Disney chief executive Bob Iger still doesn’t have a replacement. Here’s how to avoid a prolonged succession.
The future of Mickey Mouse is still in the hands of a 66-year-old man.
The Walt Disney Co. announced this week that Bob Iger, the entertainment company’s chairman and chief executive, would be extending his contract—yet again. Iger, who had originally intended to retire in 2015, is now slated to stay at the conglomerate’s helm until 2019.
In some ways, this is a happy problem for Disney’s board as Iger has presided over a period of great success. His central strategy of buying franchises with a fervid fan base—think Marvel and Star Wars—and developing them further has been a runaway success. “The Force Awakens,” the first Star Wars installment that Disney produced, made over $2 billion at the global box office. Though ESPN is under pressure from cord cutters, Disney’s flagship channel still the most watched cable network during primetime.
“They’re looking for someone who’s taking over a non-failure with very successful moving parts,” says Suraj Srinivasan, a management professor at Harvard Business School. “It’s easy to identify a candidate who can fix problems but in this case, the company is doing so fantastically well.”
Still, there’s risk involved when a company is heavily reliant on one man. Iger was grooming Thomas Staggs, then the chief operating officer, to be his successor. But Staggs left last year, reportedly after Disney’s board wasn’t convinced he was able to fill Iger’s boots. “There’s weakness in their bench strength,” Srinivasan says.
Management experts say that despite Iger’s successful run, the lack of a successor ready to take over is a black mark. “The company is stuck if there’s no one coming up the pipeline,” says management expert Marc Dorio. While plenty of how-to manuals will be written about emulating Iger’s success, the business consultant thinks that there are two lessons one can take from Disney’s succession snafu.
First, create a system in which one cannot be promoted, or receive additional financial incentives, if there isn’t a successor waiting to takeover. “Quality managers develop people under them for their job,” he says. “If someone thinks you’re irreplaceable, you’re stuck.”
This means having a development plan for all executives. “Let them know what the plan is, and then review it regularly,” says Dorio. “Many of my clients have succession planning charts of all the people that can take over a position. If you know people’s weaknesses and potential strengths, you develop bench strength.”
Second, learn when to take a step back and delegate. “Managers don’t generally delegate well because they figure they’re the only people that can do the job,” he says. “But send them for classes and have them work on projects with you. Then, give them more responsibility and decision making power.”
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