Mack Center Core Team member Saikat Chaudhuri talks about how Apple deftly handled the succession of the recently departed Steve Jobs, a process that begun years ago as the gravity of Jobs’ illness became apparent. Chaudhuri compares the succession favorably to IBM and GE. Both of those companies had legendary CEOs and, when faced with their imminent departure, promoted from within instead of looking to acquire a CEO from another company. This article originally appeared in Time.
Behind the Scenes, Apple Planned Jobs’ Succession By The Book
Succession planning is a mundane but necessary aspect of corporate life. When done well, transitions go smoothly. When neglected, the results can be disastrous.Cases in point: Hewlett-Packard and Yahoo! both recently fired their CEOs without clear succession plans in place. Yahoo! remains leaderless, while former eBay head and failed California gubernatorial candidate Meg Whitman was hastily hired to run HP despite widespread grumbling that she’s not the person to set the tech giant on course.
In January 2009,Knowledge@Wharton, an online journal published by the University of Pennsylvania’s Wharton School of Business, published an article with the headline, “Job-less: Steve Jobs’s Succession Plan Should Be a Top Priority for Apple.” Indeed, the maker of the Mac, iPhone and iPad appears to have done just that, even if its communications strategy was less than ideal.
The succession planning at Cupertino, Calif-based Apple seems to have been years in the making given the seriousness of its CEO’s health problems. The prognosis for pancreatic cancer is grim, though Jobs had claimed that he had a rare but less deadly variant. Concerns about Jobs’ health only intensified after it was discovered that he had undergone a liver transplant and continued to appear gaunt in public appearances.
Though the company may not ever admit this, it seems to have followed the Wharton playbook in choosing Timothy Cook to succeed Jobs. The prestigious business school recommends that companies promote from within and take time to introduce a soon-to-be leader to stakeholders. Cook, 50, joined Apple in 1998. Over the years, he climbed the corporate ladder, serving as Executive Vice President, Worldwide Sales and Operations from 2002 to 2005. He was given oversight of Macintosh hardware engineering. Before becoming CEO, Cook served as Chief Operating Officer, a role in which he was responsible for all the company’s sales and operations. Jobs’ confidence in Cook was apparent at an October 2009 press event when Cook was seen wearing Jobs’ trademark outfit of black shirt with jeans.
Saikat Chaudhuri, assistant professor of management at Wharton, says Cook’s challenge is similar to those faced by IBM CEO Sam Palmisano, who succeeded the legendary Louis Gerstner; and by GE head Jeffrey Immelt, who succeeded the legendary Jack Welch. ”Apple has done the right thing in picking someone like Cook,” said Chaudhuri, who describes Palmisano and Immelt as “quiet doers.”
Cook has stressed that it will take a team to replace Jobs because no one person could do it alone. The open question, then, is whether Cook will be able to assemble a team of executives who, together, can capture the qualities that, as he put it, “made Steve Jobs special.”