Steve Jobs's Departure Puts Spotlight on Succession Planning

Aug. 31, 2011
Top-performing companies make succession planning part of their core strategy, says executive consultant.

When Steve Jobs resigned as Apple Inc. CEO last week, the iconic leader and innovator left behind a legacy that would seem difficult, if not impossible to replace.

But John Challenger, CEO of executive outplacement firm Challenger, Gray & Christmas, says Apple's ability to attract top-notch talent and groom next-generation leaders should benefit the company moving forward. Tim Cook, who served as Apple's COO, took over Jobs' position.

Here's what Challenger has to say about Jobs's departure and lessons learned about succession planning:

IW: Do you think Apple will fall victim to some same mistakes other companies have made when iconic leaders depart?

JC: It's very difficult when you have a very creative leader at the top -- a genius -- you can't train for that. Certainly, he (Jobs) may go down in history as the most brilliant corporate company leader of the century, so it's hard for anyone to follow in someone's shoes like that.

But this company has had a long time since this illness was announced, so it has not taken anyone by surprise. As a result, they've had a chance to build up their leadership around him, and all the major functions of the company to build backups behind those people.

And remember, Apple, because of its extraordinary success, can attract the best and the brightest. Everyone wants to work there. And so it's a peculiar situation. It feels like you have Picasso here. You can't find another Picasso, but certainly because of their extraordinary success they have been able to attract the best and the brightest.

IW: What are some characteristics of a good succession-planning program?

JC: Companies that take the time to prepare and do work on succession planning and leadership development as part of their core strategy -- so they do it all the time -- are in a much stronger position to weather changes in leadership.

That's because they have people in place behind their leaders who can step in. They've identified those people; they're working at giving them a broader experience and more training and knowledge, and they're providing executive coaching to them on an ongoing basis. So good companies work on it day in and day out as part of their core strategy.

IW: What type of companies fail at succession-planning programs?

JC: The companies that have not taken the time to ask and work with their managers and executives to make sure that they have backups in place. In other words, people who could take their job when they leave.

Companies that don't work on succession planning and employee development run the risk of being caught unawares and many companies have been. These companies find that when something happens to their leader, there's a void when he leaves.

IW: What can employees expect during these types of management changes?

JC: When a new executive comes in, politics change. Not bad politics, but the relationships change. They have to start anew. That means the people have a new chance to prove themselves. People who have been close to the leader who may not have had performance that matched the quality of the relationship are more exposed.

Often new managers underneath the leader get put into place and make their own changes. So it can really reverberate through the organization when a new leader comes in, and sometimes continuity is crucial and sometimes changing it up is crucial to the success of that new CEO. It depends on the situation.

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