WHO’S NEXT?

FINDING THE RIGHT SUCCESSOR TO PASS-ON THE CEO’S BATON IS ONE OF THE MOST CRITICAL STRATEGIC DECISIONS THAT A COMPANY SHOULD TAKE... MUCH BEFORE THE CEO IS ACTUALLY READY TO ‘PASS IT ON’.

He’s finally back in business (thank God for that!). Fortune magazine has named him ‘CEO of the Decade’ this month. He is the perfect choice and there can be no one better, for this man has single handedly redefined mobile communication (with the iPhone), made the geeky PC hip-n-happening (with the Mac- Book) and brought back Apple from the brink. Steve Jobs is a man whose products inspire a religious devotion in users – and he is worshipped by many around the world. But this is where the problem lies. Early this year when Steve Jobs took a leave of absence from his company to get a liver transplant, Apple’s stock slid to an all time low. It’s said that when Jobs sneezes, Apple catches a cold. If a company is all about a great personality and a not a great product there’s going to be a big problem of survival

Till recently, Apple was synonymous with Jobs. Not so much now and thankfully so. Without Jobs at the helm, Apple surprised Wall Street with its Q2 profits which showed the world that – yes Steve had shown the way, but the company was in safe hands without him too (under Tim Cook). Steve was back in September and got a standing ovation from the audience, not so much for the new iTunes software and new line of iPod Nano music player with video cameras, but for being the greatest icon of corporate world. Yes, the wizard is positively back but has ensured that Apple is definitely not just about its founder’s charisma, but about computers and others things – in which they are the best. Tim Cook seems to be the right choice for successor and Apple is apparently in safe hands.

When the man at the helm of affairs is a living legend and one of the richest persons in the world, finding the right successor gets a bit difficult. However, when you are a smart investor like Warren Buffett, you don’t just have one but four potential successors to choose from. For more than four decades, the man has been nurturing his firm Berkshire Hathaway, making it America’s sixth-largest company by market value. Choosing the next Buffett is as important for Berkshire as it is for America. Buffett at 77 is aware that the one question hanging on everyone’s mind is – who’s next? He knows and understands the sentiments and jokes that he has built Berkshire so that it could be run by a cardboard cutout or the bust of Benjamin Franklin. When a company is performing well, who its successor is going to be, becomes all the more important. And with Warren’s good planning, everyone’s optimistic that whoever the successor – Ajit Jain, David Skoll, Joseph Brandon or Tony Nicely – America’s most famous investor, the so-called Oracle of Omaha, will find the right guy as his successor.

GREAT IS NOT ENOUGH
When Jack Welch became General Electric’s CEO in 1981, the company was worth $14 billion and when he retired 20 year later, GE’s value had touched $500 billion. This was fabulous, but true success lies in the ultimate test: once the leader is gone, does the company continue to flourish? The most important job a CEO does is not just keep the balance sheets looking good, but finding the next man who can take the company forward. Jack Welch says, the most important business decision he took was selecting his successor. At GE, CEOs have the ‘airplane’ question that help them identify the next man. Imagine you are flying in one of the company planes and the plane crashes. Who would be the next chairman of GE? This simple question helped GE identify Jeff Immelt as successor for its top job. As Jim Collins discovered while writing his book ‘Good to Great’ – it’s getting the right people in the right job which is more important than strategy. Getting the right person for the most important post in the organization (that of the CEO) seems to be a leader’s most important task.

Back in the 1970s, American car giant Chrysler was losing money and faced bankruptcy. Its new CEO Lee Iacocca convinced the government to provide a $1.5 billion bail out loan. Soon this maverick turned around the company and made it profitable. Not just that, he returned the government loan seven years early. This grand-old-dad of business became America’s favourite straight talking leadership guru. His famous slogan “If you can find a better car, buy it” became a super hit. This business rock star retired from Chrysler in 1993. Today, Chrysler is bankrupt again. In May, President Obama announced a plan for Chrysler to file for bankruptcy - this time there was no knight in shining armour to save the company. Iacocca did a great job but sadly it was not enough to save the company.

A wrong successor can ruin even a great empire. History is proof that incapable kings and emperors have ruined everything their predecessors built. The extremely capable and intelligent Akbar, the greatest of Mughal emperors, was able to conquer and control all of northern and parts of central India. When he died, the empire extended from Afghanistan to the Bay of Bengal and southward to the Northern Deccan. But just making a grand empire was not enough. A series of weak successors and everything Akbar created was ruined when Aurangzeb took over the throne. Sometimes just keeping it all in the family may not prove to be a good idea.

HOMEGROWN OR NOT?
Who to choose as your successor may prove to be a tough question to answer. Succession planning needs to be done intelligently. It’s a slow process and a difficult one too. Nine years before his anticipated retirement, Welch said, “Choosing my successor is the most important decision I’ll make from now on. It occupies considerable amount of thought almost every day.” That’s what we call ‘visionary leaders’. And it’s these leaders who choose their successor from within the organization. ‘Home grown CEOs’ is the key word to successful succession planning. In the 1900s, Colgate and P&G were at par with each other, but by the 1940’s, Colgate had fallen to less than half the size of P&G. The reason? Poor succession planning. If you need to depend on some outsider to take your company forward it may be a wrong choice. All great CEOs have started their careers within the organization – no wonder they understand it the best. Jack Welch joined GE in 1960 as a junior engineer; Mike Eskew, the erstwhile CEO of UPS, the world’s largest package delivery company, started his career in 1972 in UPS as an industrial engineering manager. Under him, UPS saw unprecedented growth with revenues growing by nearly 57%. Not just that, its international package revenues more than doubled and its supply chain and freight revenues quadrupled. Contrast this to Carly Fiorina who joined Hewlett-Packard in 1999 as its CEO, becoming the first woman to lead a Fortune 20 company. Her decision to merge Compaq with HP led to her downfall and in 2005 she was forced out of HP. Dynamic, articulate and powerful, Fiorina had seemed the ideal choice. The media loved her and she adorned the covers of most business magazines. Yet, these may not be the right criteria for choosing a true leader. As Ram Charan states in his book ‘Execution’, most people assume that a great leader is one with vision, is articulate and can inspire. They forget the most important question: How good is this person at getting things done in the right manner? Do they set adrenaline pumping goals and energize the whole team to achieve these goals? Do others enjoy working with him? If the answer to the above questions is ‘Yes’ then you have found your man. Most of the time he/ she will be a person who started his career in your organization.

CREATING THE CULTURE
A successful business is one that not only has great management and an excellent business model, but also a great culture to hold the two together. To keep the culture one needs highly able managers who understand the company values and its business models. At Berkshire Hathaway, each of Buffett’s hand-picked successors are trained to run the business just the way he would. Many companies fail to do this and then need to rush back to their founders to be able to survive. Howard Schultz was brought back to help Starbucks survive the slowdown. Toyota is looking up to Akio Toyoda, the 53 year old grandson of the company’s founder, to help the company recover. For the first time in 14 years, Toyota is turning to its roots for leadership to help it tackle its worst crisis. Our country looked up to Sonia Gandhi to help the country and provide it the right leadership. Let that not happen to you.

Some of the world’s most admired companies are now being headed by new CEOs or are on the look out for new leaders. Ratan Tata too is looking for his successor and he has two years to find the right man. The fate of India’s most respected business will rest on those hands. P&G is replacing its longtime CEO A.G.Laffley with the 29-year-old company veteran Robert Mcdonald; Wal mart has a new CEO Mike Duke who replaced Lee Scott – a man who spent 30 years in the company. Next year, Douglas R. Oberhelman would look after Caterpillar and Bank of America too will have a new head in place. All these companies feature in Fortune’s list of most admired companies. Would they continue to remain so is what we need to see. If the successors are chosen carefully, these companies would continue to prosper. So if you want to build a great company, invest in a great successor. Just doing a great job is not enough. You need to ask yourself daily: Who’s next?

Get OUT GET NOTICED

THE ONE WHO CAN PUT HIS FOOT OUT OF THE DOOR, IS THE ONE MOST LIKELY TO SUCCEED. EVEN IN TODAY’S WIRED WORLD, DON’T UNDERESTIMATE THE POWER OF THE PERSONAL TOUCH. SO GO ON, AN. NOUNCE YOUR PRESENCE...

This is the story of a simple woman, a story of an Indian girl, born into a conservative family in Chennai, who went to the US to pursue higher studies and who while studying also worked as a receptionist from midnight to sunrise to earn money. Finally, after a lot of hardships she passed out from Yale University and got her first call for a job interview. She struggled hard and somehow managed to scrape together $50 to buy herself a western suit. Not having much idea about western wear, she landed up for the interview wearing a trouser that barely reached her ankles. She was rejected. Dejected and disheartened she turned to her professor at Yale for help, support and advice, and she got the simplest, yet best possible advice – “Be Yourself”. She wore a sari for her next interview and got the job. Today, Fortune ranks her as the most powerful woman in US business.

Yes, you guessed it – she is Indra Nooyi, Chairman and CEO, PepsiCo. And the Indiaborn Nooyi has been named as the most powerful woman in the US business for four straight years now. This Queen of the business world, and my personal favourite, has shown the world how if you need to survive you need to change; you need to adapt and reinvent yourself. Today, if she continues to sit pretty at the top spot, it is because she has consistently changed and reinvented herself, in tune with the times. Her secret – “being visible”. According to her, people need to know that their CEO cares about them and has a realistic vision. She feels the need to see and be seen. After becoming CEO, Nooyi’s goal was to visit 80 countries in her first five years as CEO so that she could see and also be seen. This strategy seems to be working for her. It was during her visit to China that she saw the resurgent trend of people eating according to traditional Chinese medicine. She immediately knew she had to find ways to incorporate Chinese medicine into Pepsi- Co’s products. China is such a huge market after all and one could not ignore it at any cost. Clearly, just ‘being there’ can work wonders for you and your organisation and help you choose the right path.

GET OUT, GET NOTICED
It is a highly wired world that we are living in today. Technology is doing all it can to help you stay connected. Be it SMS or e-mails, or Facebook, or LinkedIn, or the latest craze – Twitter – all these have made ‘staying-in-touch’ easier. Yet, while searching for excellence decades ago, Tom Peters and Bob Waterman discovered a very simple and effective trick that great leaders and companies put into use extensively to manage people and work. They called it MBWA – Management by Wandering Around. The strength of an organisation lies in its informal communications. One needs to know who they work with, what drives them, what their passions are, what are their fears, their dreams – everything. You need to stay “intimately in touch,” says Tom Peters, “if you want to manage well.” E-mails, Twitter and others of their ilk fail here.

In 2004, Peters was asked to give a talk to retailers. He talked to experts, searched the web and prepared a beautiful speech. But it took merely two hours of wandering in and out of shops, for Peters to scrap this speech and write a better one. Those two hours helped him understand the retail environment better. His advice – get out of your cubical. The ability to go out and talk and understand is the most important skill. If you are just relying on e-mail, it’s time you stopped and pondered on the importance of human-touch. Excellent companies are a vast network of informal, open communication, which is only possible when there is an environment of trust. Walk around to build that environment. When people see you, they will know you better and trust you more.

‘GET OUT GET NOTICED’ ...YET AGAIN
If you need to be visible to be successful, then the same applies to your brand too. You need to make sure your products are ‘visible’. How do you make your brand visible, is the moot question. Branding, after all, is a pivotal task for any company – some work out extensive advertising campaigns, while some use expensive celebrities to attract attention. Some others, however, take a different path.

In 2005, Nestle entered into a partnership with Coca-Cola. According to an agreement, Nestle could sell its Nescafe products through the world’s largest beverage makers’ vending machines and sales outlets. Suddenly Nestlé’s products were more visible and as expected in a few months, Nescafe’s market share, as well as sales revenues, increased drastically. Coca- Cola, on the other hand, used McDonald’s to increase its visibility. If McDonald’s sells Pepsi Cola instead of Coca-Cola, it would not take long for Pepsi to defeat Coke!

Lenovo too knew it had to be ‘visible’ to be seen as a successful company by the world. It went ahead and bought IBM’s PC business in 2005 and changed its image instantly. Now it was perceived as a “global brand” as opposed to a Chinese brand – because it used IBM’s distribution network to make itself visible and hence available world over. When Coca Cola abandoned its Indian operations in the 70’s, Ramesh and Prakash Chauhan decided to fill the void by launching Thums Up, with the punch line ‘Happy days are here again’. People loved it and the company soon set its cash registers ringing.

Ironically, it was the same Thums Up that Coca Cola acquired for a meager $60 million to get a one up on competition. Buying Thums Up also meant buying its distribution network and overnight Coca Cola was visible everywhere in India. Not just this, Coca Cola worked hard on its supply chain to cater to India’s vast rural market. It increased its ‘visibility’ like no other beverage company had done before and the strategy paid off. Today, rural markets account for almost 80% of new Coke drinkers and 30% of its total volumes.

This is a trick that Coke learnt from its senior – Hindustan Lever Limited – which entered India years ago and had mastered the art of being visible. In 2002, Sanjeev Gupta, Coca-Cola’s Deputy President said, “We want to be the Hindustan Lever Limited of the Indian beverage business.” Look carefully and you realise that it’s HUL’s fantastic distribution network that has prevented any competitor from even coming close to this FMCG giant in terms of overall market share. Great distribution means great visibility and great sales.

In fact, it is distribution that helped ITC Foods make its maiden profits this year. From being the tiniest company of the multi million dollar Group that was losing close to Rs.60 crores annually, it has indeed come a long way. With brands like Bingo and Sunfeast in its portfolio, the company’s revenues this year would be Rs.2,200 crores. It has indeed been ITC’s tremendous reach (through its extensive distribution network) that has given ITC Food its competitive advantage. Bingo’s marketing plan included ITC Foods’ distribution of more than 4,00,000 brand display racks at all points of sale. The strategy created such a powerful impact that competitor Frito-Lay also had to come out with their racks.

Yes, advertising gives a brand its visibility. But don’t forget the powerful impact of distribution and partnership strategies too. When Acer entered into a partnership with Ferrari, it started putting Ferrari logos on its laptops. This made Acer laptops standout and increased not just their visibility but also brand value. They began to be perceived as highly as Ferrari cars.

GET OUT – GET NOTICED... NOT JUST IN BUSINESS
If you want your career to go places – you need to do similar. You need to market yourself. You must be your own best advocate – otherwise your hard work may actually go totally unnoticed. The more visible you are, the more likely you will be remembered – especially during the time of raise or promotion. A recent study found that one of the reasons why women were not occupying more high level positions was they did not understand the art-of-self-promotion. So sit up, and find ways to become visible, to make your brand visible. If you want to win, you need to get out – and get noticed!

JUST ONE

‘One’ is not just the lowest single digit numerical value; neither is it just a show of miniscule strength. Instead, the digit has the wherewithal to change national destinies, unflinchingly challenge mighty emperors and irrevocably alter your life condition!

It is just another day, yet today, this one date has begun to signify something of great importance to all of us. Its impact has been felt all over the world. Yes, 9/11 or September 11 today symbolises terrorism. One incident on this day shook up the entire world. Overnight Kabul and Kandahar became the most talked and written about places. The world became more knowledgeable about bombs and forget about our way of thinking, even our manner of speaking changed. ‘Ground Zero’, the original meaning of which was the epicenter of a nuclear explosion, now meant something else entirely. ‘Terrorism’ was no more an activity that happened in far away places for Americans, but something that took lives in their own home. One event and look at the profound impact it has had on all of us.

In fact, one way to judge the impact of any event is to see how much it affects the language we speak. In that sense at least, 9/11 has added words like jihad, holy-war, Taliban and Twin-Towers to our collective vocabularies. Another event had similarly enriched the English language – World War II. Words like jeep, blitz, java, flak, sonar, radar, bazooka and atom bomb didn’t exist prior to World War II.

Clearly, one event can change a generation’s outlook. ‘One’ may be the smallest of numbers, but ‘one’ is all it takes to have a profound impact. It’s interesting to see how ‘one’ has influenced us in more ways than one. To start, take the date 9/11 and flip it once. This one change brings us to a date dramatically different from the previous one. If one stood for terror, and destruction and ruin, the other symbolised unification, hope and brotherhood. The 9th day of November or 11/9 was the day the Berlin Wall fell. If 9/11 divided the world, 11/9 was an attempt to unify a city that had been divided for over 30 years. The 28 mile barrier dividing Germany’s capital was built in 1961 to prevent East Berliners fleeing to the West. ‘One’ of anything (even the flip of a date) can do wonders.

ONE WORD, ONE ACT – CHANGE...
One word and its wrong interpretation caused irreparable damage. The Americans issued an ultimatum demanding the unconditional surrender of Japan. Nearing breaking point, the Japanese wanted to negotiate for peace, but not surrender unconditionally. They issued a statement using a Japanese word ‘mokusatsu’, which technically meant ‘refrain from comment’, but had another interpretation i.e. ‘ignore.’ And that is how the Americans decoded it. Keeping the Japanese ‘refusal’ in mind, Americans continued to fight and eventually dropped two atom bombs – an event that changed Japan forever. One wrong translation caused so much destruction. In contrast, one statement shot this actress to fame and resurrected her failing career. Yes, one racial slur shot Shipla Shetty to fame and made her a fortune. So much so that now everybody seems to want one!

But, it was bravery of a different kind that changed the world. A simple seamstress from Alabama refused to relinquish her seat on a city bus to a white man. It was her one act of courage that sparked the Montgomery Bus Boycott and brought the Civil Rights Movement to national attention. Jack Kemp ‘once’ said, “the power of one man or one woman doing the right thing, for the right reason and at the right time, is the greatest influence in our society.”

ONLY ONE, YET NOT INSIGNIFICANT
It may look small and insignificant but sometimes ‘one’ can have tremendous impact. It was one vote per precinct in key states that gave victory to George Bush. It was one vote by then Vice President Al Gore that approved President Clinton’s budget, which included the largest tax increase in American history. It was one vote that made Hindi the National language. History proves that one vote absolutely does matter. So next elections, remember that your vote could be the crucial deciding factor.

Compared to this vast universe you may look like a tiny dot but you have the power to control this vastness. However small, but you do matter. When in doubt hum the Song “Everybody makes a difference.”

ONE – IS ALL IT TAKES
It was ‘one’ film and ‘one’ title of the ‘Angry Young Man’ that changed the career of Amitabh Bachchan and catapulted him to fame. When he was deep in debt and was ‘written off’ by the industry, it was one game show – Kaun Banega Corepati – that again saw him riding the high wave of fame and fortune. Not just Amitabh, KBC even changed the fortunes of television. Suddenly, TV programming was hot & happening and worth watching again.

Back when Indians were fighting their war of independence from British Colonial rule, the favourite British jibe was that “Indians were not ‘manly’ enough to rule themselves.” Mohammed Salim was a simple boy from Calcutta, known for his ability to keep a football in the air. He, together with his team used football to give a firm retort to the British. He proved the British wrong by defeating them in their own game and showed that Indians were not inferior to the British in any way. Most interestingly, the Indian team played the game bare foot and defeated the haughty English men in boots. That ‘one’ victory sent a strong signal to the whole world!

Large numbers are simply no good because sometimes just ‘one’ is enough. One album ‘Thriller’ shot Michael Jackson to fame and made him immortal.

Napoleon was obsessed with the idea of ruling the world. He seemed unstoppable, conquering one country after another. It took one man, one day to smash Napoleon’s dream of invading Britain. In the Battle of Trafalgar, inspite of being outnumbered by the French, Nelson won and that too without losing even a single ship. The Trafalgar Square in London stands testimony to that beautiful victory.

In the corporate world ‘one’ is the new buzz word. Top executives globally are facing criticism for drawing hefty salary packages and the growing financial crisis. CEO’s are now pruning down their packages to just one dollar. Vikram Pandit the CEO of Citigroup will now take home a one dollar salary, Larry Ellison the Oracle CEO too would take home just a dollar this year as salary – a cool $999,999 less than last year.

Steve Jobs and even the founders of Google have been old members of the ‘$1 CEO club’, which now seems to be getting bigger and bigger. We hope that it also helps the economy – but one thing that it is doing for sure is attracting attention.

‘One’ is small, but has the power to make a big difference. Sometimes the number of chances that you get or need to completely overhaul your whole life is just ‘one’. As Abraham Lincoln said, “It matters not the number of years in your life. It is the life in your years.” Seize the moment now; know that this is your one chance to change everything. Strength, my friend, doesn’t lies in numbers, but in just that ‘ONE’ opportunity. Don’t miss it!