Page 68 - Global Focus, Issue 2, 2018

EFMD Global Focus_Iss.2 Vol.12
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2. A planned succession tends to preserve 4. Good candidates emerge naturally
the organisation’s stability. Abrupt successions Executives should prepare their successors
tend to foster instability through a series of increasingly difficult challenges;
In 2015, the world’s 100 best-performing in other words, at each stage, the potential
presidents occupied their positions for 16 years on successor is challenged to take new responsibilities,
average. This fact contradicts other evidence that always supported by his or her leader.
between the years 2000 and 2010, the average Visualise a whale challenged to cross an
time CEOs remained as head of the 500 largest increasingly thicker ice barrier to reach the
companies listed by Fortune Magazine fell from 9.5 surface of the water. When it becomes capable
to 3.5 years. of breaking the thickest layer, then it is ready
Each succession process shows its own for leading in the ocean. New leaders are not
dynamics and is associated, among other things, chosen or elected. Just like whales, they should
with the character of each individual organisation, emerge.
its origins, history and segment of operation 5. Replacing a founder-president is more 16yr
as well as with the economic scenario and the
current stage the organisation is going through. complex than replacing an executive president
It is also recommendable that organisations It is evident that founders of organisations In 2015, the world’s 100
best-performing presidents
prepare themselves for “emergency successions”. tend to regard their enterprises as the work of occupied their positions for
Top executives may quickly and unexpectedly their lives, representing a desire for immortality. 16 years on average...
quit an organisation in search of career This quasi-fusion of creator and creature leads
opportunities or for family reasons. Examples to a succession process that differs from that
of replacing an executive who has been in office
of serious illnesses or even deaths that had for some time alongside existing an enterprise. 3.5yr
great impact on the succession processes of
organisations are not rare, especially involving CEOs. Even if the executive is committed to the
Studies have shown that abrupt successions dream of perpetuity, his or her main focus will ...this fact contradicts
other evidence that between
are associated with an 18% drop in the operating be on the results of his or her term. This means the years 2000 and 2010,
profits of organisations in the year subsequent to that the relationship of this executive with the the average time CEOs
succession. The drop in performance may be even enterprise tends not to be that of families in the remained as head of the
500 largest companies
greater, depending on the time it takes to definitely case of founders, thus rendering the succession listed by Fortune Magazine
replace the CEO. process more rational. fell from 9.5 to 3.5 years
All this evidence demonstrates that the lack of
preparation for succession, especially emergency 6. The leader triggers succession at the
A founder creates an organisation but 18%
successions, is harmful to the performance and peak of the career
the survival of organisations.
may, under certain circumstances, lead it to
3.The design of a future profile for the destruction. Some pioneers seem worried about Studies have shown that
abrupt successions are
organisation favours the definition of how frequently this deviation – characterised by associated with an 18%
the ideal profiles of successors a creator’s strong attachment to leadership and drop in the operating profits
Substitution should not be mistaken for consequent reluctance in relinquishing control of organisations in the year
subsequent to succession
succession. It is wrong to believe that the – occurs.
successor must be akin to or assume a “position” An extended term ahead of operations when
occupied by his or her predecessor. Circumstances physical and intellectual vigour is lacking
change as the environment is constantly changing. causes deterioration – sometimes irreversible
New technologies, regulations and competitors – of an organisation’s rhythm. The conscious
compel companies to design their futures and leader, on the other hand, triggers his or her
reflect on their own identities, asking themselves substitution when at the peak of their career,
“what do we want to be in the future?” assuming a more strategic role that interferes
Such considerations may suggest a different less with the operation, even, when possible,
future profile for an organisation, recommending quitting the organisation. For a substantial
the selection of successors that fit this new profile. fraction of the researched organisations, the
Therefore, strategic reflection on the evolution of establishment of an age limit for presidents,
the organisation may be a very useful practice be they founders or executives, has made
when choosing a successor. succession processes easier.
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