In This Story
Millions of Americans have watched the HBO series Succession, about an aging megalomaniacal media magnate who can’t decide which of his flawed, feuding children should take over his global conglomerate.
Viewers noticed the resemblance between the family patriarch Logan Roy and real-life corporate founders, such as the nonagenarian Rupert Murdoch, whose heirs are jockeying for leadership in their empires.
Entertaining and enlightening, the drama shined a spotlight on a crucial question: How can companies conduct successful successions?
In five recent examples — JPMorgan Chase (JPM-1.02%), IKEA US, Starbucks (SBUX-0.80%), the Murdochs, and the Adani Group — a common thread emerges. Successful transitions always reflect a company’s culture and values, as well as an understanding of the need for long-term continuity.
JPMorgan Chase: Continuity and stability
When long-serving JPMorgan Chase CEO Jamie Dimon announced his eventual departure, the company had already set forth a clear succession plan. This proactive approach ensured a smooth transition, minimizing disruptions and maintaining investor confidence. The clear lesson: Organizations should start succession planning well in advance of formal announcements.
IKEA US: Innovation and inclusivity
IKEA US’ leadership change renewed its emphasis on innovation and inclusivity. Reflecting IKEA’s corporate culture, the new CEO, Javier Quiñones, embraces diverse perspectives and sustainable growth. Stressing collaboration and employee empowerment, he continues IKEA’s tradition of team leadership and consumer focus. This succession teaches that corporate leadership transitions should uphold the values that define companies to their stakeholders.
Starbucks: Balancing tradition with modernization
In the shadow of Starbucks’ famous founder Howard Schultz, Kevin Johnson’s and Laxman Narasimhan’s stints as CEO were times of turmoil. With its recent hiring of Brian Niccol, who had been chairman and CEO of Chipotle (CMG+0.17%), Starbucks is turning to the leader of another iconic brand focused on “people and culture, brand, menu innovation, operational excellence, and digital transformation.”
The Murdoch media empire: Navigating family dynamics in public
The handoff from Rupert Murdoch to his son Lachlan requires careful navigation of family dynamics and stakeholder expectations. This real-life drama underscores the need for transparency and strategic vision to maintain stability when the world is watching for volatility.
The Adani Group: Planning far ahead
In contrast to the family feuding elsewhere, the Adani Group — one of India’s largest multinational conglomerates — has been planning an orderly succession almost a decade in advance. When the conglomerate’s founder and Asia’s wealthiest man, Gautam Adani, turned 60 in 2022, he announced he would retire in the early 2030s. Consulting with his heirs, he developed a plan to turn over leadership to his sons Karan and Jeet, and nephews Pranav and Sagar. Learning every aspect of Adani’s businesses and practicing shared decision-making, the new team is conducting a smooth succession through the remainder of the 2020s.
The Indian and global economies have a stake in Adani’s success. A leader in sectors from airports to ports, finance, cement, and energy, including renewables, Adani is expected to play an important part in future efforts to expand India’s infrastructure
What lessons can we draw from these transitions?
First, succession planning matters. Sadly, an SHRM survey in 2021 found that 56% of U.S. companies didn’t have a leadership transition plan in place. Don’t wait until advancing age, sudden illness, or corporate crises accelerate the timetable for transitions. Organizations that plan proactively for leadership changes are far better equipped to ensure continuity. This means identifying and developing internal candidates well in advance, and giving them the training and exposure needed to understand different aspects of the business. The stakes couldn’t be higher: Effective succession planning reduces the likelihood of disruptions, boosts internal morale, and can often be more cost-effective than hastily hunting for external talent.
Second, transitions should reflect companies’ cultures and values. Transitions should be about changing the CEO who will lead the company while maintaining the culture and values that built the company. Smooth transitions identify and elevate leaders whose visions align with companies’ cultures, while also adapting to change and promoting innovations. In the drive to maintain a strong company culture, CEOs should share the responsibilities that come with the position – a move that not only promotes togetherness, but also helps potential successors reveal themselves.
Third, balance continuity with change. Striking the right balance between continuity and change is one of the toughest challenges of a leadership change. Yes, leaders are often brought in to facilitate transformation, but they must also ensure that the organization’s core strengths are preserved. Abrupt changes in strategy may disorient employees, while failures to introduce new perspectives could stifle growth. Especially while advocating and achieving changes, new leaders should appeal to the company’s founding values.
Fourth, lead by listening. New leaders need both internal and external buy-in, and quickly. To understand the business and earn stakeholders’ trust, leaders must engage in “active listening.” Companies should cultivate leaders with emotional intelligence, as well as other skills and strengths. For leaders navigating changing times, the capacity to connect with people is often as valuable as technical skills. That makes listening to people at every level of the company critical – rather than simply relying on what’s relayed from the leadership team.
Fifth, empower the leadership team. New leaders should make an extra effort to work with and, if necessary, win over the leadership team. By collaborating with their colleagues, new leaders can leverage the expertise and institutional knowledge of their team members, creating a more resilient and adaptable leadership structure.
Of all a CEO’s responsibilities, planning and conducting a leadership transition may be the most underestimated but urgent mission. In every organization, leadership transitions are inevitable, and their success depends on deliberate preparation, effective communication, balancing continuity with change, and active listening and relationship-building.
Transitions aren’t only about replacing a CEO. They’re about preparing an organization for the future, while respecting its past and enlisting its leaders and stakeholders in the adventures ahead.
By keeping these concerns in mind — and with careful planning — organizations can ensure successful successions.
Lars Petersson was the president of IKEA US from 2015 until 2019.
