The Final Commandment: Nurture the next Generation

Summary: Build a business which has multiple generations embedded in it. Train the next gen to be leaders, to understand the time value of money, to bring a disruptive point of view & fresh talent into the business.

[To find out what the Ten Commandments of Indian Entrepreneurship are, please click here: https://marcellus.in/blogs/the-ten-commandments-of-entrepreneurship-in-india/]

“The third and most important principle in career building is that leaders build leaders, with generations of leaders committed to nurturing the next round of leaders. By the time a manager has spent seven to ten years in HUL, there is broad consensus on whether he has top potential, and one or two leaders invest serious time and effort on the employee. Nitin Paranjpe remembers how Keki Dadiseth, then director for detergents, would invite him, a junior brand manager, to be a fly on the wall in meetings with corporate heavyweights. Sanjay Dube, a mid-career recruit, remembers how Shunu Sen, head of marketing, would meet him every two weeks for a mentorship contact. Anuradha Razdan, HR director, says that the abiding principle in leadership development is 70:20:10 – 70 per cent of development is by a leader building a leader on the job, 20 per cent formal coaching interventions by the boss and 10 per cent in the classrooms by external faculty.” – Sitapati, Sudhir. The CEO Factory: Management Lessons from Hindustan Unilever (p. 171). Juggernaut. Kindle Edition.

Disclaimer: Copyrights of the book is exclusively reserved with Author/Publisher of the above book; we do not claim any rights on the same.

In 2017, when my colleagues & I started investing other investors’ money in the Indian market one of the first patterns we noticed was that great companies tended to not only have long serving CEOs, but when their CEOs changed the succession was also smooth (i.e. there was little or no discord or acrimony in the Boardroom at the point of baton being passed from one CEO to the next) and almost always the succession was successful. Titan, Asian Paints, TCS and HDFC Bank, seemed to us, all fit a pattern where over the course of several years considerable thought & effort had been put into getting succession planning right.

In stark contrast, in other companies, Boardroom churn took place every 3-4 years (rather than the ‘once a decade’ demonstrated by the great companies) and was usually accompanied by the disgruntled candidates for the top job resigning after being passed over for the role.

Given the self-evident role of great leaders in delivering share price returns for our clients, we began trying to understand why less than 10% of Indian companies are able to get succession planning right. We soon realised companies which excel in succession planning are usually the same companies which excel at hiring, training and mentoring superior talent and they do so without being the best paymaster in their sector. So, for example, the Tata Group in general and HUL in particular has outstanding talent management programs build over more than a half a century of trial & error. In his entertaining & informative book, Sudhir Sitapati, a former Executive Director, of HUL gives us a peek into ‘The CEO Factory’ that is HUL.

Similar to the time & the effort that the Tata’s and HUL devotes to identifying, training and mentoring the next generation of leaders, some of India’s smaller family owned firms have also cracked the code. In ‘The Unusual Billionaires’ I described succession planning in the Dhingra family over the preceding hundred years:

“The Dhingra brothers have a family history of continuity in the paints business since 1898 when their great-grandfather and grandfather started a paint shop in Amritsar. In the mid- 1960s, they started manufacturing paints under the brand name Rajdoot, and scaled up the business significantly in north India during the 1970s. Thereafter, during the 1980s, the Dhingras established a strong exports platform in the paints industry and became the largest providers of paint to the former Soviet Union. Berger Paints was the perfect fit for the Dhingras, and in 1991, Vijay Mallya sold his controlling stake in Berger Paints to them. The cash flows generated from the Dhingras’ exports to the Soviet Union were eventually used to acquire Berger Paints a few months before the USSR disintegrated…

The Dhingras have been in the paint industry since 1898. Kuldip Singh Dhingra (KSD) and his brother Gurbachan Singh Dhingra (GSD) are the family’s fourth generation associated with the paints industry. The fifth generation, i.e. Rishma Kaur (daughter of KSD) and Kanwardip Dhingra (son of GSD), is also being groomed for the past few years at Berger as part of the firm’s succession planning.” – The Unusual Billionaires, pg 72 & 82

Whilst we realised that succession planning is important and whilst the team at Marcellus put in place processes to ensure that we invest in companies with better mentoring, talent management and succession planning, what we couldn’t nail down for several years is why is it so difficult for companies to get this right. More specifically, most entrepreneurs that we meet want to nurture the next generation, but most aren’t able pull this off.

The IPL team, Chennai Super Kings’ struggle to find a captain to succeed MS Dhoni, helped us to get to the bottom of this puzzle. As many readers would know, MS Dhoni is the most successful captain in the Indian Premier League. Not only has CSK won the title a record five times under his leadership, in the years in which the team did not win the title, they almost always finished in the top 3. The only exceptions to this rule were the two seasons when CSK did not start the season with Dhoni as their captain. The first such season was 2022 when CSK made its first attempt at finding a successor to Dhoni. Ravindra Jadeja, a world class all-rounder and a CSK stalwart of many years, was announced as the captain.

Under Jadeja’s captaincy, CSK won 2 and lost 6 matches. Jadeja stepped down after 8 matches but by then CSK was out of contention for a top 3 place that season. “It was difficult. In T20 cricket, every ball is an event. It is a fast game but for me it was an experience. I could have done better. As a captain, if you are team is not doing well then all the blame always falls on the captaincy. Thinking, bowling changes, fielding chances. Unfortunately, the team was not doing well. If we were winning and everyone was contributing, then it was not rocket science,” Jadeja said in conversation with Chennai teammate Ravichandran Ashwin on the ‘Kutti Stories With Ash’ YouTube show. (Source: https://www.hindustantimes.com/cricket/)

CSK’s second attempt at succession planning came in 2024 when Rituraj Gaikwad was named as the captain of the team. Under Gaikwad’s captaincy in 2024 IPL, CSK won 8 and lost 10 matches, a success rate of 44%. The situation deteriorated further in 2025 as CSK finished at the bottom of the table (with just 4 wins from 14 matches) for the first time in its otherwise illustrious history. To make things worse, in the 2025 IPL, Gaikwad fractured his arm after 5 matches and had to sit out the rest of the season and an ageing Dhoni had to take over the reigns again.

Why is it so hard for CSK to find another successful captain?

The answer I suspect lies in the fact that the ten-week IPL season provides no construct for the round-the-year non-stop mentoring that a young cricketer needs to grow into the shoes of a legendary leader like Dhoni. An aspiring captain can read books on leadership and on cricket captaincy. He can watch videos of the dozens of matches where Dhoni’s leadership was the pivotal factor. He can confer with world class cricket coaches like Stephen Fleming who has been with CSK now for over 15 years.

However, unless a budding leader works with Dhoni through the year for several years it will be close to impossible for him to learn how Dhoni studies & reads the persona of young players in this team, how Dhoni knew that Kedar Jadhav who had never bowled in first class cricket will be a wicket taking bowler in international cricket, how Dhoni knew that a Rohit Sharma who had never opened the batting in domestic cricket would be successful in that role in international cricket, how Dhoni builds trust within a newly formed team, how Dhoni reads the oppositions strengths & weaknesses, how Dhoni knew in the 2010 IPL final that Kieran Pollard of the Mumbai Indians would whack the bowl straight into the hands of the fielder at long-on, how Dhoni keeps a team calm under pressure, how Dhoni knows when to step into give a bowler specific advise and when to step back and let the bowler do his thing, how Dhoni deals with a team after a string of defeats, how Dhoni creates his Plan B long before it is evident that Plan A has failed….

It was easier for Dhoni to groom a young Virat Kohli for the leadership of the national cricket team because of the many months of the year and the many years they spent on the road together between 2008-2014. Whilst Kohli’s style of leadership was very different from Dhoni’s, the legendary batsman acknowledged the debt he owed to Dhoni when – upon hearing of Dhoni’s retirement from international cricket – he said “Mahi will always be my captain”. (Source: https://www.thehindu.com/sport/cricket/you-will-always-be-my-captain-kohli-to-dhoni-one-more-time/)

Extending the CSK analogy to my own career, I have found on-the-job training works well for the young talent I have had the good fortune to work with. At any point in time, I will have a couple of bright, ethical, hardworking youngsters working on projects with me, doing field trips with me, co-authoring books with me and travelling around the world to meet clients with me. Most of these colleagues have gone on to senior positions either in Marcellus or in asset management firms far larger than Marcellus.

In this age of AI and automation, when almost everything about us is in the process of being automated, perhaps the main thing left for leaders to contribute is how we train the next generation to build successful careers, create great teams and nurture outstanding franchises. That’s how we can leave something behind that will outlast all our careers. That’s how we can leave the world a better place than we found it.

Saurabh Mukherjea is the Chief Investment Officer at Marcellus Investment Managers (www.marcellus.in).This material is for informational and educational purposes only and should not be considered as financial, investment, or other professional advice. The inclusion of any book does not imply endorsement or recommendation by the writer or the publisher of this material.