The Chinese state has a much longer-term outlook than most Western democracies – an advantage of not having a sudden and pesky change in leadership every few years. In that sense, it is more like a family business, to a democracy’s plc.
Succession is a big leadership issue, whether in family firms or one party states. Chinese leader Xi Xinping has just consolidated his power at the Communist Party’s quinquennial national congress, but the new politburo contains no obvious successors. All the other members are a similar age to Xi.
In family business terms, this would be like the patriarch or matriarch deliberately excluding the next generation from the boardroom, so as to hold onto the reins for longer. The results can be quite disastrous.
Just look at the drama that surrounded nonagenarian Sumner Redstone, whose firm National Amusements owns media big-hitters Viacom and CBS. After being in command for 50 years (stating that he had no intention of dying...), he fell into ill health and his business was wracked by power struggles that looked like they belonged in a particularly far-fetched episode of 80s power-soap Dynasty.
But maybe Xi has a point about not picking an obvious successor until closer to his expected step-down date (2022, though whether that will actually happen, we’ll have to wait and see).
When appointing your heir, you’re also appointing their ‘group’, as author and unexpected family-business successor Andrew Keyt told MT last year: ‘People will have perceptions that they’re either in the in group or out group based on who the next leader will be. If you say it’s going to be a five-year transition and all the people in the out group leave, that could be a negative for the new leader.’
Besides, you actually want to keep your options open, because a leader should be selected based on what the organisation (or indeed, nation state) needs. Things change: maybe in five years, you’ll need someone with a different set of skills or experiences, and it’s more disruptive to tell someone they’re no longer going to be the future leader, than just not telling them that in the first place.
Of course, this doesn’t mean you can only think about succession when the times comes. To avoid infighting and general chaos there needs to be a clear plan for what happens if the leader leaves suddenly, or indeed dies. How the next leader will be chosen should also be well-known and above board. But it does mean there are downsides to being overly formulaic about it.
If Xi were looking for one nugget of advice on succession from the world of business, there’s one lesson he should definitely learn. Leadership is not a solo competition, it’s a team sport. An individual leader can make a huge difference, but if they make it all about them and don’t involve their team or encourage leadership from them, then it can be the wrong kind of difference. How you step back can be just as important as how you step down.
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