Revisiting the importance of CEO succession planning
In a recent announcement Steve Jobs said that he is stepping down as CEO of Apple and has asked to be appointed chairman of the Board of Directors. He had signaled that this decision was likely coming earlier this year (January, 2011) when he took a leave of absence as Chief Executive.
At that time, we used his announcement as a reason to discuss both the importance of and methods for effective CEO (or other key executive) succession planning in an article in the January 2011 edition of the Corner Office Gazette E-Notes entitled: “Will Your CEO Be In Tomorrow Morning?” If you did not have an opportunity to read it at the time, a link to the January Corner Office Gazette follows [click here].
One of the questions that will always arise regarding succession planning and its value is: How will we know we have succeeded? In our January 2011 article we outlined a number of constituencies that are served by (benefit from) effective succession planning. These are:
- The executive team
- The broader group of employees; and
If I was a member of Apple’s Board, how would I know we had done a good job of succession planning? I would start (and stop) by looking at the sustained and rising value of the company (as measured by stock price). For even in the face of the recent market correction, Apple’s market value has shown great and continuing strength. I suggest the Apple Board take comfort in the market’s confident response to the handling of this year-long transition to a new CEO.
In truth, no one can replace Steve Jobs. He has was one of handful of people who created an industry (and Apple in the process), and the only one who continued to be able to reinvent his business (again and again) to avoid a slide down the slope to a commodity statue with its corresponding loss of profit and market value.
We hope Steve Jobs goes on to find the time and energy to invent yet another industry and company or two. Good Luck.