Kaun Banega CEO

Booz & Company has been tracking CEO succession for more than a decade. The picture that emerges every year has some clear lessons for us. Their latest report says:In 2012, 15 percent of CEOs left office, up from 14.2 percent in 2011. This is the second-highest rate of CEO successions in the history of our study. The new leaders who came into the office were, for the most part, familiar faces: companies promoted people from within 71 percent of the time; a quarter of incoming CEOs had worked at the same company for their entire career; 81 percent of new CEOs had the same nationality as the company’s headquarters; and 95 percent were men.Succession planning for any role is a long drawn process full of trials and errors. The CEOs role is the most complex job in the organization. So organizations need to start finding a successor to any top job as soon as the new incumbent starts. In case of the top job, remember, nearly 80% of CEOs of S&P 500 companies have been ousted before retirement.Many large corporations are caught unawares when they have to find a successor to the top job. Consider the statistics: 43% of publicly traded companies do not have a formal succession plan. 61% do not have a CEO replacement plan. 61% have no internal candidate development planning.Procter & Gamble had to call back Lafley from retirement to steer the company till a new CEO was found. This comes from a company that is known for its planned approach to succession. Yesterday Steve Ballmer, the CEO of Microsoft announced that he was going to retire in 2014. No successor seems to be in sight. Businessweek magazine’s reaction to the news: “Microsoft CEO Steve Ballmer to Retire. What Happens Next Won't Be Pretty”. I agree.There is no defined successor to Ballmer, only speculation. There are several lists of possible candidates floating around. Bill Gates is part of the succession planning committee that will supervise the search. Gates left in 2000 to focus on philanthropy. There is no way he will return to lead Microsoft to be a tech leader again. So that possibility is a non starter.Ballmer had said for years that he would retire by 2017. He actually had a thirteen year stint at the helm. So the company had plenty of time to identify and groom someone to takeover. Being unprepared is not an acceptable stance.There is no doubt that the job will not be an easy one. Apart from X Box, Microsoft has never cracked the mystery of how to market an idea to consumers. There is a video titled “Microsoft designs the iPod package” that pokes fun at the nerd’s inability to communicate with the user.http://www.youtube.com/watch?v=G9HfdSp2E2AThe successor to Ballmer will have a tall task – to reinvent Microsoft. The new CEO will need to reassure the 100,000 employees that the task is tall but doable. The toughest aspect of the reinvention will be to build a culture where the company’s leaders learn to tune in to the employees and teach the technical wizards how to listen to consumers.The second task will be harder. After all Microsoft built the operating system without any input from the user. Windows just came preinstalled in every desktop and laptop. The consumer had no choice. Then Office made Word, Excel and PowerPoint ubiquitous in every organization. When they missed the mobile revolution, the company went into denial instead of asking how they could join the revolution.You could accuse Steve Jobs too of ignoring the customer when he had said, “A lot of times, people don’t know what they want until you show it to them.” That approach works when the product being launched is beyond the imagination of the customer. A Mac or iPhone or iPad or iTunes could pull off this approach. They were game changing concepts. For the lesser mortals, the voice of the customer can’t be ignored ever.Success and market share are two leading causes of deafness in organizations. The same Microsoft will now have to go back to the customer as the new CEO charts out a fresh path. When it came to finding a successor, Apple did a better job. They had made it clear that Tim Cook was the chosen one. So when Jobs was gone, the succession was smooth.This would be one lesson Microsoft could learn from Apple.Do you agree?http://www.youtube.com/watch?v=AxxF5bl37oA-----Join me on twitter @AbhijitBhaduri