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Can success continue without succession?

BusinessWorld logo BusinessWorld 3/20/2017

While the few monarchies that are still around have a defined succession plan decreed and accepted by the populace, companies seldom pay attention to who will take over from an aging leader. Only consultants and maybe minority shareholders seem to be bringing up the subject of the seasons (ah, the leaves are changing colors) if only to obliquely hint at the next cycle.

The more successful a company is in terms of growth, market share, and profitability, the less concerned it is in looking for a successor to the CEO responsible for the sterling performance. However, when the numbers no longer make the heart beat faster except with dread, the thought of designating an heir apparent overtakes the urgency to keep the present captain to "turn the ship around."

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Designating a specific individual or even a set of candidates erodes the myth that senior executives are uniquely irreplaceable or that any of the possible replacements are ready. The myth of a vacuum after an exit dismisses De Gaulle's reminder that, "the graveyards are full of irreplaceable men."

Grooming the hair may be more urgent in the incumbent CEO's to-do list than grooming a successor. An individual formally designated as the successor raises problems for the incumbent.

A designated CEO-in-waiting tends to be lionized by those investing in his future. He attracts talents, especially new arrivals, who want to be part of the new palace guards. Isn't it then a short step for the successor to push for a timetable for the handover? (Sir, maybe you should stay in your beach resort more often.) Even a distant-sounding time horizon like three years eventually comes around -- is it three years already? How time flies!

The delaying tactic of a ruling king involves an unfinished project -- let me just finish this 11-year plan and then we can sit down and talk about your new role. The successor is portrayed as impatient, over-eager, and simply not ready for the big job. There are core skills he still has to acquire like the ability to talk to snakes and walk through solid walls.

As a management discipline, succession planning seems deemed to be critical only for the successors. If no heir is apparent, everybody is still in the running -- so what's the rush? In each planning session, the facilitator (coached by the second in line) has a last slide on the challenges of the future like disruptive technology, declining demand, and "depth of the bench". It is fine for strategic business unit heads to provide a succession plan for themselves, but does the CEO need to bother with that?

What about the "Red Truck Effect?" This typical American slang is adopted by consultants to add urgency to the succession issue. It refers to the need for a quick replacement if a red truck runs over the leader? It is never explained why the leader is crossing a street full of fire engines -- is there a hint of burning buildings? Sudden collapses should qualify. Why isn't it called the "cardiac effect?"

Even with designated successors, contingent events can make the exercise impractical. The successor may get tired of waiting for his turn and decide to bolt to a competitor leveraging his designation as successor to get a top job elsewhere. Or, a recruit from left field may be promised a shot at the top job. (Your temporary title is Director for Surprises.)

Succession too often disappoints. Two things need to happen for the longed-for event to take place. The incumbent has to leave or be forced out and the other wannabes need to step aside to give the successor a clear path as rivals cheer and pledge undying allegiance to him. And what happens if the successor himself is hit by the red truck? Did somebody push him?

Maybe the search committee should also lay out a role for the soon-to-be-dethroned king. Many companies use the position of chair for this, or if this is already sat on, there is the "emeritus" title which in Latin means "having earned (a position)." Singapore deftly turned over power to the next in line with the title for the retiree of "Mentor Minister."

Succession should be mindful of the feelings of the succeeded who needs his own glide path for landing.

The ending is seldom scripted. A search committee is formed to bring in an outsider. The short-listed candidates are waiting in one room... as celebration breaks out in another part of the building.

A. R. Samson is chair and CEO of Touch DDB.

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