It’s called a ‘What if a truck hits your top boss?’ situation, in common Corporate parlance. In layman’s terms, it means what if a top executive in your Company – the MD/CEO, COO, President, Director or VP - resigns? If such a situation arises, how does it affect the day-to-day functioning of the Company? What does a Company do? Should it appoint a replacement as soon as possible or chart-out a contingency plan for such eventualities? Here’s a perspective:
The Impact
Today’s businesses are more dependent on their top leadership to provide a vision and a business strategy that differentiates a Company from its fierce Competitors. In other words, most corporations are reliant on their key human assets to survive and thrive. Therefore, the retention of its top leadership pre-occupies the minds of many business houses. The impact of a leader’s exit manifold. Not only does it affect business initiatives, but also the morale of employees – particularly the top and middle layers. Of course there could be even a more direct impact – on stock market valuation, on the retention of clients or on a big project(s).
Damage Control
The impact needn’t necessarily be unpleasant. The Company should certainly communicate openly with its employees, so that rumours don’t start and spread. Many times when changes are explained in the right perspective, the concerns get dissipated. Further, the exit of a leader could also be seen as an opportunity - a blessing in disguise, as the Company would now be able to hire a leader who possesses fresh competencies and who could help Implement certain ‘desirable’ changes in strategies and policies that were not possible earlier. However, the process to hire a replacement could turn out to be expensive (in terms of time, energy and money); and sometimes the transition to a new leader may not be well managed. Of course the best antidote is to ensure that companies are run on sound business principles and policies and not by an individual leader’s whims. That way, continuity is best assured.
Read More...