Recently, there have been some CEO transitions at large companies: Tim Cook (joined Apple in ’98) from Steve Jobs, Virginia Rometty (joined IBM in ’81) from Sam Palmisano. These two new leaders should beware of their peers: HP’s had 3 CEO’s in 13 months, and Yahoo’s had 5 in 5 years.
While 23% of organizations have a formal succession plan in place (Source: SHRM), the majority do not plan early, involve the predecessor, or use objective measures to assess readiness. The result is either an internal political firestorm between candidates, or an outsider who does not understand the company culture.
What is not commonly acknowledged in hiring and succession is favoritism and nepotism.
40% of Americans work for the same firm that employed their fathers. Yet, this number increases to 70% if the father is in the top 1% of earnings (Source: Journal of Labor Economics).
84% of executives admit that favoritism occurs in employee promotions at their company (Source: Center for Venture Research).
Is your company prepared, in a fair and equitable process, to replace critical, pivotal and executive roles?
