During the life of an entrepreneur, often comes a time when he or she decides to hire a professional CEO/manager or let a co-founder take over the reins.
From Microsoft to Apple and closer home from InfoEdge to Flipkart, many companies have seen this successful transition. In such a transition, a professional is asked to successfully run daily operations, even as founders devise future course and strategy of their company.
However, the transition at India's first successful tech startup - Infosys from its old guard to the new guard has been hardly smooth.
There were questions raised by the founders of the USD 10 billion tech services major over governance by the new guard.
The fight among board members and founders ultimately spilled out in open. The embattlement at Infosys offers valuable lessons to entrepreneurs who are planning to devise a succession plan or appointing a new manager in charge of the business.
It offers key insights on how not to transition your company into new hands.
Here are key lessons from the Infosys saga:
# Don’t spread rumors in board about your own co-founders/managers/appointees. It will harm your own long built reputation as well as the company's when the word gets out.
# Infighting, allegations and counter allegations will also hamper your chances to think big and attract great talent. It will hamper your way to assume a mentor role. Keep the problems confidential lest it impact employee morale.
# Don’t create distractions for your own co-founders and professional CEOs. Have a clear policy on how and what to communicate to the public via media. Use of social media – should be streamlined with a clear guideline and policy.
# When you hire a co-founder or a CEO for your own business - don’t nit-pick him. Give him or her a free hand and make them learn through their own mistakes. Mentorship is different from micro-management.
# Think long term about the company’s reputation and business longevity. Often your way and style of thinking which brought the company from point A to point B might not help it reach point C. You might find people with entirely new skillset and ability to work with millennials to take the company to the next level. These may differ with your own managerial style prevalent in earlier decades.
# Any problems with your appointee/s should be solved with clear communication. Especially in family owned businesses, professional CEO have a hard time dealing with the family and vice versa. The board should rule supreme in case of conflicts between family heirs and company management.
# Don’t breed nepotism and make your progeny / family heir fight with the company management which is working hard to take the company to the next level. The roles should be clearly defined if both are working under the same umbrella.
# Emails have the tendency to leak. Try communicating the problems face to face. If not resolved, then it might be prudent to change the management or relinquish control.
Founders should think of their companies as parents and leave the child (company) on their own once they have achieved maturity/adulthood. Controlling the child after he or she has achieved maturity will only backfire. Imparting valuable lessons learnt will only help you grow and learn from the next generation of management.
# If the board sides with the new CEO and founder still wants to retain control, the only way out will be to win the trust of the board and possibly take the helm of the company again to bring it back on track.
# It’s true that founder’s passion is irreplaceable.
Once appointing a professional as CEO-in-charge make him have enough skin in the game to keep motivation levels high. Understand his or her reason to join your company and if agreed upon let him / her steer to that course. Lastly, have a succession plan to the new CEO as well.
harsimran.julka@nw18.com
(This is a comment piece. Views are personal.)
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