Talent Management - January 2009 - (Page 27)

Companies also need to have comprehensive plans in place to avoid employee and investor uncertainty in times of tragedy. Sometimes, the candidate who has been groomed for the role is ready and the course of action is clear. In other situations, companies rely on an interim individual to serve as CEO until a permanent replacement is named. The naming of the interim CEO in these cases should come as no surprise to those inside or outside the company. needed to round out candidates’ executive qualiﬁcations and broaden their corporate insight. As the actual transition approaches, the board should evaluate the development progress, review the business results each candidate has achieved and reassess each individual’s ﬁt with future business challenges. The board should then choose a successor and take formal action to pave the way for the transition, such as promote the successor to a second-in-command role such as COO or president and/or publicly announce the transition. Of course, things don’t always go as expected, and succession planning needs to take this into account. Here are two unplanned CEO scenarios to consider, along with advice on how to deal with each situation: •The CEO is incapacitated. Incapacitation is one of the most common complications in CEO transitions. A CEO may suffer a stroke, heart attack or worse and end up unable to perform the duties of the ofﬁce. Consider the assassination of President John F. Kennedy in 1963, for example. In this case, the Constitution stipulated the immediate succession of Vice President Lyndon B. Johnson, and an orderly transition of presidential power took place. In an atmosphere of tremendous uncertainty, order at the top was ensured via thoughtful pre-planning. • The CEO needs to be removed involuntarily. In 1973, the United States experienced the most acute Constitutional crisis in its history when President Richard Nixon neared impeachment for the Watergate scandal. While Nixon resigned to avoid impeachment, the process — to forcefully remove him from ofﬁce if necessary — worked as intended. While tumultuous, order in the presidential transition process was maintained because the government had a clear process to follow. In the corporate world, CEOs occasionally are forced out due to factors such as shareholder unrest, weak performance or personal legal problems. Boards of directors need to have a deﬁned process for these situations to avoid uncertainty and maintain their authority over the CEO position. Successful Transition Ensuring a successful top leadership transition doesn’t end once the public announcement is made. As has become vogue in presidential politics, a coordinated effort to establish the new individual’s credibility often is undertaken during the ﬁrst 100 days, about the length of the ﬁrst ﬁscal quarter after the switch. January 2009 talent management magazine www.talentmgt.com 27 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - January 2009

Talent Management - January 2009 Editor’s Letter Contents Human Performance Leading Edge Learning Connections Integrate Web 2.0 Into the On-Boarding Experience Show ’Em the Money: Compensation Trends 2009 Transition at the Top How Hollywood Manages Talent and What You Can Learn Get the Most Bang With Limited Training Bucks Life After Layoffs Attract Specific Talent Groups Performance Management: Its Time Is Now Helping the Helpers Advertisers’ Index Editorial Resources Full Potential

Talent Management - January 2009

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