9 October 2011

Kenya: Steve Jobs' Death Offers Lessons in Succession Planning


The death of Apple Inc co-founder Steve Jobs offers many lessons in succession planning.

Organisations whose market value is tied to the perceived value of the founder need to ensure that they have a proper succession plan in place.

Companies in fields like technology, where innovation and creativity are critical success factors, need to ensure that their market value is independent from the founder as his exit can affect market value significantly.

Founders whose perceived value affects the market value of their organisations need to be aware of the need to separate their individual value from the company's to ensure organisational survival after their departure.

Steve Jobs took some time off the organisation due to ill health. This alone was of great concern to investors, perhaps because they could not trust anyone else to run the organisation.

Their concern was so much that they passed a resolution to force the board to disclose its succession plans.

This shows the dangers of placing too much emphasis on one individual... the CEO takes a deserved break and the investors start to get concerned.

Jobs is dead. However, he put in place a succession plan to ensure that the organisation survives his legacy. Founder members of organisations, who plan to exit at some point, must ensure that they prepare stakeholders well for their departure.

They should strive to separate their own identity from the organisation's to ensure that it survives their departure.

Founders can do this by identifying a successor early enough, say five years to their exit, and let the successor make some important decisions. He or she must also be allowed to interact with stakeholders and must also be introduced to them as the incoming CEO.

Simply put, the founder must be willing to share the spotlight with the successor.

This will give investors in the organisation some confidence that the organisation will still survive despite the founder's departure.People with technical know-how in an organisation should share the skills with others to ensure that they do not disappear after their exit.

According to strategists, Apple Inc will survive despite Jobs' death, "as Apple troops are trained to think like Jobs even when he is not there... many of the innovative ideas come from the ranks and not from Jobs."

This statement highlights the importance of having a training and mentorship programme in place. A founder with the technical know-how should ensure that successors are mentored and trained to think like him.

The legal risks of a potential successor leaving and using the skills acquired elsewhere can be hedged by using lock-in clauses in contracts.

Steve Jobs handpicked his successor, Tim Cooks.

This was part of the succession plan employed by the organisation. Bill Gates, on the other hand, groomed potential CEOs in the 90s and paved way for the successor of the organisation.

These are strategies that have worked, ensuring that organisations survive founders.

Mputhia is an Advocate of the High Court of Kenya practising with Muthoga Gaturu Advocates.

Copyright © 2011 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.