THE BIG READ: Two not better than one
In the CEO succession stakes, spare a thought for the next in line. Whoever it is hardly ever looks as good or as suitable as the one departing. The board of directors has to manage what turns out to be a fraught process because there is rarely an ideal candidate.
No matter how carefully the long-term succession plan has been put in place, and no matter how much is invested in the preparation of the next in line, the final result is, increasingly, a somewhat unsatisfactory compromise.
With Jacko Maree stepping down as CEO of Standard Bank this scenario has once again played itself out. Instead of one anointed successor, as everyone inside the business and in the market expected, the board has decided to give the job to two of its executives, who will be joint CEOs.
The bank has defended the decision by referring to the complementary skills of Simpiwe "Sim" Tshabalala and Ben Kruger. But critics have alluded to the potential for "two camps" and for fractured leadership.
More important perhaps is the message the decision sends.
To the market it is evident that, despite a well-crafted succession plan, the man targeted all along, Tshabalala, is still thought to be too lightweight and not quite up to it. Why not? He is 45 years old, the age Maree was when he became CEO, and has been at the top of the bank's structure for some time now. If he is not ready now, when will he be?
Trying to manage the risk of appointing someone perceived to be too lightweight, but at the same time bowing to our country's empowerment imperatives, the final decision is a disappointing compromise. It also implies, unfortunately, that Maree has failed in the most important task of a CEO: ensuring that a well-trained and wholly suitable successor is ready to take over when he leaves.
Even if Tshabalala himself might acknowledge that he is not yet ready, confirming this notion by appointing someone to work alongside him deprives him of the vote of confidence that could have given him the final lift and established his confidence in himself. There are many examples of the job making the man.
If a joint situation had been intended all along, the outcome might have been more acceptable. But this is clearly a compromise because the board could not reach the ideal of a single suitable appointment.
Also disappointing to the stakeholder community observing the whole thing is that Standard Bank, which has had an exemplary track record of preparing a well-qualified black candidate to succeed to the CEO position, in the end also appoints a white joint CEO to shore up the risk. If Standard couldn't get it right, what business could?
Could a more satisfying decision have been to appoint Tshabalala as CEO and Kruger as the chief operating officer reporting to him?
If, as they say, Tshabalala will be the head of South Africa and Kruger the head of the investment bank, why not make each the CEO of his own domain with full responsibility for that business instead of giving them the "joint" title that somehow smacks of indecision?
Pundits say Tshabalala will end up running the bank eventually and Kruger will stand back in due course, but it's not an inspiring vision for the moment, is it?
The "divine art of compromise" might well be a sound strategy in the circumstances and, in the end, the only practical solution, but it leaves everyone a little disappointed. It robs the candidate of the full confidence of the board and the opportunity to grow into proper CEO stature. It also deprives those shareholders who like to "back the jockey" of a focus for their faith in an investment.
Several other big leadership transitions are in play at present and compromise seems to be where most are heading.
In Kenya, Raila Odinga is challenging the outcome of the election in which Uhuru Kenyatta has won more votes. Both have big constituencies but the neat process of democracy does not appear to be working.
In Venezuela, the untimely death of Hugo Chavez has sent the country and his ardent worshippers into a tailspin. His likely successor and the man now anointed as acting president, Nicolas Madurom, says "the presidency belongs to our commandante". Chavez's body is to be embalmed and he is likely to live in the minds of his people as the ideal of a president. The next president will have the shadow of Chavez hovering over him for a long time to come.
A similar succession process is under way in the Catholic Church. The cardinals are now in conclave and there must be a great deal of debate about the attributes necessary to be the best leader for the world's Catholics. The church is growing most rapidly in Africa and in Latin America. So, should a new pope be from either of these rising constituencies? If one and not the other, will this also lead to a compromise?
Two Harvard Business Review blog network posts are worth noting. Morra Aarons-Mele's comment last month was "compromise is not a dirty word" and John Baldoni some time ago said "compromise can be an act of leadership".
In the piece, he says: "Webster's New World Dictionary defines compromise as primarily 'a settlement in which each side gives up some demands or makes concessions.' Unfortunately the word 'compromise' has become a pejorative term, something akin to selling out."
- Redelinghuys writes in his personal capacity, not as a representative of Heidrick & Struggles. This is an edited version of the article that appeared first on www. dailymaverick.co.za