Putting the ‘Success’ Back into Succession
Last month, Rupert Murdoch, the 92-year-old media mogul, revealed that he is stepping down as chairman of Fox Corporation and News Corp. and that his 52-year-old son Lachlan will succeed him. This news comes as no surprise, as Lachlan has been groomed for the role for many years. But as we have seen in recent years, there are no guarantees that a successful handover will take place.
As one of three Murdoch children involved in “the family business” Lachlan now faces a complex situation, similar to the one depicted in the hit TV show Succession, which is inspired by the Murdoch family. The show follows the Roy family, owners of a massive media conglomerate, as they vie for control of the company after their father, Logan Roy, steps down as CEO.
While Succession is a fictional show, it does bring some interesting things to light about the underbelly of passing the leadership torch. For example, the show highlights the often dysfunctional family dynamics in succession planning, the challenges of identifying and developing the next generation of leaders, and the potential for conflict and power struggles.
Of course, succession planning doesn’t have to be as dramatic as it is on Succession. It is a necessary process that all businesses undergo at some point, regardless of size or industry. After all, no leader can stay in power forever… right?
In this article, we’ll look at some real-world succession examples (both good and bad) and highlight a few essential keys to putting “success” back into succession planning.
Learning from Real-World Succession Planning Scenarios
While each company’s approach to succession planning is unique, learning from those who’ve experienced transition can be helpful. We can learn valuable insights from those who navigated the transition well, as well as pitfalls to avoid from companies that went awry.
Apple is a company that has been celebrated for the successful transition from visionary founder Steve Jobs to current CEO Tim Cook. Cook joined Apple in 1998 as senior vice president of worldwide operations. He was later promoted to executive vice president of worldwide sales and operations before eventually being named as Jobs’ successor in 2011. Cook’s succession to CEO of Apple was a success for a number of reasons. First, he had a deep understanding of the company’s operations and culture. He was also a respected leader within the company who was determined to preserve Apple’s culture and its values. While he was still involved at Apple, Jobs had been grooming Cook for the role for many years, and he had complete confidence in Cook’s abilities. All of these factors led to the successful transition and subsequent success we’ve witnessed.
Blackberry, another technology company, experienced the exact opposite results when Thorsten Heins succeeded Jim Balsillie and Mike Lazaridis as CEO of BlackBerry in January 2012. However, Heins’ tenure as CEO was ultimately unsuccessful. BlackBerry’s market share continued to decline under his leadership. A year after Heins stepped in as CEO, the company announced an operating loss of $995 million along with plans to terminate 4,500 jobs. During his tenure, Heins was also criticized for his lack of vision and his failure to adapt to the changing smartphone market. In fact, the fallout was so bad that they made a film, subtitled “A Cautionary Tale”, about it.
How to Create a Successful Succession Plan
While most succession planning stories come from major corporations, it is equally important for mid-size businesses and less well-known corporations to prepare for leadership transitions. Here are a few essential keys to creating a successful succession plan:
1. Start early by cultivating a pipeline of talent.
Companies need to think about succession planning before unexpected changes start to happen. One of the best ways to do this is by developing a pipeline of talent, even if you do not have leadership needs to fill at the moment. Investing in leadership development can be beneficial when it comes to filling any possible vacancy, from department directors to CEOs.
However, it takes time to develop high-potential leaders. Recognizing this makes it easy to understand why Timothy Cook told Buzzfeed News, “My role as CEO is to prepare as many people as I can to be CEO.”
2. Develop an intentional approach to assessing your personnel and recognizing new potential leaders.
Succession planning often involves identifying and developing current employees to fill key leadership positions when they become vacant. That’s why regularly assessing internal talent is vital to ensure that your organization has a strong pipeline of leaders who are aligned with its current and future needs.
Taking this approach requires a comprehensive evaluation of potential leaders to identify their strengths, weaknesses, and areas for development. This could include performance reviews, 360-degree feedback, and leadership assessments. It’s also important to develop a systematic approach that allows you to uncover any emerging high-potential leaders who may not have been recognized during the initial evaluation.
3. Ensure new leaders are well-prepared for the challenges of their future role by taking time to develop them.
I’ve worked alongside companies who’ve taken various approaches to hiring a new leader throughout my career. In every case, I’ve seen that taking time to develop the new leader is one of the most important aspects of succession.
Also – Don’t wait until a crisis to test whether an employee has the right stuff to assume a more advanced role. Ideally, you would want a new leader to start operating in the position before the transition happens. This provides opportunities for you to be there to address “real life” situations with them.
One Final Word of Advice for Succession Planning
Over the years, I’ve found a beneficial paradigm for succession planning: Success depends on many small decisions instead of one large one.
Often, it can seem like everything rises and falls on a single decision. But like baking a cake, leave out one ingredient or mismeasure another, and the result will be noticed.
Overall, learning from succession planning stories and being intentional about thinking through your plan is a valuable way to increase the chances of success for your succession plan. By following these tips, I hope you can learn from the experiences of others and develop a plan tailored to your company’s specific needs.
By Kent Wilson