Industry
Mint Primer: The long and short of a CEO’s transition time
Summary
- Typically, if it’s a planned handover, the CEO starts in six months to a year of being announced. Investors and employees want to hear from leaders quickly to determine the direction a company is headed.
Telecom major Bharti Airtel has just announced a new CEO & MD, who will take charge 14 months from now—on 1 January 2026. That’s a long waiting period. Is there an ideal CEO handover time? Mint explains.
What’s the norm for a CEO transition?
It depends. On 13 August, Starbucks fired its CEO Laxman Narasimhan and the new boss Brian Niccol took over in a month. At Boeing, Kelly Ortberg took charge as CEO within days of the announcement. Elliott Hill’s transition as Nike CEO was within a month of the announcement. Both Starbucks and Boeing were grappling with performance issues, hence the quick transition. Typically, if it’s a planned handover, the CEO starts in six months to a year of being announced. Investors and employees want to hear from leaders quickly to determine the direction a company is headed.
Are long transitions unusual in India?
No. Take the case of adhesive and chemicals maker Pidilite Industries. It named Sudhanshu Vats as the managing director designate in February 2024. But he takes over in April 2025, when incumbent Bharat Puri steps down after the completion of his tenure. In October 2024, pharma industry veteran Shyamakant Giri was appointed as the new CEO of Gland Pharma and he starts in his new role from 15 January 2025. In IT services companies, however, the transition times have been much shorter. In April this year, Srinivas Pallia replaced Thierry Delaporte as CEO of Wipro in about a week.
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Does the transition period differ for outsiders?
In the case of an external candidate, the handover period, barring crisis situations (like in the case of Starbucks or Boeing), could be longer, as the new hire spends time understanding the corporate culture, processes, organization structure, etc. In any ‘smooth’ handover, the incumbent typically ensures that the next person is off to a great start—internal or external.
What is Bharti Airtel’s new CEO plan?
Telecom major Bharti Airtel on 28 October said that Shashwat Sharma, the current chief operating officer, will be appointed MD & CEO on 1 January 2026, while the current chief, Gopal Vittal, will move into the role of executive vice chairman. Sharma has started overseeing the entire consumer business. Vittal continues to manage the rest of the business, including enterprise and human resources. When Sharma takes over, he will be responsible for both consumer and enterprise businesses.
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Is ‘long’ ideal for succession planning?
Long transitions may not necessarily signal great succession planning. In fact, it could send mixed signals to the market and employees, with two bosses around. However, a longer transition period does give time to the new boss to adjust, in case of external candidates—though they may not learn much from a sitting CEO if the firm’s doing badly. According to a McKinsey report, poorly managed CEO and C-suite transitions wipe out close to $1 trillion in market value every year in S&P 1,500 companies.
