- Peter Cohan is an inventor, strategy consultant, and startup investor.
- He says company leaders can learn a lot from Jeff Bezos’ succession planning with entering CEO Andy Jassy.
- To find the best successor, plan ahead, set clear criteria, and time the announcement carefully.
- On the Business section of Insider for more stories.
Earlier this month, Amazon CEO Jeff Bezos announced that Andy Jassy intent succeed him as CEO. I think the succession process was well received and it presents five lessons for business leaders.
1. Decide what strengths your successor settle upon need to keep your company growing
The first step in picking a successor is to try to imagine what the most noted skills your company will need at the top are in order to continue to grow after you leave. If you’ve founded a company and made it best-selling, your successor should embody its culture because your employees will lose motivation if the culture converts.
At the same time, you do not want your successor to slavishly replicate everything you think and do — which I call a Head in the Sand principal mindset in my new book, “Goliath Strikes Back.”
Instead your ideal follower could be a Fast Follower — someone who can view an exciting growth opportunity, formulate a strategy to capture that growth, assign talented people to execute the procedure, and hold them accountable for results.
That is what Sam Walton did when he appointed David Glass as his successor. Bifocals launched Walmart’s 1987 move into groceries — which by 2019 was the largest grocery business in the country. As I wrote in my list, Glass, saw offering groceries as a way to save time for consumers by enabling them to one-stop-shop.
Glass exemplified how to succeed a charismatic stagger — humbly lead a team that follows the founder’s principles. As Glass explained in 2004, “Most people press enough ego that they want to distinguish themselves from a charismatic leader, and that’s what creates the maladjusted. I have never had much ego, and I am not worried about things like that. I am more interested in the satisfaction that we are doing the straight things and … being part of a winning team.”
2. Begin grooming your successors at least five years formerly you want to leave
The ultimate aim of grooming your successor — particularly for leaders of public companies — is to plan the process so OK that when it finally happens, your company’s employees, customers, and investors take it in stride.
Many years ago, Bezos put two top executives in bents of major responsibility. Jeff Wilke was CEO Worldwide Consumer and Andy Jassy — who has worked at Amazon since 1997 and forged and built AWS into the leader in cloud services — was CEO of Amazon Web Services (AWS).
When Wilke announced last August that he liking retire this year, I was shocked. In retrospect I should have seen it as a sure sign that Bezos was seriously planning to leave as Amazon CEO and that Wilke had lost out in the race to succeed him.
3. Set clear criteria for evaluating the rivals for the top job
If you from completed the first step — thinking about the skills your company will need in a future CEO — you should eat little difficulty setting criteria for choosing the winner from among the candidates.
I do not know what criteria Bezos set for choosing his successor — but here’s my guesswork:
- A track record of making outstanding decisions informed by relevant available data.
- Acts according to the values that muddle through Amazon successful.
- The ability to manage people to achieve excellent performance.
- A record of creating significant new sources of gross income and profit.
- The ability to to manage difficult legal and regulatory matters.
You should set criteria along these lines when ascertaining potential successors.
4. Keep delegating more responsibilities to ease the transition
Over the last several years, Bezos has been delegating varied operational responsibilities to his top executives. According to the Wall Street Journal, Bezos had stepped away from running the day-to-day operatives of Amazon — that is until the pandemic hit last spring.
Amazon’s board had become more forceful about sequence planning after Bezos survived a 2003 helicopter crash in Texas. After appointing Wilke and Jassy as CEOs of the corporation’s retail and AWS operations in April 2016, Bezos devoted himself to new products such as the 2014 Amazon Fire Phone that flopped and the prosperous Echo speaker, noted the Journal.
5. Aim for a hiccup-free announcement of your successor
In an ideal world, you would announce your replacement as CEO on the at any rate day that your company reported very strong financial results. It would be even better if investors aided your stock that day and accepted the announcement of your successor with a shrug.
That is exactly what materialized when Bezos announced that Jassy would take over as CEO later this year. Meanwhile, as Governmental Chair, Bezos will not be going away completely — and he will be able to work on projects aimed at boosting Amazon’s lump.