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HOW TO PICK THE RIGHT CEO
Not many chief executives spend time wondering who their successors will be. That's understandable: It's human nature to think that, if you're top dog, no one else can do the job. But it's clear that Corporate America will have to take succession planning more seriously. The recent departure of Gilbert F. Amelio from the No.1 slot at Apple Computer Inc. and the resignation of John R. Walter from the corporate suite at AT&T show how badly awry the process of choosing leaders can go. With corner offices slated to open up within the next few years at such companies as General Electric, Ford, and Citicorp, the search for talent is on.
Today, a few forward-looking executives and directors are showing how best to orchestrate the selection. An intricate, six-month process at Campbell Soup Co. elevated internal candidate Dale F. Morrison to the position of president and CEO on July 15. Campbell's board, which BUSINESS WEEK named Best Board in America last year, undertook an elaborate screening of two internal candidates and three external ones, conducting many interviews, background checks, and discussions within the search committee--without then-CEO David W. Johnson present to influence the outcome. Contrast that with AT&T Chief Robert E. Allen's meddlesome involvement in Walter's selection less than a year ago.
Campbell's selection process was brought about in part by nudging from Johnson, an outsider hired by Campbell in 1990 to shake things up. Indeed, the CEO can set the tone for planning, just as for all other aspects of business. GE's John F. Welch has made succession a clear priority by rotating more than a dozen aspirants through numerous assignments and challenges, making sure they have frequent contact with company directors. At Corning Inc., the CEO and board meet annually to consider candidates, while at SmithKline Beecham, promising executives are moved through a series of positions so that they can boast experience in two business units, two functional areas, and two countries. Corporate boards would do well to follow the example of Campbell and others as they select new leaders.