1. SUCCESION PLANNING
THE GENDER ANGLE
“THE CASE OF MEHTA STEEL”
2. CASE SUMMARY
About Rakesh Mehta
The Probable Successors
3. RAKESH MEHTA
From Uttar Prdesh
Came to Mumbai in 1971
First job in Iron and Steel as a helper-cum-clerk
Learned about inportant traders and consumers
of steel market
1975, a broker in steel market
1977, started Mehta Steel Corporation
4. Mehta Steel Corporation
1977, started fuctioning
1986, Own office
1989, mehta traders was established
1995, got into manufacturing
1996, mehta steel PVT Ltd.
As of 2003-04, two steel manufacturing units ,
capacity of 20000 tons per annum
30 crores sales in 2004-05
5. COMPANY STRUCTURE
• Wife and a friend are directors
• Centralized decision making
• Need based – lean structure
6. The Probable Successors
Oldest married, no interest
Youngest in college
Second Daughter, interested and pursuing
Nephew : with company since 1998, looks after
purchase, not professionally qualified nor
modern in outlook
A technical sound manager from outside
7. Future of Mehta Co.
Rakesh mehta is not preparing any succession
He is open to discussion
He has no gender bias, and is happy if his
daughter wants to help him in business
But for the moment concentrating on day to
But what if ….???
9. Various Factors
Education Stress factor
Modern outlook After marriage
Support system Male Dominance
10. FACTS AND FIGURES
11% of 240 all large companies - have women CEOs, according to a
EMA Partners. In comparison, only 3% of the Fortune 500
companies have women CEOs.
35% of the women CEOs are also promoters of their companies
1. Rajshree Pathy – “Rajshree Sugars and Chemicals”
2. Meher Pudumjee -“Thermax”.
The other 65 percent are professional CEOs.
11. SECTOR WISE
54% , in financial services.
1. Chanda Kochhar is the Managing Director and CEO of ICICI
2. Shikha Sharma heads Axis Bank and
3. Kalpana Morparia is the Country Head of JPMorgan
4. Naina Lal Kidwai occupies the corner office at HSBC Meera
Sanyal at ABN Amro.
5. Manisha Girotra heads UBS, Ashu Suyash Fidelity.
In the Fortune 500 list, only 7 percent women CEOs are from
11% of the Indian women CEOs are in the MEDIA
11 % IN PHARMACEUTICALS.
1. Kiran Mazumdar-Shaw is the Chairman and Managing Director of
2. Villoo Morawala Patel is the Founder, Chairman and Managing
Director of Avesthagen.
8% In Consulting
8% In FMCG and Consumer Durables. The big names here are
1. Vinita Bali of Britannia
2. Nadia Chauhan of Parle Agro.
4% In Manufacturing and
4% In It And It-enabled Services.
1. Hewlett-Packard, is headed by Neelam Dhawan.
13. Women In top position
Akhila Srinivasan, Managing Director, Shriram Investments Ltd
Chanda Kocchar, Executive Director, ICICI Bank
Ekta Kapoor , Creative Director, Balaji Telefilms
Jyoit Naik, President, Lijjat Papad
Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon
Lalita D Gupte, Joint Managing Director, ICICI Bank
Naina Lal Kidwai Deputy CEO, HSBC
Preetha Reddy, Managing Director, Apollo Hospitals
Priya Paul, Chairman, Apeejay Park Hotels
Rajshree Pathy, Chairman, Rajshree Sugars and Chemicals Ltd
Ranjana Kumar ,Chairman, NABARD
Ravina Raj Kohli, Media personality and ex-President, STAR News
Renuka Ramnath, CEO, ICICI Ventures
Ritu Kumar Fashion Designer
Ritu Nanda, CEO, Escolife
Shahnaz Hussain, CEO, Shahnaz Herbals
Sharan Apparao, Proprietor, Apparao Galleries
Simone Tata, Chairman, Trent Ltd
Sulajja Firodia Motwani, Joint MD, Kinetic Engineering
Tarjani Vakil, former Chairman and Managing Director, EXIM Bank
Zia Mody, Senior Partner, AZB & Partners
Women CEO’s in india nearly 4 times more than that of the US.
16. THE DILEMMA
INDIA is full of family run businesses – reliance, birla, godrej, tata,
Wrong CEOs have virtually drove companies to bankruptcy. When
Rohinton Aga, MD, Thermax passed away in 1996, Abhay Nalawade
was appointed his successor.
Indian business houses like
The Murugappa Group
The Eicher Group
have demonstrated a high degree of professionalism in this regard.
17. Companies which have faced Companies currently facing
prominent family-owned Tata
business houses that got
afflicted by “messy
succession issue” include L&T
18. Few Facts In Family Run Business
Only 13% of family-run businesses survive till the 3rd generation &
only 4% go on to the 4th generation.
Additionally, 1/3rd of the business families disintegrate because of generational
conflict at the leadership levels.
Family disputes and the lack of succession planning has triggered the decline in
fortunes of many business families.
Traditionally, succession planning has always been a hush-hush affair, clearly
depending upon the life expectancy of the founding chairman or patriarch.
Succession planning in family-run businesses is generally an intuitive process with
the family patriarch taking the decision as to who will take charge of the business
They forget the big picture and stay focused on day to day
They have an exaggerated sense of self importance and begin to
think they are indispensable.
They are poor in building a second layer of management because of
an unwillingness to tolerate good people or to delegate.
They try to avoid conflict and hesitate to send a clear message who
the successor is going to be.
They continue to play a role in the company even after the new
CEO has been put in place.
20. THOUGHT PROCESS
Is leadership growth keeping pace with business growth?
Is leadership development keeping pace with the strategic needs of
Are vacancies in senior management positions being filled up
smoothly through internal promotions?
Are objective plans in place to identify and develop future leaders?
Identify the key leadership criteria and provide support to potential
leaders to meet these criteria.
Select a few high potential leaders and concentrate the resources
available on their development.
Monitor the results of the succession planning process at all levels of
the organization regularly
22. Why Go Outside
Change of strategy, business models or nature of business that
require a significant change from the way the organization ran earlier;
No one successor clearly identified;
Identified successor not ready;
As part of good governance, looking for the best person rather than
only from within; and
For enhancing the image of the organization by hiring a well-known
CEO from outside.
The Rahul Bajaj Group headed by Mr. Rahul Bajaj has already divided
responsibilties for the group amongst his two sons.
The GMR Group has in place a family constitution that details the role of each
member in the business. On the basis of performance. From amongst them, the
family board, which comprises his two sons and one daughter and their spouses,
will elect the successor through a majority vote.
The Chennai-based Murugappa group has instituted a rule specifying the
retirement age of the group’s chairman, after which he compulsarily retires, making
way for his successor.
HCL group too saw Ms Roshni Nadar, the daughter of the founder Mr Shiv
Nadar, take over as the chief executive officer of HCL Corp, the group’s holding
company, in 2009.
54 – should start planning if not identify.
Seek out strengths of all potential successors
Have trust and cooperation of board
Chalk out a rough draft of succession plan in case of any
In case of choosing a successor
Involve in day to day activities.
Increase the company market
Bring in new talents
Make sure successor knows all stages of company divisions