Disney’s Board was well prepared for the succession of Chairman and CEO Robert Iger, until blindsided by the surprise resignation of COO and heir apparent Thomas Stagg. This was the second time in 25 years that the company suffered the loss of an internally selected CEO candidate. Mr. Stagg’s unanticipated departure was preceded by the tragic death in a helicopter crash (1994) of Frank Wells, CEO Robert Eisner’s carefully groomed successor.
CEO succession planning is a significant challenge for all businesses, given the many variables in play. At minimum, these include the company’s dynamics and culture, health of the business, and global macroeconomic environment. Disney’s Board implemented a comprehensive CEO succession plan that appeared to “check” all the necessary boxes:
Everything was on track for the succession. However, the plan derailed when news of the Board’s interest in evaluating a “broader slate” of external CEO candidates leaked outside the Boardroom.
Now, as the Disney Board focuses on the selection of a CEO candidate for the second time, we’d like to provide some advice - commit to the selection and grooming of an internal candidate (and, What’s said in the Boardroom stays in the Boardroom)!
Research data supports the commitment to selecting an insider CEO. Executives coming into top senior management positions from outside the company have a failure rate of approximately 66% within five years. Often the executive remains an outsider and elects to leave the company or is asked to leave (both outcomes akin to an organ transplant rejection).
The commitment to finding a suitable internal candidate has to be managed with all constituent parties.
This is especially relevant when working with search executives. While search companies fill a valuable role in vetting external talent pools, it would be naïve to ignore the prestige, visibility, and increased contacts gained by placing a high profile outsider at Disney.
Examples of failed external successions abound. In 2001 when Jack Welch chose GE executive Jeff Immelt as his successor, the unsuccessful and high profile other CEO candidates Bob Nardelli and Jim McNerny left the organization almost immediately for new opportunities. The window to be CEO of a major company is open only so long.
Both external hires were regrettable decisions that cost shareholders billions of dollars. Both companies, under the leadership of an outsider CEO lost market share and talented senior executives. These executives anticipated the cultural disruption of having a new leader who would likely bring in several trusted GE lieutenants to fill key positions.
Continued from Part I, Posted May 3rd, 2016 on Linked-In
How difficult is it to coach a Character Disorder (CD) executive? Very! Can coaching change their core temperament and/or character? NO.
Despite what you’ve been told by academicians, b-school professors, business authors, and some organizations that “certify” coaches…it can’t be done. Six months of coaching can’t take a raging narcissist or insensitive bully or preening manipulator and change his/her core temperament.
However, there are ways an effective coach can have impact: blunt the edges, increase self-awareness, enhance self-monitoring, find alternative ways to handle situations, curb impulsiveness, etc. You can’t change the core, BUT, you can change how the CD executive behaves. Most of your personality/temperament/character is pretty well set by age 5. You can no more control your core & who you are than your pulse or blood pressure. You are you, and on automatic pilot. And so is the CD executive!
Maturing, experience, and significant life events (marriage, birth of a child, loss of a loved one, heart attack) can possibly set a CD executive on a different course. Time, of course, softens and mellows us all—hopefully. But a selfish and self-centered person will always be one to some degree. That’s why you can start a conversation with friends and family you haven’t seen for 30 years like it was yesterday—that’s the constancy and permanence of core character and temperament.
So, how do you coach the CD executive? An important caveat: If you are a subordinate and work for them or are a colleague/peer, please ignore most of what I say. It does not apply to you. Unless you have sufficient power of position including the backing of a senior executive higher on the food chain (and the CD knows this) you’ve got your hands full just getting along with the CD executive.
What can a coach do?
You want them to respect you, and at some level fear you. Your lever, perhaps your only lever, is their job security and having a more senior executive back you. The CD has little conscience about manipulating you, lying to you, and doing whatever they need to maintain their position, authority, and security including “taking you out”.
Having been given a coach, they are enraged. How dare someone assign them a coach! It threatens their power and security. Prepare to be flattered, coddled, befriended, and praised. If that doesn’t work, you’ll be undercut and undermined by the CD executive who will smoothly tell others (particularly more senior leaders) how incompetent, ineffective, and insensitive you are.
In Post III there will be additional tips.
It is frequently reported that many top executives have integrity and character issues. Not true. Most senior executives are bright, stable, balanced, manage their emotions, work well with others, have sound interpersonal skills, and display prudent judgement. Their names rarely appear in the headlines.
Yet, if you spend your professional career in executive coaching, leadership development, and/or human resources, you will periodically encounter a character disorder(CD) executive. This is an executive with serious personality flaws that compromise their effectiveness, make life miserable for people around them, and create a corrosive atmosphere. To be clear, these are not serial killers or demented drug addicts. We all possess "character" flaws; it's a matter of extremes. This is the "bad" boss and bully. This is the executive whose employees have gone to HR, complained many times, and returned frustrated. The CD's employees are chronically unhappy, frustrated, discouraged, and are busy looking for a new job. Turnover in his/her area is consistently high. They tie everyone around them in knots, destroy careers, undermine teams/divisions and ultimately can wreck an organization. And while they are terrible bosses managing down, their political skills and ability to manage up are outstanding. They bully down and flatter up.
One diagnostic indicator is a very large "ego". They have an ego the size of Montana. Now having an ego is not a bad thing, even one that has swelled a bit. As they say, "it isn't bragging if you can do it". But, when the ego gets too large and can no longer be reined in or managed, when narcissism takes center state, you have a problem and likely a CD. Is it always about them? Can no one else generate a good idea or close a deal? If you're lower in the organization hierarchy--what have they done for you lately? How do they greet you? or do they even bother with the "little people".
If the CD is a senior executive and an even more senior executive starts asking questions about what's going on in the CD's department, they will encounter an eerie silence. Few people rate out their boss. We all know what happens to "whistle blowers". Remember Enron? The downside risk for speaking up is bad: everything from getting "chewed out" to losing your job.
Everyone wonders how they get away with it. Do they have awkward photos hidden somewhere? Or perhaps they have powerful negative information about someone senior they worked with earlier in their career. Is their boss so susceptible to flattery they're blind? Are they managing the company's biggest account, the one it can't afford to lose? Do they control important business relationships representing over 15% of profit? Is anyone brave enough to tamper with that level of "success"?
When trouble erupts and spills into the corridors (and it will) their boss pulls out all the stops to protect them and/or look the other way. It is much easier to have HR soothe the disgruntled and unhappy employee(s). Tell them they're exaggerating or being overly dramatic or misinterpreting their boss's well meaning behavior. It's not harassment, that's constructive criticism. The polished CD executive can be extremely politically correct.
Randy Cheloha, Ph.D. has been consulting to senior executives for over 30 years. He is a licensed psychologist with graduate degrees in both industrial and clinical psychology. This foundation anchors and informs his perspective. He has expertise in executive assessment and coaching, succession planning, and career transition.