CEO Bob Iger doesn’t have an obvious successor and neither do Hillary Clinton or Matt Lauer. Here’s how to avoid a prolonged succession.
Updated: December 8, 2017
The future of Mickey Mouse is still in the hands of a 66-year-old man.
Bob Iger, the chairman and chief exec of The Walt Disney Co., is likely to extend his tenure at the entertainment company if a deal to acquire film and television production assets of rival 21st Century Fox is approved, the Wall Street Journal recently reported. (21st Century Fox shares common ownership with Moneyish and the Journal’s parent, News Corp.) Iger had originally intended to retire in 2015, but has extended his tenure multiple times, mostly recently this past spring, when he said he would lead the media conglomerate until 2019.
In some ways, this is a happy problem for Disney’s board. Iger’s 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 crown jewel ESPN is under pressure from cord cutters, Disney is also undertaking a strategic shift and pulling its assets from Netflix to create a proprietary streaming service.
But Iger’s expected stay if the Fox deal closes belies a bigger problem: the chairman has no expected successor. 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 Disney’s [current] bench strength,” 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.”
Disney is hardly the only entity to be heavily reliant on one person. Witness the scramble at the “Today” Show to find a new front(wo)man after longtime anchor Matt Lauer was forced out over sexual harassment allegations. The problem also extends to the world of politics where the Democratic Party is trying to find a talismanic new leader after a near-decade under the charismatic leadership of Barack Obama and the domination of the Clinton family.
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.”
This story was updated on December 8, 2017 with news of Bob Iger possibly extending his stay at Disney.
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