From White House to Mouse House, successions are a killer problem

THE Democratic Party’s defeat in November was the result of, among other things, failed succession planning. An ageing Joe Biden refused to retire after one term; he appointed a vice-president who presented a limited threat, having failed to shine in the 2020 primaries; and, when the party elders forced him to withdraw after his catastrophic debate performance, he effectively scuppered the idea of holding a mini-primary by immediately endorsing Kamala Harris.

Botched succession is a pervasive problem in human affairs: in autocracies as well as democracies (Vladimir Putin’s eventual departure will doubtless lead to a bloody power struggle) but also in the private sector as well as the political world. The one “known known” in the business world is that CEOs will eventually have to hand over to a successor. Yet companies repeatedly make a hash of it.

In The Life Cycle of a CEO: The Myths and Truths of How Leaders Succeed, Claudius Hildebrand and Robert Stark present striking data on succession failures. Some of the world’s most illustrious companies have had to dump their CEOs after a brief spell at the helm: Leo Apotheker was fired after 11 months as CEO of Hewlett Packard Enterprise (with a golden parachute of US$7.2 million in cash and US$18 million in company stock) and Bob Chapek was fired after “three years of hell” as CEO of The Walt Disney. Tyson Foods replaced four CEOs in 2016-2023 while the video-gaming retailer GameStop cycled through five CEOs in 2018-2023.