UK: ONE-MINUTE BRIEFS - Lack of succession at the top puts companies at risk.

UK: ONE-MINUTE BRIEFS - Lack of succession at the top puts companies at risk. - A crisis of leadership is afflicting some of our top companies. Early this year, Cable and Wireless, EMI, Barclays and Rank were all looking for a new chief executive and exp

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Last Updated: 31 Aug 2010

A crisis of leadership is afflicting some of our top companies. Early this year, Cable and Wireless, EMI, Barclays and Rank were all looking for a new chief executive and experts see the problem as one that potentially will be dogging most companies in the new century.

The difficulty is finding bosses in their fifties and sixties with the right experience to face the new challenges, says professor John Quelch, dean of the London Business School. 'It's an American as well as a British phenomenon. There are so many challenges out there now which chief executives have to address, such as globalisation, new technology, non-traditional team building and leadership, contrasting with the more traditional hierachical view of management,' he says. 'It's not easy finding the right people because of the technology gap, and many lack international experience.

They also have the old-fashioned concept of the chief executive sitting on top of the pyramid.' The issue of managerial style is vital. Some in the City of London see a clash of old and new styles of management as being at the root of the debacle last year at Marks & Spencer between Sir Richard Greenbury and the not-so-young pretender, Keith Oates.

'We are definitely going through an evolution in the style of leadership,' says Glyn Macken, deputy director-general of the Institute of Management.

'On the one hand, those currently at the top can be quite strongly autocratic and decisive. On the other, those working their way up to the top are more collaborative and less coercive. They want to release other people's potential without demonstrating their own leadership too obviously.' Macken cites Alan Jones at TNT as one of the new breed who is 'very co-operative and wants people to be successful'.

Indeed, the Institute of Management's joint survey last year with the University of Manchester Institute of Science and Technology, on the changing experiences of 1,312 managers, underlined the demand today for communication and consultation rather than orders from above. The survey concluded: 'When respondents to the survey were asked what one piece of advice they would give to the board/top-team of their organisations, the clear majority (over 40%) of comments referred to the poverty of organisational and communications and consultation strategies.'

Women may well be leading the way to changing that, however, with what Macken calls 'their softer skills'. As more and more women become managers, the style is more likely to be one of persuasion rather than coercion or autocracy, he says.

Another important issue arising from companies left with a leadership vacuum is that of responsible forward planning by the board. 'When a CEO leaves abruptly, for whatever reason, and the company is forced to look outside for a leader, one should ask why there are no strong candidates within their own management team,' says Ruth Tait, who heads up PA Consulting's consumer retail and services practice and specialises in chief executive and board appointments. 'It is the board's responsibility to have robust succession planning,' she adds. 'And the best of the large companies will have a choice among a few talented senior managers who could do the job.'

If companies fail to find a leader over a period of time, they become high-risk takeover targets. At the beginning of the year, the City put headless firms at the top of the list of bid targets, naming Rank, Cable and Wireless and Barclays among the most vulnerable.

EMI is also seen as a potential target, as it has yet to replace worldwide chief executive Jim Fifield, who left in April 1998.

'We are looking for someone to head the company,' says Jason Crisp, director of corporate affairs, 'but as (Sir) Colin Southgate is still executive chairman, there is no vacuum.'.

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