Company Outsider: Titan's succession planning ensures continuity and evokes confidence

Mint

14-05-2025

By naming Ajoy Chawla as its next managing director a full seven months before the incumbent, C.K. Venkataraman, is scheduled to retire, Titan has once again shown the way to smooth leadership transition. Chawla will be only the fourth MD of the company in the last 40 years since it was founded, a tribute to its succession planning. For context, Wipro has had that many CEOs in just the last 10 years while Jet Airways, before it shut down in 2019, saw six CEO changes in the previous 14 years.
By contrast, Titan's only three CEOs before Chawla have enjoyed long and uninterrupted tenures. Xerxes Desai, who laid the company's foundations, held the reins for 16 years. Bhaskar Bhat, his successor, steered Titan for the next 17 through an inherited crisis to eventual triumph, and finally Venkataraman who took over in 2019 and will end up with a six-year tenure at the top. While that's shorter than that of his predecessors, it is on par with global standards. Leadership consultant Russel Reynolds, in the latest report of its quarterly Global CEO Turnover Index says that the average tenure for outgoing CEOs is about 6.8 years.
Each of Titan's leaders has left a distinct mark on the company, embodying what transformational leadership theory calls inspiring change through vision. Desai, despite his outward appearance of an Oxford don, was a tough business leader who didn't shy from taking hard calls like axing a faltering five-year-old joint venture with Timex in 1997. Bhat, who took over in 2002, faced down an existential crisis when a failed European push in the late 1990s left Titan reeling, and steered the company to bumper growth and profits. That's when it caught the eye of Rakesh Jhunjhunwala, who was convinced of its potential to be a multi-bagger. Typical of the ace investor, much of his confidence stemmed from his faith in the company's leadership. Bhat lived up to his faith with a long-term vision that turned Titan from a watchmaker into a lifestyle juggernaut. Similarly, Venkataraman, in his six-year-long stint, has supercharged the jewellery segment, now the company's primary growth driver.
Management theory backs Titan's emphasis on leadership planning. The resource-based view argues that internal talent, when nurtured, becomes a competitive edge. But Titan doesn't pick its leaders out of a hat; it grooms them assiduously. As part of the company's rotational policy, Chawla was earlier responsible for driving the domestic and international watch business before moving on to handle new businesses including Fragrances and Indian Ethnic Women's Wear. Subsequently, he took charge of the jewellery division in 2019, the very year that Venkataraman became MD & CEO. All of it is a part of the well-honed process of placing the best of the company's next generation of leaders in critical positions to gauge their strengths and weaknesses. With sales and profits of the jewellery division growing 2.5 times under his watch, Chawla earned his recent appointment.
In the process of grooming him for the top job, the company also built bench strength in the form of other contenders like Suparna Mitra, head of watches and wearables, and Saumen Bhaumik, who heads the eyewear business.
Contingency theory tells us that leadership must fit the moment, and Titan's choices reflect this. Desai built, Bhat diversified and Venkataraman scaled. Chawla will be tested not just to carry this legacy forward but to leave his own footprint. At 58, he will have just 6-7 years at the most to leave his mark before he reaches the Tata Group's superannuation age.
Titan's stability at the top breeds confidence not just for shareholders, who've reaped stellar returns, but for a workforce that knows the ship won't lurch with every storm. It isn't surprising that the company is consistently rated as a top performer among Indian companies with a CAGR of 35% over the last 20 years.
Starting out as a watchmaker, it is now a titan of jewellery, eyewear, and wearables, having navigated challenges that would've sunk lesser firms. The 1998, European misadventure could've been fatal; yet Bhat's steady hand—and the board's faith in him—saw Titan through.
In a world obsessed with disruption, Titan's story is a reminder that foresight and planning can be real game changers. Its succession planning, rooted in nurturing talent and aligning leaders with strategy, offers a blueprint for other companies. As Chawla prepares to take over, Titan isn't just passing on the baton, it's showing the world how to run a relay race that never falters.
The Company Outsider newsletter will be on a temporary break as the author is on leave until 18 June.