Ways to make the departure of a charismatic leader less painful. Case studies - successes and failures

Appointing a new CEO is a risky business. Statistics cited by the Harvard Business Review show that two out of five CEOs fail within the first year and a half. The situation becomes more complicated if the previous leader is a charismatic and progressive leader like Steve Jobs, Sam Walton, Jack Welch...

Memento mori

“Research shows that 60% of companies do not have a succession plan in place. To some extent, this is explained by a reluctance to accept the very possibility of losing an existing leader,” says Helen Edwards, head of the library at the Skolkovo Moscow School of Management. Dennis Caray, vice president of executive search firm Spencer Stuart, describes in his book CEO Succession several complex scenarios involving the unexpected death of a CEO. For example, the case of Jerry Junkins, CEO of Texas Instruments, who in 1996 saw no need to prepare a succession plan, claiming that he was “healthy as an ox.” A few months later he died of a severe heart attack. That same year, an American trade delegation, including top management of several companies (Asea Brown Bovary, Bechtel group), was involved in a plane crash in Bosnia. Caray talks about crisis planning in these companies, noting that most of them were not prepared for such a turn of events.

McKinsey & Company partner Ruslan Alikhanov is confident that a leader should, from the very beginning, think about the future of the company after his departure. “It’s like writing a will - it’s clear that it’s not very pleasant, but it’s necessary. If you are a truly great person, you cannot succumb to childish egoism and say “everyone will die, but I will stay.”

Succession of power

Choosing a worthy successor is the task of the company’s manager, who must spend many hours communicating with colleagues and evaluating them, Alikhanov believes. When choosing a successor, he advises paying attention to the candidate’s compliance with the company’s value guidelines. “McKinsey founder Marvin Bauer prided himself on building a firm that put clients first. One of Marvin's potential successors said, "We're a business," during a presentation. Marvin, who at that time was already removed from decision-making, jumped up from his seat, ran forward and said: “You are absolutely wrong! We are not a business, we are a professional service. Our clients come first!” That person no longer had a chance to become the next head of the company. It would seem like just two words, but the issue of compliance with the company’s philosophy is very painful, you can’t take risks here.”

Professional training

“It’s important to continually provide potential leaders with opportunities to improve their professionalism,” says Edwards. Xerox CEO Anne Mulcahy began thinking about her followers as soon as she was appointed to the post in 2001. She advises identifying a range of potential candidates and testing them on challenging company- and industry-level assignments. Over time, the list of candidates may be reduced. In 2009, when Mulcahy was ready to leave her post, her chosen officer was able to take office without any fuss or worry.

Experience exchange

If there is such an opportunity, it is better for the new management of the company to maintain contact with the previous leader. Then, if necessary, it will be possible to seek recommendations, Alikhanov believes. “McKinsey at one time even had a website called “What Would Marvin Do?” When complex issues were being resolved, one could consult and turn to his principles. Companies really lack this opportunity after the departure of a charismatic leader.”

Course Bookmark

“The departure of a leader is a point of change of course. For some time, the company can move by inertia, fulfilling the plans laid down by previous managers. The difficulty arises when you need to declare a new agenda, says Alikhanov. — The new leader has no more than 100 days to do this. During this time, he must declare his position, whatever it may be: continuing the old course or choosing a new direction. People need to hear and understand that the transition period is over, they have a leader with their own voice and their own vision for the future of the company.”

How to change a leader in a company