Future-Proofing Through Culture and Communications
Developing a solid leadership pipeline and establishing clear lines of communications are essential attributes of a successful sudden succession situation, as demonstrated by the stories recounted by Best Buy’s Nominating Committee Chair Kathy J. Higgins Victor and McDonald’s Chairman Andrew J. McKenna, Sr. at the NACD Board Leadership Conference 2012.
McKenna’s board had long made succession planning discussions a routine, beginning and ending every executive session and devoting at least one board meeting a year to evaluating possible new company leaders, both in the C-suite and in supporting ranks. Running a global company requires evaluating options from all over the world, and we expected the CEO to report to the board on his direct reports and new prospects, he said.
In Best Buy’s discussions, Higgins Victor recalled, the directors established a general plan for an executive vacancy, which established four options – looking within the ranks of management, having the founder/chair step in to lead, tap a recently retired CEO from another company, or look for a board member willing to help on an interim basis – their chosen route. “We did a lot of scenario planning, and one of the big areas we focused on was crisis management and what our roles were,” she said. “This way we didn’t have to spend time sorting through the process elements” when developing the emergency succession plan.
An established, reputable culture makes a difference in the success of the process as well, the panelists said. When McDonald’s evaluates executives from overseas, McKenna explained, the collective corporate culture “carries them through and creates consistency.”