CEO Succession: A Window on How Boards Can Get It Right When Choosing a New Chief Executive

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Summary: Leaders should follow the guidance in this book.
Review: An invaluable guide to this very difficult problem. Ogden, perhaps the world's leading expert in this field, makes a compelling case for deliberate long term planning, tailored to an enterprise's specific needs. His laserlike focus and penetrating analysis seem like a hidden national treasure.

Corporate titans and politicians who would like to be statesmen ought to read this book and heed the lessons offered.

Rating:
Summary: Packed With Knowledge!
Review: Authors Dennis C. Carey and Dayton Ogden present a thorough, insightful guide to choosing a new Chief Executive Officer in this nicely written, concise book. Offering plenty of inside information and real-life corporate examples, the authors explore their ideas without resorting to fluff or to the dry, dull prose that often fills such books. Given their experience helping corporations choose CEOs and other executives, the authors know what they're talking about and understand the tricky issues involved in putting any advice into practice. Their book delivers what it promises, and given that it can be repetitive, it delivers on some of those promises two or three times (but we're quibbling, some of those lessons do bear repeating). We [...] recommend this book to anyone involved in executive succession and recruitment, especially board members (read it now, before you ditch your CEO, not after).


Rating:
Summary: An important book for investors, advisors and leaders.
Review: CEO Succession is a landmark book for anyone thinking seriously about the future of an organization.

When considering the challenge of extending the benefits of a strong Founder or CEO to a future without that individual, CEO succession is an indispensable book.

Articulating enduring principles and practices of succession in a highly engaging tone, Ogden and Carey clearly illustrate why organizations must plan for an uncertain tomorrow.

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Summary: Insightful book for all of our life transitions
Review: CEO Succession is precisely what companies, executives, and their boards need in today's highly volatile environment. By establishing the principles and best practices of succession in a highly readable way, Carey and Ogden provide a compelling roadmap for boards and top executives to follow to ensure that leadership continues unabated into the future.

Rating:
Summary: Long Live the King! The King Is Dead! Long Live the King!
Review: Shareholders naturally assume that boards have succession for the CEO and other top executives all figured out. WRONG! A well kept secret is that many CEOs try to stall in this area, as a way to make themselves more secure.

Even the companies that work in this area can be unprepared. A young CEO may suddenly jump to another company (as Ray Gilmartin did from Becton Dickinson to Merck), die unexpectedly of a heart attack (as Jerry Junkins did at Texas Instruments), or fail to perform to the board's expectations (as has happened to many companies). Couple that with the fact that irresistible forces may mean that the style that worked well in the past won't wash any more, and apparent succession preparation can equal being totally clueless.

The authors are headhunters with Spencer Stuart and share what they learned in interviews during 1996 and 1997 at Met Life, Caterpillar, Hewlett-Packard, Mobil, Continental Grain, SmithKline Beecham, Delta, Mellon Bank, Bestfoods, Foster Wheeler, Hercules, and GTE. They also interspace other examples. One of the difficulties with a book like this is that things don't always turn out as they seem. A lot of praise in the book goes into Coca-Cola's preparation for the unexpected death of Roberto Goizueta. Douglas Ivester is quickly invested, which is where the book ends. But we know that he also was almost as quickly divested as he turned out to be a poor replacement. This replacing CEOs is a tough business. As irresistible forces become stronger and more volatile, replacements will probably occur even more frequently.

The book concludes that 10 key practices are required: Have a strong, involved board; continually expose the top management team to the board; encourage the next generation of CEO prospects to get early experience with outside boards, the media, and the financial community; create an active executive or operating committee so more executives get exposure to an overview of the company, its strategy and issues; do succession planning on an on-going, real-time basis; take as much human drama out of the process as possible (it's especially hard on number twos); tie some of the CEO's compensation to succession planning and progress; have the directors be paid in stock and make additional investments in the company's shares; calibrate the internal candidates with external ones; and develop a culture that encourages succession (a la Built to Last).

So much for the summary. Here are the problems. Although this book purports to be a best practice book, it does not investigate enough companies to succeed. This is actually a limited survey of practices, with picking out some that seem to work better. To be accurate, such a survey would have had to consider in equivalent detail at least 400 companies. A handful won't cut it.

Second, they have to measure of success in succession. They obviously like some better than others. Without some success measure, you cannot pick out best practices.

Third, the book plugs a service that appears to be from Spencer Stuart in callibrating internal and external candidates. To me, that made the book read like a virtual ad rather than a book about management practices.

Fourth, the audience spoken to was mostly boards and CEOs. There are a lot of other stakeholders out there, like customers, employees, suppliers, distributors, and the communities the companies serve. Shouldn't their reaction be considered in deciding which successions work well and which do not?

I could go on, but you get the idea. The authors needed someone to help them design a methodology before they started. Without one, they have produced a book, and some of what it says seems to make sense. With an appropriate methodology, I am sure they could have produced a much better book.

If you want more information on the subject, your best source in my opinion is to read the case studies in Directors & Boards, a magazine devoted to corporate governance. The material I have read in that magazine is consistently superior to what is in this book.

Good luck in overcoming your disbelief stall that people who recruit CEOs should know how to determine best practices in the area of CEO succession.

Rating:
Summary: Long Live the King! The King Is Dead! Long Live the King!
Review: Shareholders naturally assume that boards have succession for the CEO and other top executives all figured out. WRONG! A well kept secret is that many CEOs try to stall in this area, as a way to make themselves more secure.

Even the companies that work in this area can be unprepared. A young CEO may suddenly jump to another company (as Ray Gilmartin did from Becton Dickinson to Merck), die unexpectedly of a heart attack (as Jerry Junkins did at Texas Instruments), or fail to perform to the board's expectations (as has happened to many companies). Couple that with the fact that irresistible forces may mean that the style that worked well in the past won't wash any more, and apparent succession preparation can equal being totally clueless.

The authors are headhunters with Spencer Stuart and share what they learned in interviews during 1996 and 1997 at Met Life, Caterpillar, Hewlett-Packard, Mobil, Continental Grain, SmithKline Beecham, Delta, Mellon Bank, Bestfoods, Foster Wheeler, Hercules, and GTE. They also interspace other examples. One of the difficulties with a book like this is that things don't always turn out as they seem. A lot of praise in the book goes into Coca-Cola's preparation for the unexpected death of Roberto Goizueta. Douglas Ivester is quickly invested, which is where the book ends. But we know that he also was almost as quickly divested as he turned out to be a poor replacement. This replacing CEOs is a tough business. As irresistible forces become stronger and more volatile, replacements will probably occur even more frequently.

The book concludes that 10 key practices are required: Have a strong, involved board; continually expose the top management team to the board; encourage the next generation of CEO prospects to get early experience with outside boards, the media, and the financial community; create an active executive or operating committee so more executives get exposure to an overview of the company, its strategy and issues; do succession planning on an on-going, real-time basis; take as much human drama out of the process as possible (it's especially hard on number twos); tie some of the CEO's compensation to succession planning and progress; have the directors be paid in stock and make additional investments in the company's shares; calibrate the internal candidates with external ones; and develop a culture that encourages succession (a la Built to Last).

So much for the summary. Here are the problems. Although this book purports to be a best practice book, it does not investigate enough companies to succeed. This is actually a limited survey of practices, with picking out some that seem to work better. To be accurate, such a survey would have had to consider in equivalent detail at least 400 companies. A handful won't cut it.

Second, they have to measure of success in succession. They obviously like some better than others. Without some success measure, you cannot pick out best practices.

Third, the book plugs a service that appears to be from Spencer Stuart in callibrating internal and external candidates. To me, that made the book read like a virtual ad rather than a book about management practices.

Fourth, the audience spoken to was mostly boards and CEOs. There are a lot of other stakeholders out there, like customers, employees, suppliers, distributors, and the communities the companies serve. Shouldn't their reaction be considered in deciding which successions work well and which do not?

I could go on, but you get the idea. The authors needed someone to help them design a methodology before they started. Without one, they have produced a book, and some of what it says seems to make sense. With an appropriate methodology, I am sure they could have produced a much better book.

If you want more information on the subject, your best source in my opinion is to read the case studies in Directors & Boards, a magazine devoted to corporate governance. The material I have read in that magazine is consistently superior to what is in this book.

Good luck in overcoming your disbelief stall that people who recruit CEOs should know how to determine best practices in the area of CEO succession.