N.V. ‘Tiger’ Tyagarajan, President & CEO, Genpact, shares the need for a strong succession plan to groom leaders from within and help them in their transition

You were the CEO at GECIS, before the organization became Genpact and demerged from GE. How was the transition in becoming the CEO for the second time?

I think the transition was very smooth. It was part of a structured succession planning process that had been planned and orchestrated down to the last detail over a period of time. I don’t believe that anyone was truly surprised with my taking over. It helped that I had worked closely with the leadership team for a long time and we had experienced shared success. When we made the transition, the company was strongly positioned to deliver and we were confident that what we had built would help us sail through. It just felt like the right time and therefore, the transition was natural.

And on making the transition for the second time, this was different in terms of Genpact now being an independent, publicly listed company, whereas the earlier CEO role was of a division of GE.

What was the process followed for succession planning in your case?

When I rejoined the company, I was the senior most in the company after Pramod (Bhasin). However, it was not a given that I would be succeeding him. As the company grew, I spent a lot of time in the market and with clients; everyone agreed that being close to clients was an important aspect of running the company. In 2008, I took on the role of a Chief Operating Officer and this role was created because it allowed Pramod to do more things as I took on some of the responsibilities that he had in terms of the day to day running of the business. This also helped create a potential succession plan. In fact, this is how we do it right across the company. We identify people with potential, give them the exposure they need to grow, give them the ability to grow and then once they are ready, move them to the next level. But, nothing is a given until it happens.

How do you architect the succession planning process at Genpact, where while people know they are on a fast track, they also know it is not a given?

The architecture starts with our bi-annual talent review process. This is a robust, fairly intense process where we assess the talent depth by business and ensure that our talent strategy is in line with our business strategy. It is a very rigorous process across the organization; it begins at the bottom and finally, for the top 200-300 people, the review is with me and the rest of the leadership team. This is where we look at our leadership pipeline; there is a clear discussion about strengths, weaknesses and development needs of individuals. There is also a discussion about where can a person go in terms of his/her full potential, and then defining ‘full potential’ for each employee.

Each person is reviewed with respect to what the person is doing, what is the opportunity, what are the development needs, strengths and weaknesses. Consistency of performance over time is important, followed by attitude and then potential and performance, that form critical inputs. Once identified, we discuss the possible risk of people in that talent pool leaving the organization, who could be the successor, what role would that person succeed into and why, etc. So, it is a series of chess moves that are actually made to identify the right successor for each role and allow room for people to be grown within the organization.

If you see, the world is clearly defined as uncertain and volatile. So, you have to run your business with a clear understanding that your clients are going to have ups and downs. Therefore, you need very high flexibility in your business. This requires flexibility in moving people, moving locations, introducing new businesses, and so, flexibility is at the core of doing everything in business. At Genpact, your career has no boundaries. There have been people who have moved from sales to operations, to HR, to finance, and so on...some because they are actually capable of doing many things well and others who wanted to experience and learn multiple things. This process happens at all levels and has helped in growing the business continuously.

In your view, when it comes to a CEO position, is it better to groom internally or to hire externally?

If you can groom someone from within the company, it is so much better. There is more stability, there is more buy-in, and if the company is doing well, then why wouldn’t you find someone from inside? But in a situation where it is not possible to move someone from within to become the CEO, then there has to be a long-term plan to identify the person who has the potential to fit the role, and then a number of steps must be taken to create the opportunity and the process for bringing him/her from outside. All this must happen in a systematic manner.

How do you ensure that when you pick one out of the multiple potential candidates for the role, the others are not left unsure and insecure about their career in the company?

The trick is to firstly make sure that whoever is picked in the end is a natural and obvious choice. And therefore, at the CEO level, you have to take many steps for many years to actually make that happen. So, it is critical to give the identified successor the opportunity to do things that are different and broader. At the same time, he/she becomes part of a particular team, which he/she leads. So, this sends out the message that this person is going to be the next leader. The second is that while you do that, you should also simultaneously be talking to the others as part of their appraisal, their development process, etc. as to what bigger things they can do. Yes, you won’t be able to satisfy everyone. But, if you have taken all the right steps over the 2 or 3 years, then the chances of dissatisfaction are limited.

Of course, in a team of 20-25, there will always be somebody who might not with be happy with the decision.

How do you groom 20 people in your leadership team to prepare them for future business needs? Do you follow the same process, and how do you look at their careers?

Their career planning is done the same way. The HR leader, Piyush (Mehta) and I take charge of that. I do their appraisals and discussions, and I bounce it off Piyush. We document these discussions, which are then available for the HR leader to refer to. Over the year, the practice is to keep going back to those documents to assess what else is required to help the person. As part of grooming these leaders, we move their jobs and roles a lot in order to more develop the person and expose them to things that they need exposure to for better business acumen.