Apple Inc. has been under intense scrutiny since January, when Steve Jobs, the company’s renowned CEO, announced he would take a five-month medical leave. This heightened response could indicate the pressure other corporations may be under in the future as a result of the economic crisis.
“What you’re seeing at Apple is going to happen more and more,” said Marshall Goldsmith, the author of Succession: Are You Ready? and the co-founder of Marshall Goldsmith Partners, an executive coaching firm.
“There’s a huge bottom-line pressure on corporations, and companies’ boards [and] leaders are under more scrutiny than they’ve ever been in my lifetime. [It’s] very important that disclosure be done as soon as possible [and] as transparently as possible. And when in doubt, you need to share information.”
Many analysts have criticized Apple for being too silent on the topic of Jobs’ health and the corresponding effect on the organization. At the annual shareholder meeting in February, investors had a chance to voice their concerns.
When asked about Jobs’ health, Art Levinson, co-lead director and chairman and CEO of Genentech, said “the company believes it has satisfied all the legal requirements regarding the disclosure of material information,” according to a CNET.com article.
“I’m certainly not privy to any inside knowledge [at Apple], [but] from everything I’ve read, my guess is the CEO and the board said what they thought or hoped to be true,” Goldsmith said.
Apple also asserted that it has discussed succession for years, but declined to make any succession plan public, the CNET.com article said.
Some organizations, however, don’t even talk about succession, as evidenced by the recent upheaval in financial companies.
“If you look at what happened on Wall Street with the departure of many CEOs, many of these organizations did not have a clear succession plan,” Goldsmith said. “One famous CEO, who was fired, threatened to demote anyone who even talked about his succession. Sometimes you get people at the top who are threatened by the entire process. They’re so afraid of becoming a lame duck, they personally prohibit [succession] at the top of the company.”
Even if CEOs support succession planning, it can still be a difficult transition for them to go through.
“It’s pretty hard to give up status, money, power [and] perks,” Goldsmith said. “As soon as you give up your role as a CEO, you become a ‘used to be.’ Didn’t you ‘used to be’ important? Didn’t you ‘used to be’ powerful? Didn’t you ‘used to’ matter? That’s a pretty painful transition to go from ‘I am’ to ‘I used to be.’”
As difficult as the change may be, the learning department can play an integral part in helping the CEO get through the transition, developing the successor and making sure there is a viable pipeline of leadership talent.
“The learning and development community can play a large role in the entire process,” Goldsmith said.