Succession Planning

“Though both Mr. [VJ] Voshi and Ms. [Ann] Livermore are well-regarded, insiders in charge of a single operation at a huge company often fail to ascend to the highest post because directors don’t think they run a big enough unit to qualify.”

This from a WSJ article [sub. needed] yesterday on who will follow in Carly’s footsteps.

The statement above describes a huge problem in Corporate America and a failure at most companies. CEOs and boards need to have processes in place to develop internal leaders. Voshi and Livermore are perfectly qualified to run HP and one of the two of them are exactly was HP needs right now. The company needs someone who understands the culture and raise the morale of the troops.

I have firsthand experience from General Electric. GE’s focus on creating managers is well reported. Jack Welch’s replacement process started seven years before his retirement. GE has a set of positions that future company leaders go through. You can look at who is on the way up by what people are taking jobs on some the “training ground” businesses. Next you see people taking over some of the smaller businesses. Then a stint in Europe or Asia. If successful, that leads to a leading bigger business when another star is hired away. That is the nature of things there.

If you don’t have the people within the walls of your company that can run it, you are not hiring the right people.