CEO’s on lease

CEO’s on lease – Latest trend among India Inc?

CEOs are very integral to any organization, infact the buck stops at them! Whether it is steering their company through a very difficult phase or growing it organically / inorganically, they are at the forefront of decisions which affect an organization in various ways. On the other hand when the organization is in the dumps, the CEO is the first to get the blame for all that is wrong. Vikram Pandit had to reduce his salary to $1 when Citibank was in total distress. Eric Schmidt was taken on board as the CEO when the Google founders realised that the need professional hands.

What’s the concept of a CEO on lease?

These days a “CEO on lease” concept has suddenly started gaining traction in the country. Various HR consultancies such as Ma Foi, Hewitt Associates, Adecco, Manpower etc. have various people on their payrolls who work as CEOs for various firms. These people may be senior level executives, retired professionals, senior management who maybe working in the best of the companies.

So what’s the point of taking a CEO on lease?

With the growth of many small and medium sized companies in the country over the years and also the entry of various international players across sectors, the industrial sector has greatly benefited. But many of them face a number of challenges in setting up their businesses, managing through the various approvals from ministries, deciding the finances, marketing and HR policies.

This is why CEO’s on lease come into the picture – Since these companies may not be able to afford a full time CEO with good experience and expertise or may take a lot of time in finding a new one, they may go for this route. And therefore they would contact an HR consultancy and get a CEO on board for around 6-12 months. Once the company has been set up and running, the CEO on lease goes back to the consultancy in search of opportunities for another organization.

So what are the benefits of a CEO on lease?

It is a great career jump for people who may generally not rise so high up the ladder in such a small period of time. Such a position entails them to a lucrative and highly challenging role with a salary package of about Rs 30-60 lakhs.

One can consider an example of German firm TFL who bought over an Indian company to enter India. The person invited to be the CEO temporarily helped the company get the necessary approvals, provide the necessary guidance for the Indian market and also helped in setting structures and the people management models for the company. The fact that he was later hired as the chairman of TFL Quinn India is another benefit which would have happened obviously because they were happy with his role.

CEOs on lease seems to be the in – thing these days! Are you planning to join the bandwagon?