Many big businesses in the country like Reliance Industries (RIL), Larsen & Toubro (L&T),

Mahindra & Mahindra (M&M) and Wipro are in the throes of a top management rejig. Their
old management structures, often driven by the promoter-manager or a company-lifer CEO,
were good enough for punching above par growth in the 1990s and 2000s. But, as the
complexity of doing business increases multifold—from geographical diversity, non-
conventional competitors, shorter business cycles, complex technologies—and emerging
opportunities tease core business beliefs, clearly it’s time to ring in the new or risk missing
the bus. In fact, of late, anecdotal evidence suggests that no other issue is consuming
company managements more than the capability and readiness of their top honchos to
harness the humongous opportunity that an economy growing at close to double digits
presents across sectors. No wonder, a host of them are busy with internal reorganisation to
remain agile and nimble for the next phase of growth.

The country’s biggest engineering and construction company, Rs 45,000-crore L&T, recently
announced splitting itself into nine virtually independent entities, with a dedicated company-
style CEO, CFO, HR head, board, and a separate profit and loss account in an effort to
become more competitive, develop a stronger leadership pipeline and clearer succession
path for high performers to the corner room. RIL is working on a structure that moves the oil-
to-retail conglomerate from its erstwhile ‘entrepreneur’ driven style to a process, professional
CEO approach of its key businesses in oil, gas & energy; retail & telecom; petrochemical &
polyester and SEZs. Information technology major Wipro junked its three-year-old joint-CEO
model and settled for relative newcomer to lead it back to industry-beating growth and
handed over decision making to managers close to the market. And M&M is quietly
populating its India ranks with expats to see it through new businesses in aerospace and
two-wheelers, even as it pushes home-grown managers to its operations in over six dozen
global locations.

Though not exactly similar in nature, the succession process currently on at the $90 billion
Tata Group and at Infosys Technologies in replacing outgoing chiefs Ratan Tata and NR
Narayana Murthy, respectively, is also grappling with issues of how the new person fits in
with the challenges these organisations face in the post-slowdown, Chindia-rising new world
business order. Murthy has already spelled out the challenges for his replacement—making
and managing “a truly multi-cultural organisation with local leadership and local talent”. Tata,
too, had hinted that his successor needs to marry the group’s Indian values with its
overarching global reach, with around two-thirds of revenues coming from outside India, and
that the group is open to an outsider, even a foreigner, if need be.

L&T’s current chairman & managing director AM Naik has been very categorical on the need
for the software-to-rigs monolith to operate in a more entrepreneurial way, even while the
country’s largest private company, family-owned RIL, seeks a more ‘process’ driven future
for itself. In fact, at first go, L&T’s and RIL’s approach may appear diverse, but essentially
both are trying to de-bottleneck their top management and create an empowered group of
leaders to take on roles erstwhile fulfilled only by the owner-manager or the larger-than-life
professional CEO. As RIL scouts the globe for new energy sources such as shale gas, and
enters big businesses such as power generation and broadband, it’s clear that a small group
close to the chairman taking all calls on things strategic and operational is no longer
plausible, and the process of creating a strong leadership pipeline needs to be
institutionalised. This new-found ‘process’ and ‘institutional’ orientation to top management at
RIL also becomes necessary as more and more of its revenues come from outside India,
and therefore the need to be in sync with global best practices in human resources, too. First
reports out on the business transformation plan being drafted for it by management
consultants AT Kearney and Booz & Company point that the blueprint is as much about its
new investment strategy as the management pyramid that will oversee it.

At the core of most of these recent management rejigs is the realisation that it is the drive,
skills, integrity, empowerment and resourcefulness of people, especially at the top, that will
separate the winners from the also-rans. For instance, tomorrow’s leader in the IT services
space will be determined by how the top leadership in tier-1 companies is able to crack the
elusive non-linear model of growth, which is making growth relatively independent of the
number of coders added to the company’s manpower. Or for a currently predominantly
business-to-business focused company like RIL and L&T to grow or acquire managers
capable of handling scale in consumer-facing sectors like retail, banking, finance, retail
broadband, etc. Recollect that RIL is staffing, at the top, its five-year-old retail subsidiary,
Reliance Retail, with expats from Southeast Asian countries used to big box retail, in order to
manage the scale that is gradually building up here. And L&T has already broken tradition
and hired outsiders to head two of its promising businesses—power and IT. Tata Motors
again picked an outsider, and a foreigner at that, as its global CEO last year. Clearly, as far
as getting ‘people ready’ for the future, there are no holy cows for India Inc.