30 SEC­OND GUIDE TO ... SUC­CES­SION

Daily Mail - - City & Finance -

Seam­less tran­si­tion?

That’s the idea. All com­pa­nies are sup­posed to de­vote at­ten­tion to suc­ces­sion plan­ning – think­ing ahead as to who may take key roles when di­rec­tors move to pas­tures new and draw­ing up lists as to who from within the com­pany and out­side could fill the gaps.

The re­al­ity

Very few firms have proper plans in place. The res­ig­na­tion of ex­ec­u­tives nor­mally leaves the rest of the board scrab­bling around for ideas and spend­ing a for­tune on head­hunters. In­ter­nal con­tenders of­ten have to wait months to find out whether they’ll get the pro­mo­tion, while re­cruit­ment firms in­ter­view a raft of can­di­dates in an at­tempt to show they are earn­ing their fees.

Muck­ing it up

Pit­ting in­ter­nal can­di­dates against each other is of­ten the worst of both worlds, lead­ing to in­fight­ing and re­sent­ment. Glax­oSmithK­line’s X-fac­tor style con­test led to two of the three con­tenders walk­ing out in a huff af­ter An­drew Witty was anointed to suc­ceed JP Garnier. At Marks & Spencer, Sir Stu­art Rose got the hopes up of sev­eral of his ju­niors, only to bring in Marc Bol­land and see fi­nance di­rec­tor Ian Dyson hot­foot it out of the door.

The right way

Tesco lined up a suc­ces­sor to Sir Terry Leahy ahead of an­nounc­ing his de­par­ture to the stock mar­kets, min­imis­ing in­vestor un­cer­tainty and in­ter­nal dis­rup­tion. A few noses may be put out of joint, but bet­ter to know now rather than later.

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