The recent accidental death of Micron Technologies CEO Steve Appleton raises the question, What risks do companies face when their leadership is disrupted? We look to IBM, Apple, RIM, Microsoft, and HP for lessons.
The crash of a private plane in a field outside Boise, Idaho shouldn't normally make national news. But when the lone soul aboard is the chief executive of the last remaining designer and manufacturer of memory chips in the U.S., the headlines are justified.
The death last week of Micron Technology's longtime CEO, Steve Appleton, in the crash of his single-engine Lancair, serves as a stark reminder of the risks companies in any sector face when their leaders die. In Micron's case, the risks ran particularly deep, as Appleton had been only the second CEO in the company's history, taking over the top job from co-founder Joe Parkinson in 1994 three years after being named president and COO. His penchant for living on the edge was well-known, and he had survived a 2004 crash with broken bones and a punctured lung.
In the days since the fatal crash, Micron's leadership game plan has emerged as a textbook-perfect example of how to maximize business continuity through chaotic periods — and of how businesses must prepare for the inevitable change long before it actually happens. President and former COO Mark Durcan stepped in as interim CEO and immediately began working with the maverick company's leadership to build a transition roadmap. The lesson from Micron's experience is clear: Like IT's disaster recovery plan, companies must have a leadership-focused business continuity plan in place or risk destabilizing, possibly fatal consequences.
A look at a few companies that have done it right — or even wrong — can help those still on the fence get started on their own leadership transition planning:
IBM. Arguably the company that wrote the book on modern leadership principles, the global services giant's most recent leadership transition sets a high bar. Sam Palmisano, who over the last decade had aggressively reinvented the company by getting out of non-competitive businesses like PC-based hardware and transitioning into services, consulting, cloud services and software with a string of buyouts including PriceWaterhouseCoopers, Rational, FileNet and Canada's own Cognos, had his successor lined up months before he made the announcement. Virginia (Ginni) Rometty had been with the company for 30 years, filling a range of diverse roles, when she became president and CEO in October. Palmisano's go-slow approach — he stayed on as Chairman — has helped smooth the transition.
Apple. Long before co-founder Steve Jobs died last October, he was preparing his leadership dream team for his departure. Jon Ives was and is the design genius that gave Apple its signature style. Phil Schiller built the marketing machine that turned Apple products into emotional objects of aspirational desire. New CEO Tim Cook brought 14 years of deep-rooted Apple experience to the role, and his stay-the-course approach has allowed Apple to maintain its momentum while the leadership team prepares for the inevitable day when the final Jobs-influenced products emerge from the pipeline. Cook is no Jobs, but the company's long-in-the-works leadership transition plan positioned Apple for Job's departure — and for whatever came next.
RIM. Newly minted CEO Thorsten Heins has taken an immense amount of heat from the market for not being an outsider at a time when investors had been holding out for a fresh perspective. Critics saw him as a clone of now-ex CEOs Jim Balsillie and Mike Lazaridis. But knowing the company from the inside has allowed him to move faster on solidifying RIM's 2012 product roadmap and updating the company's somewhat disconnected communications strategy. He's hit the ground running, whereas a newbie would probably still be learning the ropes.
Microsoft. When Bill Gates began his long, slow exit from the corner office, it was a foregone conclusion that Steve Ballmer would eventually take over. While Mr. Ballmer's tenure has been marked by sluggish share pricing and equally sluggish reactions to tectonic market shifts that threaten to erode the desktop software pillars that drive the bulk of the company's revenue, no one doubts that he brought a deep well of organizational knowledge to the role. In the early days of Ballmer's tenure, it was that experience that soothed investors who openly worried about Microsoft's prospects in the post-Gates era. Since then, it's allowed him to maintain enough depth in the leadership ranks to maintain continuity and position the company for an admittedly brighter 2012.
HP. As much as IBM is an example of what to do, by virtue of its almost unbroken string of recent leadership transition misses, HP has become something of a poster child for what to avoid. Chair Patricia Dunn resigned abruptly in the wake of a 2006 spying scandal. Her successor, Mark Hurd, resigned amid a cloud of controversy over expense account reporting, only to be followed by Leo Apotheker's spectacular flameout after the ill-starred Palm acquisition. Hastily hired CEO Meg Whitman is still picking up the pieces.
These diverse examples reinforce a stark truth for C-level leaders: Plan ahead or risk the perils of chaotic, value-killing transition.
Carmi Levy is a London, Ont.-based independent technology analyst and journalist. firstname.lastname@example.org