Change of guard at Reliance – A lesson in having a successful succession plan

Dhirubhai Ambani was a great visionary and a doyen of the industry, known for many firsts and who really revolutionised the industrial growth in our country. But when it came to succession planning, he took some time and that really put Reliance in turmoil following his demise. Since there was no clearly documented succession plan, Dhirubhai Ambani’s sons, Mukesh and Anil, were involved in a bitter struggle for control of the Reliance empire, and the turmoil could finally end only when the Supreme Court intervened.

Transferring leadership responsibilities in a family-controlled business will always have many challenges, but if there is careful planning done at an early stage, the transition can be a smooth one for continuity of growth and success.

In the past we have seen big business groups where the succession plan has been smooth. Some time back we saw Venu Srinivasan of TVS Group gradually inducting his son and daughter to take on more responsible roles in the company. Harsh Goenka’s son Anant Goenka is already at the helm of the affairs at CEAT Tyres, part of the RPG Group. Thus, having a succession plan in place early on will always help in building confidence with the new young scions and giving sufficient time for them to settle in and deliver results.

A well-planned succession strategy will also help in presenting the right picture both within the organisation and to the external stakeholders, as well as avert any leadership crisis in the long run. A very well thought out strategic plan can provide immense stability to the family business management without any challenges and tensions during the passing of the baton to the next generation family members. Continuity is critical for the legacy of the family-owned enterprise, as well as supporting business growth and in keeping employee confidence buoyant.

This success plan can now be seen in motion at India’s biggest business house, Reliance. Earlier this week, Mukesh Ambani stepped down as Director of Reliance Jio. His elder son, Akash Ambani, has been named Chairman. At 64, it is not yet retirement time for Mukesh Ambani. But he has started the succession process early enough for his son Akash to emerge as a strong business leader and be mentored by the best. Meanwhile, Mukesh Ambani will continue to helm Jio Platforms.

There are also news reports on Mukesh Ambani planning to give charge of Reliance Retail to his daughter and Akash’s twin sister, Isha. She is involved with retail part of the business, where she engineered the launch of fashion portal Ajio.

Both Akash and Isha have already been inducted into the Board of Jio Platforms, the holding company for Reliance’s telecom and digital assets, and have been a part of at the conglomerate’s numerous product launches. Its strategic investment deals with companies like Facebook, Google and Intel were negotiated by the duo. The mentoring, training and business exposure has already begun and it is only a matter of time that we will soon hear more of Akash and Isha as they will hold the fort at India’s largest conglomerate.

Akash Ambani, a graduate in Economics from Brown University, has already proven his mettle successfully handling IPL franchise team Mumbai Indians along with his mother, Nita Ambani. He was involved in fortifying Jio’s 4G foray as well in the making of the Jio Phone. He has also been involved in Reliance Retail’s offline and online ventures.

Meanwhile, Mukesh Ambani’s youngest son, Anant, is on the board of solar companies that were incorporated as part of Reliance’s green energy initiatives. The company is investing $10 billion over the next three years in green energy.

Undoubtedly, the three Reliance scions have a formidable DNA in running a large business empire and will help steer the conglomerate into newer heights.