They say you join a good company but you leave a bad boss. Personal influence goes a long way in making companies what they are. Often, it is only one or two people at the top that guide the entire organisation. A CEO, with his charisma and leadership abilities, exercises personal power, lending the company much of its brand worth.
Taking Narayan Murthy out of Infosys is akin to taking the soul out of a human body. Thus, when key persons leave an organisation, the impact is bound to be enormous.
At the senior level too, not all persons have the same degree of impact on the organisation. There are two types of CEOs in the company. One is called the insider CEO, who has worked in the company for many years and has grown within the company. The second is the outsider CEO who is hired by a company to run it professionally. If the latter leaves, the impact is less pronounced if he is not extraordinarily brilliant. He might have come in with a given target and task but an insider has his own fan following of 10-15 years. If he suddenly decides to leave and take up another job, then the company will definitely face the brunt.
Senior management drives the ship of the organisation towards achieving a well defined long term vision. As the composition of senior management changes, the shakiness can be experienced by the entire cast and crew riding the ship. A leaving CEO, for one, can take away a lot of employees with him to a different organisation. It is now the loss of a single person, but of multiple employees, some of whom may be key senior persons. The negatives are felt by the existing employees too. The morale of existing employees can suffer great damage if the senior person leaves without warning and the problem is not addressed quickly. The magnitude of impact also depends on what kind of hold the person has on the company. HR should manage the transition well and reveal the right information to the right people at the right time. Transparency with caution is critical.
At the same time, fresh management in place of the existing one has its own benefits. Organisations often need a fresh face and a new perspective. People who know too much about the company might not want to take even the necessary risks. Thus, a stagnant company looking for growth might fill a senior post with a person known for growth.
Usually senior managers don’t just wake up one morning and decide to leave. Their actions are guided by rational considerations. Hence, the impact should be analysed well in advance to minimise any damage. The most common reason why senior managers may quit is to start their own ventures. Since senior managers handle critical challenges and occupy critical positions in organisations, it is important that their departure be planned properly. One of the ways is for them to remain associated with the company even after officially leaving, through a mentorship arrangement. Mentors not only help the organisation but also the individual who has left and the successors who might need handholding.
Among other preventive measures, it is important that the company identifies and clearly defines the roles of those at the top. Key people constitute the leaders who strategize business plans. Therefore, successful organisations define their roles and have a system of frequent assessments. They evaluate the imperatives appropriate for meeting any challenges arising out of the void created by the departure of senior managers. Conscious effort should be made to evaluate the most suitable candidates who have been identified and adequately trained to eventually replace the managers. Collective decision making process, empowerment of employees, job rotations to provide exposure and understanding of the business plans, relevance and significance of team building, interpersonal relationships, effective integration of system, delegation of authority with proper control, periodic performance appraisal and feedback system, grievance procedure and manpower planning in consonance with business plans are some of the most effective tools that will help to deal with the impacts of senior managers leaving the organisation.
Additionally, senior managers themselves need to take preventive action in time. Every departing senior manager should indulge in careful planning and developing leaders from within. Even in case of an insider CEO, it is critical to create redundancy by creating multiple levels of heads, departments and taskforces and allowing different people to lead these taskforce, such that one person may outshine the others can later take control.
Whatever the route, even in the most difficult situations, quick and intelligent handling by senior officials, the board and the government can prove to be a boon for the entire organisation. No damage is done as long as the transition is smooth and well planned.