| The downfall of many countries and political leaders | | | | good succession planning too. Heestablished at least |
| are attributable to poor leadershipsuccession. | | | | four people who could run the company after he |
| Yugoslavia plunged into civil war with the demise of | | | | decided not to run itany more, and behind them are |
| President Tito in 1980. | | | | ten people who could fill their jobs. The Economist, |
| Till then, he was all-powerful and had no intention of | | | | October 25, 1997 reported: " Roberto Goizueta will |
| passing control to anybody. | | | | clearly be mourned at Coca-cola, thecompany he |
| Former President Suharto tried to perpetuate his | | | | headed, but he might not be missed. Strangely |
| powers too by surrounding himself withweak | | | | enough, that would be one ofthe greatest |
| subordinates. This brought about his downfall and the | | | | compliments a departed chief executive could |
| economic disaster in | | | | receive." |
| Indonesia when the Asian economic crisis hit in 1997. | | | | One of the driving factors behind GE's success is |
| Similarly, many once successful companies have failed | | | | succession planning. If it were not for |
| because of poor successionplanning. Many | | | | GE's rigorous succession planning, Jack Welch might |
| entrepreneurs want their children to succeed them | | | | have never become GE's eighth |
| and take over thereins in their businesses. However, | | | | CEO. Both Reg Jones (GE's seventh CEO) and Jack |
| their offspring may not be the best people to | | | | Welch started searching for theirsuccessors six years |
| takeover from them. In the long run, it is more | | | | prior to their retirement and the board played an |
| beneficial to the company, the entrepreneur,and his | | | | important role in theprocess. In November 2000, |
| children to employ the best professional manager or | | | | Welch finally named his successor, Jeff Immelt, the |
| managers from outside to runthe business. Hence, | | | | head of |
| there is a saying: "The first generation builds the | | | | GE Medical Systems, who took over in September |
| business, thesecond generation enjoys the prosperity | | | | 2001. |
| and growth, the third generation brings about | | | | As a corollary to cloning your successes, one should |
| thedownfall." | | | | not create clones of yourself. Theproblem with some |
| There is a moral obligation to create a successful | | | | companies is that the CEO denies that somebody |
| next generation. As the | | | | who is like himselfor herself to take over. If it is |
| Chinese proverb says: "If you want happiness for a | | | | more of the same, then there is no renewal |
| lifetime - help the next generation." | | | | andtransformation. |
| There is a fear and spirit of insecurity among some | | | | Welch said that Immelt should not do what he did |
| managers if their subordinates arebetter than they | | | | but take the opportunity to reinvent thecompany, as |
| are. Such subordinates are deemed as threats, | | | | Welch did when he became CEO. Months before his |
| capable of rendering themredundant and eventually | | | | retirement, Welchsuggested that the role of his |
| taking over their jobs in time to come. As a result, | | | | successors would not be to blindly follow in his |
| we often seemanagers stifling good subordinates and | | | | footstepsbut to launch new initiatives and take GE to |
| bringing in incompetent ones instead. Toencourage | | | | the next level: "My successor knows that hisjob is |
| succession planning, companies should introduce the | | | | not to do what I did, but to take what I did as a |
| policy that one is notpromotable if one does not | | | | launch pad to whole new ideas, newthings...it is his |
| have a capable successor to take over one's existing | | | | game." |
| portfolio. | | | | Therefore, always remind your staff and yourself not |
| Succession planning should also become an important | | | | to be fearful of working yourselvesout of a job. |
| part of the company's performanceappraisal | | | | There is always a better job waiting for you once |
| measurement. | | | | you have done yourpresent job well. |
| The late Roberto Goizuetta of Coca-Cola had very | | | | |