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Missionary Positions

Some wag once opined that management succession is like sex. It is carried on behind closed doors, is rarely discussed in detail by the participants, and the players involved usually aren’t very good at it.Professor Vancil has taken a peek through the closet door in this highly readable book. No other author that I know …

Some wag once opined that management succession is like sex. It is carried on behind closed doors, is rarely discussed in detail by the participants, and the players involved usually aren’t very good at it.

Professor Vancil has taken a peek through the closet door in this highly readable book. No other author that I know has come up with so many specific case histories and with so much commentary on, and analysis of, this arcane subject.

What’s more, Vancil proves to be a superb storyteller. Although he did not use a tape recorder in interviewing his twenty-nine management succession respondents, his first-person narratives are superbly crafted. His reporting is candid and explicit. He uses undisguised names, dates and places throughout. Most of his cases occur within the last five or six years, so this is up-to-date stuff.

The idea for the book was sparked by a remarkable story told by Reginald Jones to Vancil’s Advanced Management Program class at Harvard Business School, about how Jack Welch was selected to be his successor as CEO at General Electric. Vancil then enticed three groups of CEOs (37 in all) to talk openly in seminars on the subject. From these groups and through his personal connections with other CEOs, he came up with 20 authoritative, behind-the-scenes reports as to how the process evolved, who shared in the decision and what lessons were learned along the way.

From the viewpoint of a CEO or a director who is currently exposed to management succession situations, all of the tales have useful elements, and all are interesting to read. The Reg Jones/General Electric story, while sharply atypical, is fascinating. (Incidentally, Jones’ class presentation was videotaped and is available through Harvard Business School. I have seen it and enjoyed it immensely.) I particularly liked Vancil’s treatment of the Mitchell Ford/ Emhart, the Paul Oreffice/Dow, the Hicks Waldron/Avon and the John Hanley/Monsanto cases; they seemed more widely applicable than the episodes at AT&T, RCA and Merrill Lynch, for example.

In addition to his excellent reporting, Vancil does a competent, although somewhat “Gee Whiz” job, of commenting on each case as he analyzes the critical factors, key decision points, power forces and the sequential timing.

The primary conclusions reached by Vancil are unsurprising. He observes that CEOs and corporations that have a structured plan for management succession, who communicate effectively with the top management echelons and who get the board to participate early in the process, tend to do the best job. Since these are the kinds of companies that have sophisticated strategic planning, management development and performance-review systems, management-succession programming automatically comes a little easier.

Most of the case companies are big, rich and had successful CEO transitional experiences. Vancil covers a couple of bad trips-Allied Chemical and Dow, for instance-but on the whole, his stories have happy endings. It would have been enlightening to have had a few more horrible examples, but few CEOs are willing to talk publicly about their mistakes.

If Vancil had stuck with his case histories and commentaries, he would have had a fast-paced book all the way. Unfortunately, as happens to many professorial writers, he feels compelled to convert his sprightly project into an academic research effort. His 25-year analysis of CEO changes at 227 large companies adds little to the book, and I wasn’t fascinated with his charts.

By the same token, he comes dangerously close to jumping to conclusions from his limited 29-case data base. His sample didn’t include enough industrial groups, enough regional variety, enough smaller or troubled companies to reflect accurately what is happening throughout the corporate spectrum. About half of his narrators were Harvard MBAs, and there are a large number of interlocking directorates which tend to generate a modest amount of sameness in some of the approaches taken.

These are minor flaws, really, in Vancil’s creative effort to shed light on an important and hitherto under-reported corporate area where few guidelines exist and where most CEOs and directors get only one chance to participate in the baton-passing operation.

My personal exposure to management succession has been narrow but active. I have been chosen as a CEO, have chosen my successor and have been not chosen. As a director, I have been involved intimately in eight separate CEO changes. In about half of the cases, the baton passing was smooth; in the other half, it was regrettably messy and time-consuming.

I agree with Vancil’s summary diagnosis, in which he says that a healthy company with an intelligent CEO and a participative board, is in an excellent position to structure an effective process for passing the CEO baton. Today, however, with so many of our corporations entangled in major restructurings, complicated international mergers and leveraged buy-outs, the rules of the game and the playing fields are changing rapidly-and so are the power factors which govern the management succession process.

Professor Vancil recently told an interviewer that he plans to conduct additional seminars in this area. “Passing the Baton is my first statement on the topic,” he said. “It is not my last.” This is good news for both budding and retiring CEOs and for outside directors who need all the help they can get to make the baton pass go right.

In the meantime, I commend this book to thoughtful CEOs as rewarding reading. I expect to be involved soon in a succession situation and I’m going to buy two copies-one for the CEO and one for the chairman of the nominating committee. This is the best compliment I can pay to the author for his erudite work.

About robert w. lear