Before Apple Inc. (IW 500/9) founder Steve Jobs died last year, he handpicked Tim Cook to be his successor as CEO. The move renewed discussions in business circles regarding the importance of succession planning. Judging by Apple’s performance since Jobs’ departure, it appears the IW 50 Best U.S. Manufacturer had a well-established plan in place.
Most companies hope for a similarly seamless transition. So how do they get there?
Companies should begin the succession-planning process three to five years in advance, according to a report published in July by HR consulting firm Mercer LLC. Ideally, a succession-planning program should be a multiphase approach led by the CEO. Two of Mercer’s five key steps include the development of succession candidates and then a “pressure-test” of the prospective leaders.
Dan Hendrix, CEO and chairman of Atlanta-based $1.1 billion textile manufacturer Interface Inc., recalls that his road to the top began in 1983 under the tutelage of the company’s founder, Ray Anderson. Two years after he joined the company, Hendrix, at just 30 years old, became the company’s CFO. “Ray gave me a lot of responsibility at a pretty young age,” Hendrix recalls.
Creating opportunities for top performers is a key part of the succession-planning process, says Patrick Sweeney, president of human-capital management company Caliper Corp. “Let them take the wheel,” Sweeney says. “Do they see a process that needs to be improved? Let them do it for you; they’ll broaden their expertise within the company, grow as a professional, and the company can reap the benefits of their innovation.”
