Apple Succession Plan: Nobody's Business?

(page 2 of 2)

Beyond reassuring the public over Jobs' health, Apple and its board must also ensure that Jobs does his best to transfer to Cook the goodwill he has amassed with investors and the rest of the public, says Dave Ulrich, a human resources expert and professor at the University of Michigan's Ross School of Business. "In a logical CEO succession, Steve Jobs would have gone out with him, let Tim begin to do the speaking, and then that 'relationship equity' is transferred," says Ulrich. "In this case, it looks like that is going to be difficult."

Microsoft's Model

Some governance experts and technology industry executives point to Microsoft (MSFT) as an example of effective succession planning. Like Apple, Microsoft was led by an iconic chief executive, Bill Gates. But Microsoft was methodical about grooming a successor to Gates, anointing Steve Ballmer as the clear heir apparent when he was made president in 1998. After Ballmer became Microsoft's chief executive in 2000, the disruption was minimal.

Another reason the transition went so smoothly is that Microsoft kept Gates around in a high-profile position. Although he stepped down as chief exec in 2000, Gates retained the title of chairman and created a new position of chief software architect for himself, a job he held until mid-2008.

Apple could consider a similar move, carving out a role for Jobs that lets him impart his vision but removes him from the daily line of strategic decision making. "He could still have a profoundly creative role," Sonnenfeld says.

Joe Grundfest, co-director of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University, says Apple's board may be doing the best job it can amid difficult circumstances. If board members believed Jobs was going to be fine, they may not have seen a big need to be more forthcoming about his health or future, he notes. "One of the hallmarks of a complex medical condition is a diagnosis can change over time," Grundfest says. "If the board has told the truth, then they've handled it best as they could."

Ultimately, some leaders are so irreplaceable that no amount of succession planning will ensure a seamless power transition. "In some sense, with the charismatic person, it's difficult to prepare a successor, because they are bigger than life," says John Larrere, general manager at the management consultant Hay Group. "The next person isn't going to be bigger than life to start with."

Ante is an associate editor for BusinessWeek. McGregor is BusinessWeek's management editor.