Why Boards Must be Savvy About Succession
Replacing beloved CEOs is risky
As 2023 gets under way, newly reinstalled Disney CEO Bob Iger is navigating his proverbial “first 100 days” for the second time — although this time he’s limited to a two-year term. Starbucks will soon welcome a new CEO taking the reins from founder Howard Schultz, who’s on his fourth attempt at succession. These are the most recent vivid reminders that not only are succession setbacks common, but also that transitions from “iconic” CEOs are often the riskiest.
The companies that have experienced these painful predicaments read like the “who’s who” of business. Disney, Starbucks, P&G, Microsoft, GE, Ford, Twitter, Dell, Nike, and scores of other marquee companies in their prime have stumbled painfully in CEO transitions.
And we may see more stumbles to come: Our research shows that almost a quarter of Fortune 200 companies are led by CEOs who’ve been in place for a decade or longer. Ten of these companies are headed by founders, adding further complexity and risks to succession.
Please select this link to read the complete article from Harvard Business Review.