4 years as the president and CEO of Reliance Retail. Before Reliance, he had spent only one year at Pantaloon Retail and, interestingly, he had spent 9 years at RPG Group from 1996 to 2005.
Atul Vohra, managing partner, Transearch India, says: “The key reasons include demand-supply mismatch and increasing demand and expectation from shareholders.” According to him, the accountability level of CEOs is increasing as shareholders demand better performance.
In less than a year since he took over to lead software maker Oracle’s India business as its managing director, Bhaskar Pramanik quit the post and joined Microsoft India as its chairman recently.
In January this year, Rajan Anandan, who had led Microsoft India as its managing director since 2008, joined Google India as its vice-president, after having spent two years at Microsoft. Anandan, who had joined Dell Inc in 2004, had left the position of the company’s country general manager in 2008.
Govind Iyer, Partner at Egon Zehnder International, says: “Companies are now planning succession across all levels and target 4-5 years in every role, with a view to getting fresh ideas and thoughts.”
Last year, Tech Mahindra replaced Sanjay Kalra with Mahindra Satyam’s C P Gurnani as the CEO. At the end of 2008, Jeya Kumar, CEO global IT and business process outsourcing company Mphasis, resigned after his 1-year tenure. The company has appointed Balu Ganesh Ayyar as the new CEO.
Arvind Agrawal, president (corporate development & human resources), RPG Enterprises, says: “In a competitive economy with an unprecedented pressure, changing and growing aspirations of customers, shareholders and employees, a CEO is caught between hard place and a rock.”
The media sector, which has been going through an intensifying competition, has also witnessed the churn at top level.
In mid-2009, Reliance BIG TV DTH service CEO Arun Kapoor quit withing six months of joining the company and joined back Dish TV.
Colors CEO Rajesh Kamat joined Chernin Group’s CA Media as its India CEO last week, after three years at Colors. He was the managing director of Endemol India during 2006-2007 before joining Colors in 2007.
According to Shiv Agarwal, CEO, ABC consultants, shareholders’ expectations today are higher. “They expect fast changes and want something new,” he said. Agarwal says this trend is more common in IT/BPO and the financial services industry.
Girish Paranjpe, who quit as CEO after spending 21 years at Wipro, had said: “Three-five years is the ideal time for a CEO to continue in the same position in a company.”
