How do Indian companies structure their CEO role? Discover the preferred architecture and reporting structures shaping leadership in India’s top companies.
๐๐ผ๐ย ๐ฑ๐ผ ๐๐ป๐ฑ๐ถ๐ฎ๐ป ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ ๐๐ต๐ฒ๐ถ๐ฟ ๐๐๐ข ๐ฟ๐ผ๐น๐ฒ?
๐๐ ๐๐ต๐ฒ ๐๐๐ข ๐๐๐ฝ๐ฝ๐ผ๐ฟ๐๐ฒ๐ฑ ๐ฏ๐ ๐ฎ ๐๐ข๐ข ๐ผ๐ฟ ๐๐จ ๐๐ฒ๐ฎ๐ฑ๐? Or both? Or do all functions such as Sales & Marketing, Finance, and R&D report directly to the CEO?
๐๐ป๐ฑ๐ถ๐ฎ๐ปย ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐ผ๐๐ฒ๐ฟ๐๐ต๐ฒ๐น๐บ๐ถ๐ป๐ด๐น๐ ๐ฝ๐ฟ๐ฒ๐ณ๐ฒ๐ฟ ๐๐ต๐ฒ ๐ฆ๐๐จ ๐ฎ๐ฟ๐ฐ๐ต๐ถ๐๐ฒ๐ฐ๐๐๐ฟ๐ฒ, ๐๐ถ๐๐ต ๐ด๐ฌ% ๐ผ๐ณ ๐๐ต๐ฒ ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐ต๐ฎ๐๐ถ๐ป๐ด ๐ฎ๐ป ๐ฆ๐๐จ ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ. Typically, most companies have between 3-5 SBUs. And this is not just the large companies. Anecdotally, we see that our clients, as they approach the โน3000-โน5000 crore benchmark turnover, strongly prefer to have a BU structure, if they have not already pivoted to this structure earlier.
Of course, the nature of the industry plays a big role. For commodity firms, the threshold might be higher, while for firms with specialized or technical products, the threshold might be lower. However, ๐๐ต๐ฒ โน๐ฏ๐ฌ๐ฌ๐ฌ-โน๐ฑ๐ฌ๐ฌ๐ฌ ๐ฐ๐ฟ๐ผ๐ฟ๐ฒ ๐๐ฒ๐ฒ๐บ๐ ๐๐ผ ๐ฏ๐ฒ ๐ฎ ๐ด๐ผ๐ผ๐ฑ ๐ฟ๐๐น๐ฒ ๐ผ๐ณ ๐๐ต๐๐บ๐ฏ.
Within a BU structure, firms seem to be divided on how much the BUs should control. Some 32% of the companies have ๐ฏ๐ผ๐๐ต ๐ฎ ๐๐ข๐ข ๐ฎ๐ป๐ฑ ๐๐จ ๐ต๐ฒ๐ฎ๐ฑ๐, meaning the SCM & Operations are centralized, with the BUs largely running the commercial function. Most of the firms (48%), however, seem to be folding the important commercial and operations functions within the BUs themselves.
We don’t have long-term data on how this has evolved over time, but as we engage with promoters to help them find CEOs for their newly established BU structure, we sense a preference for folding as much within the BUs as possible and holding them accountable.
Interestingly, in one case, the client took a geography-based approach (US and Non-US business) for creating the SBUs, while in another, the client took the product group approach (commodity and specialty).
๐ก๐ผ๐๐ฒ: ๐๐๐ “๐พ๐๐ ๐๐๐ฃ๐๐จ๐๐๐ฅ๐ 2024” ๐จ๐๐ง๐๐๐จ ๐๐จ ๐๐๐จ๐๐ ๐ค๐ฃ ๐๐ฃ ๐๐ฃ๐๐ก๐ฎ๐จ๐๐จ ๐ค๐ 100 ๐๐ฃ๐๐๐๐ฃ ๐๐ค๐ข๐ฅ๐๐ฃ๐๐๐จ ๐๐๐ง๐ค๐จ๐จ 20 ๐จ๐๐๐ฉ๐ค๐ง๐จ ๐๐ค๐ซ๐๐ง๐๐ฃ๐ ๐๐ค๐ฉ๐ ๐ข๐๐ฃ๐ช๐๐๐๐ฉ๐ช๐ง๐๐ฃ๐ ๐๐ฃ๐ ๐จ๐๐ง๐ซ๐๐๐๐จ. ๐ผ๐ฃ๐๐ก๐ฎ๐จ๐๐จ ๐๐จ ๐๐๐จ๐๐ ๐ค๐ฃ ๐ซ๐๐ง๐ฎ ๐๐๐ฉ๐๐๐ก๐๐ ๐๐จ๐จ๐๐จ๐จ๐ข๐๐ฃ๐ฉ๐จ ๐ค๐ ๐พ๐๐๐จ, ๐พ๐๐๐จ, ๐๐ฃ๐ ๐ฉ๐๐ ๐๐ฃ๐ฉ๐๐ง๐ ๐พ๐๐ ๐ฉ๐๐๐ข, ๐๐ค๐ซ๐๐ง๐๐ฃ๐ ๐ฃ๐๐๐ง๐ก๐ฎ 1100 ๐ก๐๐๐๐๐ง๐จ.
๐ก๐ฒ๐ ๐ ๐๐ฝ: “Professionalization of the Indian CEO role”
