What the Major Players Know About Succession Planning


And you should, too.

by Chia-Li Chien | Mar. 15, 2015

What the Major Players Know About Succession Planning by Chia-Li ChienIt’s already been 15 years since the 2000 tech bobble. According to the recent CNBC report[1], there are four CEOs who survived the tech bust.

As you can see, the chart on the left shows the difference between the stock prices on January 27, 2000 and February 25, 2015, under these flagship CEOs: Amazon's Jeff Bezos, Starbucks' Howard Schultz, Oracle's Larry Ellison and Cisco's John Chambers.

Columbia Business School adjunct professor William Klepper[1] indicates that the key is how these CEO reinvented the organization over the 15-year span. They were not afraid to take a portion of the company apart and hire from the outside. Most importantly, they were able to meet their investors’ expectations over time and/or create the maximum stakeholder value. Amazon delivered annualized returns of 1990% and Starbucks 544% from 2000 to 2015.

So at what stage is their CEO or employee succession planning now?



•    Safra A. Catz became Oracle’s co-CEO September 2014[2]. 
•    Cisco identified a sales president, Robert Lloyd, a field operations SVP, Chuck Robbins, and services SVP, Edzard Overbeek as “possible successors”[3].
•    Troy Alstead became COO of Starbucks January 2014 as a potential successor[4].
•    Amazon’s potential successors include Andy Jassy and Werner Vogels, but final names remain secret[5].

I call this Triple Bottom Line Succession (3BLS), and it best fits into the Triple Timing (3T):

•    Economic Timing: The overall economic cycle impacts the buying and selling sentiment.
•    Personal Timing: How ready is the owner emotionally, and is the right retirement integration and transition in place?
•    Business Timing: Does your business possess the competitive edge to be attractive in your industry?

Staying ahead of competition and meeting customers’ needs goes beyond employee succession planning. To align with the Triple Bottom Line Succession, a business should have a customer-driven succession plan and an investor succession plan in addition to an employee succession plan, in the private business world.

We leverage the Triple Bottom Line concept to run a business Succession Portfolio (SP) Framework to guide our clients. We help them determine the most appropriate next step per SP without losing sight of the overall well being of the enterprise.

Call me at  (704) 268-9378 for more information about Triple Bottom Line and Timing strategies, and start working now on the right way to transition your business.

 

Reference:


[1] Thompson, M. (2015, February 25). Four survivor CEOs since Nasdaq last hit 5,000. Retrieved February 26, 2015, from http://www.cnbc.com/id/102454873#.

[2] Kim, E. (2014, September 18). Meet New Oracle Co-CEO Safra Catz, The Highest-Paid Female Executive In The World. Retrieved February 26, 2015, from http://www.businessinsider.com/oracles-new-co-ceo-is-safra-catz-2014-9

[3] Noyes, K. (2014, September 19). For Cisco’s John Chambers, a retirement that’s imminent and elusive. Retrieved February 26, 2015, from http://fortune.com/2014/09/19/cisco-ceo-john-chambers-retirement/

[4] Kulikowski, L. (2014, January 29). Is Starbucks' Howard Schultz Setting Up a Succession Plan? Retrieved February 26, 2015, from http://www.thestreet.com/story/12283956/1/is-starbucks-howard-schultz-setting-up-a-succession-plan.html

[5] Darrow, B. (2014, December 7). Amazon’s Jeff Bezos talks succession plan (sorta). Retrieved February 26, 2015, from https://gigaom.com/2014/12/07/amazons-jeff-bezos-talks-succession-plan-sorta/

 

Schedule an appointment with Chia-Li Chien today!

Chia-Li Chien, CFP®, PMP®; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward. Chia-Li is an Instructor & CFP® Program Director at Ball State University and Adjunct Faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Schedule your appointment today!

 

 

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