Was it possible that Bill Gross’ departure from PIMCo could have ended as a succession success story? Could he have left the legacy of a brilliantly built empire passed on to a successor well-prepared to see it through to its next phase, or was his iconic presence too great to be assumed by any one person?
It often seems that successful succession planning is notable for its rarity. The reasons for this may be as countless as the businesses who fail to make a successful transition. But in companies with particularly dominant founders does an approach like that of Warren Buffett, who has purportedly named key people to succeed him in each role that he currently occupies, make more sense?
Even in smaller, lower-profile professional service firms or small businesses, founders often leave an indelible mark. They are so strongly identified with the company that it is very difficult for successors to take over. Sometimes founders are determined to hand-pick their successor, choosing someone in their own image, but who will be leading the firm at a much different phase of growth. Founders sometimes complain that those within their firm are not “entrepreneurial” enough to take over the business development role. Of course, this is often true: if the successors were truly entrepreneurial they would be starting their own firm, not looking to take over one that was built by another. We also see the other side of this in successors who turn out to be too independent and grow impatient to take the reins. Excellence in diverse skills are needed; skills that may be very hard to find in one individual.
For founders and successors alike, a succession plan that puts the next phase of the firm in the hands of a partnership may give them the strongest chance for success. It more explicitly changes the future dynamic of the company. The founder is not being “replaced” by another individual. They are able to get deep expertise in the areas needed to take the business forward. This may also make transitions more palatable to some founders, as it is consistent with their strong belief, often well-founded, that they are irreplaceable.