A changing of the guard
Jim Abrahamson?s recent appointment to CEO at Interstate Hotels & Resorts
is a solid step in the succession planning process at Interstate. The last time Tom Hewitt tried to retire there was no real leader ready to take over. Hewitt has done a great job of leading the company through public and private ownership. His stewardship has been admirable. But my interest always gravitates to succession and leadership when CEOs are nearing retirement age.
When is the right time to plan for succession, and how public should these decisions become? Some leaders such as Warren Buffett have no intention of retiring and believe succession is a private matter. Others believe that it is a clear responsibility of a CEO/board to have a successor named well in advance. I can tell you from personal experience that this is one of the most sensitive and difficult issues facing organizations. Personality, power, self-worth, money, control, rivalry and many other issues come to the forefront of the succession decision.
It is so easy to move this debate to the backburner for fear of alienating almost everyone involved in the process. It is inevitable that feelings will get hurt and relationships will forever change. My advice to those facing the succession question:
- Make it a standing agenda item at strategic planning/board meetings.
- Start with the strategy. Make sure the right leaders are in place to execute the desired strategy.
- Have a process for determining the prospects and start grooming two to three years ahead of a planned decision.
- Set criteria for future success and match candidates against that criteria.
- Ask for input from the outgoing CEO, but do not leave the decision to him or her alone.
- Have a system for spotting and nurturing future leaders. Start early.
- Always have a contingency plan for unforeseen circumstances.
If you can follow these recommendations, you will be ahead of 80% of all the companies in the Fortune 500 list. That is how acute the problem is when it comes to succession. I wish Abrahamson, Hewitt and Interstate well in what will be an interesting changing of the guard.