From corner office to consultant’s room, veterans see big switch todayheadline

Large Indian business groups are “rebadging” a bunch of legacy leaders and C-suite talent who have been with the company for a long time by moving them into consultant roles or making them “independent contractors” while divesting them of most of their execution powers, according to industry insiders, board members, HR and legal experts. Most of these senior leaders are in the age bracket of 55 or above, they said.
Arapid pace of disruption post pandemic, foray into new business areas, inorganic growth plans and global ambitions is prompting companies to keep making the churn by paving way for Young Turks who are expected to bring in fresh perspective and understanding of technology and are believed to be more “market worthy” for millennial consumers.

“There is a significant increase in the number of instances in which large conglomerates are retaining many senior and legacy professionals by shifting them from full-time payroll to independent contractors or consultants,” said Anshul Prakash, partner, Khaitan & Co.

So, what happens to senior C-suite leaders when they are replaced by younger leaders, and they still have some runway before hanging up their boots?

Some are made mentors and advisers. In companies where the promoter has vacated space to hire aprofessional CEO, old-time executives are retained as consultants to the promoter group.

Senior leaders are also made a part of a separate internal audit team reporting directly to the promoter. “Many are moved to lead smaller businesses, or businesses that are more in auto mode and do not require a high level of innovation, some others are moved to business strategy roles where they continue to work with the top brass and can still add value,” said Jyoti Bowen Nath, managing partner, Claricent Partners, an executive search firm. This comes at a time when there is an increasing focus among large groups to bring young leaders, many even in their 40s, to the helm of businesses as promoter-led companies are charting out a conscious strategy to appear modern and new-age to the consumers, investors and other stakeholders. The typical sweet spot for CEO age is 51-52 when the leader has a runway of at least 8-9 years.

“Traditional Indian companies — many of them in the manufacturing sector — want to become true blue organisations rather than being perceived as a close-knit group of legacy managers or leaders. Companies have to strike a balance by moving some of the old-timers or legacy leaders to roles of a mentor or an adviser but not much execution power,” Prakash added.