Apollo Hospitals Define Third Generation Management Structure

Apollo Hospitals, India's largest healthcare chain has roped in external consultants to frame rules and functions for members in the top management team.

"The purpose is there will be no ambiguity about who gets what. I think we won't have to worry about who is going to fight for what," managing director Suneeta Reddy said in an interview.

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Last year, founder-chairman Prathap C Reddy, 83, prompted the company's first succession round with definite paths for his four daughters. His eldest, Preetha Reddy, 57, was most likely to succeed him. The organisation re-designated Preetha and Shobana Kamineni as executive vice-chairpersons, Suneeta Reddy, the second-eldest, as managing director, and Sangita Reddy, the youngest, as joint MD.

"They have all come to a stage where their future at Apollo has to be defined. It is important for us to groom them in the Apollo way and give them a path ahead", Suneeta Reddy said. "The other purpose this will serve is the investors and shareholders in Apollo to have a clear view of the management structure. This will build trust."

The company's management also broke down the global CEO position into four smaller ones last year. "You cannot have one person responsible for clinical outcomes, doctor recruitment, revenue and so many functions. We want to make sure these investments do well, and the current structure is the right fit," she said.

Arvind Singhal, Chairman, Technopak Advisors, a management consultancy that has both family-run business and board-oriented firms as clients, said many businesses of the 60s and 70s went down because they did not have internal family charters. "Without guiding principles, the siblings tend to fight bitterly over which direction the company is headed."

Singhal said, “Family constitutions such as the one Apollo is drafting help avoid disputes to a large extent, but these may not hold good for generations as dynamic business environments may call for periodic reviews in the constitution.”