Why Building a Leadership Pipeline Can’t Wait? Arijay Prasad | Associate Partner | Sapphire Human Capital

Most leadership teams in India can name, inside a minute, the two or three people whose departure would cost the business a year. Naming their replacements takes considerably longer, and often enough the conversation closes without a name at all. The distance between those two lists is where succession planning in corporate India actually sits, some way behind where boards believe it to be.

That gap is becoming expensive to carry. Business cycles have shortened, promoter-led companies are working through generational handovers, and leaders are being asked to run organisations in conditions that have no precedent in their own careers. Demand for leadership that is ready on the day has risen sharply, while the machinery that produces it has barely changed in two decades.

Good intentions, thin benches

The encouraging news first. Deloitte India’s Talent Readiness Study 2025-26, covering 156 organisations across manufacturing, services and life sciences, found that 78 per cent now run formal succession management frameworks, up from 72 percent the year before. Boards are asking the question. Committees are meeting, and there are policies in place.

What sits underneath is a less comfortable truth. Only 9 per cent of those organisations use AI in succession planning, and about three quarters make minimal use of data in talent decisions. So in most companies the person marked as next in line still gets there the way such people always have in India. Visibility. Proximity to the promoter or the chief executive. A feeling in the room that they seem ready. That instinct is often right, and it’s still a thin thing to bet a business on.

The readiness picture globally says much the same. DDI’s Global Leadership Forecast 2025 found that just 20 per cent of HR leaders believe they have people genuinely ready for their most critical roles, even though 75 per cent would rather promote from within than go outside. Most organisations want to develop their own leaders. Most are not currently in a position to.

The board already owns this problem

There is an added wrinkle in India, which is that none of these steps is optional. Regulation 17(4) of the SEBI Listing Obligations and Disclosure Requirements Regulations ask the board of every listed company to satisfy itself that plans are in place for orderly succession to the board and to senior management. That has been law since 2015. The nomination and remuneration committee carries out the related job of working out what a role actually demands before anybody starts putting names forward.

In practice, most boards deal with this issue once a year. A policy goes up on the website, a slide gets shown, and the meeting moves on. Anyone who has sat through that twenty minutes knows the difference between reviewing a succession plan and genuinely stress testing one. The second conversation asks whether the people on that chart could run the company the organisation is trying to become. That is a very different question from whether they could do their boss’s current job.

What it costs, and what tends to work

Skip that second conversation, and the bill turns up later. When a critical role opens with nobody ready, the spending starts straight away. Good leaders are rarely looking, so they have to be persuaded, and persuasion carries a premium. Two or three quarters go by before the new person is properly productive. There is cultural risk that nobody can price honestly. And there is the quieter loss that follows, the internal candidate who was passed over, read the signal correctly, and resigned before the year was out.

The business waits through all of it. Interim leaders keep things running and seldom make the hard calls, because holding a role is not the same as owning it. A year of that drift never shows up in an annual report. Competitors notice it anyway.

Resolving the issue needs an earlier start far more than a bigger budget. Profile roles against where the business is heading, not against whoever occupies the chair today. Give identified successors real profit and loss responsibility rather than a stretch project, board exposure that has not been sanitised first, and one assignment where getting it wrong would not end a career. Judgement does not transfer in a classroom. It gets built by carrying something heavy and being allowed to put it down badly once.

Look outward as well as inward. A bench that seems strong against internal peers can look ordinary against the market, and organisations usually discover this mid-search, when the internal favourite finishes fourth. Knowing where comparable leaders sit and what capability rivals are quietly assembling keeps a succession plan honest.
Then measure the right thing. Counting how many roles have a named successor reveals very little. What matters is how those leaders are performing three years on, whether they have grown further, and whether they stayed. Development that stops with the appointment letter was never really development.

The awkward part is timing. Pipelines are built in the quiet years and tested in the loud ones, and no organisation has ever felt it had spare capacity during the quiet ones. Those that build anyway tend to look remarkably agile later, though the agility was bought years earlier, when nothing appeared to be wrong. The right leader in the right seat changes what a company is capable of. Worth starting well before the seat falls empty.