As a student of African politics, I love to read about leaders on the continent (I’m a student of US politics too). Statements credited to leaders on the continent are my favourite. In 2006, during an interview conducted by journalists with Guinéenews, President Lansana Conté (the President of the Republic of Guinea) announced that he intended to stay as President until 2010, while still looking for a successor who “loves the country and will protect it against its enemies.” The statement stayed with me as I pondered as to how successful succession can be planned. President Lassana died in 2008 without that successor or putting a succession plan in place.
A few companies come to mind as I think about great successions.
- Tim Cook taking over from Steve Jobs as CEO of Apple.
- Sundar Pichai succeeding Larry Page, who had succeeded Eric Smidt as CEO of Google.
- Satya Nadella taking over from Steve Ballmer, who took over from Bill Gates as CEO of Microsoft.
How did they do it at Apple?
It had always intrigued me how Steve Jobs made such a great decision with Tim Cook. It fascinated me so much I decided to start some research to understand how they did it. Today, I am sharing what I learnt. I found one of the last emails he wrote to the company board mentioning Tim.
On Monday, January 17, 2011, the then CEO (Steve Jobs) sent the following email to the employees at Apple:
At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.
I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.
I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.
Source: Apple Inc.
Steve speaks about his great confidence in Tim and the rest of the management at Apple. A few months later the big decision was here and he had to step down due to health concerns. He had a succession plan which he activated. Find below his resignation letter:
To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Source: Apple Inc.
Corporate Stakes Could be Higher.
Sometimes, we make-believe that there is less at stake when corporations are considering successors (that is, when compared to a nation). Corporate stakes can sometimes be bigger than national politics. As at August 2011, when Tim Cook finally took-over as CEO, Apple had $108b in revenue (trailing 12 months). Apple would have ranked as the 35th biggest state economy in America, the 7th biggest economy in Africa and 102nd global economy (current GDP vs 2011 revenue numbers). With stakes so high, politics, coercion and manipulation would be rampant as humans hustle for power.
Across Africa, there’s a struggle to find qualified successors in both politics and business. Lessons may have to be learnt from those who played this game at such high levels and achieved distinctions. I think the best way to look at these lessons is to examine a few assumptions I learnt along the way about succession.
Assumption 1: Most Successors were first Mentees.
It is assumed that most successors were first great mentees. In the case of Tim, that was far from the truth. Tim was well respected in the industry and it appears the Steve did everything to recruit him. Tim had been Director of North African Fulfilment at Compaq and was establishing himself as a maverick in operations management. He was skilled at optimizing operations to make them leaner and better.
As soon as he took over, Tim closed Apple-owned factories and warehouses. He outsourced them, replacing them with contract manufacturers. The board of Apple saw what Steve had seen before hiring him. In his words, Tim spoke about first meeting Steve…
“…five minutes into my initial interview with Steve, I wanted to throw caution and logic to the wind and join Apple. My intuition already knew that joining Apple was a once in a lifetime opportunity to work for the creative genius and to be on the executive team that could resurrect a great American company.”
Read full speech here: https://www.fastcompany.com/1776338/tim-cook-apple-ceo-auburn-university-commencement-speech-2010
The more you read the more you see that the respect was mutual between these two. In Tim, Steve saw the future of Apple. With Tim, they would increase production significantly and guarantee profits.
Assumption 2: Many Successors were early adopters.
On joining Apple in 1998 (22yrs after the company was established), Tim was first appointed Senior Vice President for worldwide operations. He wasn’t employee number 2 or 3 as you would often expect when doing succession planning. Many of the founding staff had left or were forced out when the board first Steve and hired new management but many were still at Apple. Tim was an outsider with a massive understanding of what it takes to value engineer tech. Trained as an Industrial Engineer + Fuqua Scholar (Duke University) with a mind for operations optimization. Before he was appointed to that position at Apple, he was first Director at IBM and then Vice President at Compaq. During his Auburn University Commencement Speech in 2010, he shared how his friends and family tried to convince him not to make the move to Apple and instead stay at Compaq.
Tim was joining Apple at a critical point. Steve Jobs had just returned to the company after being fired a few years back. In 1996, we heard he was back and ready to recreate the buzz around Apple. He was recruiting some of the best minds he could find to support his vision for the company. Tim was one of such people, joining the all-star cast. Two years after Steve’s great return was the recruitment of Tim who would later turn out to be his successor.
So Steve Found Him.
In hindsight, Tim made a great decision moving to Apple. On the flip side, Steve was spot-on with his choice to hire Tim. Tim had led himself to this point, identifying a niche and created a career out of operational improvement. Steve would have lost out if he didn’t hire Tim at the time and together plan the future of the company (alongside other management personnel).
Tim shared in that same commencement address how he had been advised by many not to leave Compaq at that time. At the same time, there may have been many who thought Steve was making a bad decision by hiring him but it turned out to be a perfect pairing. Think about what the staff MAY have heard:
I will like to introduce my successor, who I just hired a few months ago. Give him your full support.
I also wonder how Steve managed the old guard and those who were ambitiously gunning for that position. How do you explain to them that they were never in contention for the role? People like Chris Espinosa, popularly referred to as Apple’s longest-serving employee, have been there from the beginning. Chris is only being mentioned here for serving long (22yrs at the time Tim took over) and not for wanting the role. Leadership isn’t something for the faint-hearted.