How to let your CEO leave like Bill Gates
In a corporate world, having good leadership succession planning is what makes companies outlive their competitors. According to this BusinessWeek article, a bad choice on CEO succession can lead to some pretty devastating consequences such as “erosion of stock price, defections of key talent, strategic missteps”.
Findings from the new “Succession Planning Highlight Report” by Institute for Corporate Productivity (i4cp) also showed nearly nine in 10 business professionals say succession planning will be an extremely important or important issue in the future. Three quarters of respondents ranked it among the top five challenges facing them in 2008 and in the future. Yet they are not spending enough time on this issue.
Jay Jamrog, i4cp’s vice president of research, said it’s important to have the discussion, even informally at first. Long term talks on setting a formal succession plan can follow after.
Another flaw in the current CEO succession planning by most companies is that they do not carry out sufficient research and objective evaluation against criteria for their candidates. Without a more rigorous research diligence on the candidates’ leadership and strategic capabilities before making last CEO succession call, the choice may be doomed to fail, like Palin.
Utilising the role of chief operating officer (COO) as a final testing ground for the CEO-in-waiting can also help ease the transition period and to ensure the top candidate really is the right choice for CEOship. The BusinessWeek article suggests “assigning specific organisation-wide initiatives to the COO” and “transitioning responsibilities between the CEO and COO in 6-month increments”. This would allow shareholders to see how the top candidate operates in an increased capacity for the company.
Furthermore, if the candidate disappoints, it is an escape clause for the board to pull the plug.
Finally, when the CEO is ready to step down, reassured that his heir apparent is ready to take the business to its next profitable level, he can spend his last day in office, just like how former Microsoft CEO Bill Gates did.
Watch on to find out.
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