Believe it or not chief executive officers are human, even CEOs that have attained rock-star status.

From Lee Iacocca of Chrysler, Jack Welch of GE and Steve Jobs of Apple, these names became dangerously synonymous with their company brands. Investors, media, analysts, customers, suppliers, partners and employees couldn’t get enough of them.

But what happens when these rock stars demonstrate their inevitable mortality? What happens when nature runs its course and the meeting with the grim reaper gets closer-and-closer…or actually occurs?

Is it proper to plan for the CEOs demise when she or he is successfully running the ship? It would be foolish not to.

Consider the Stuttgart, Germany sales call made by Texas Instruments chief executive officer Jerry R. Junkins on the morning of May 29, 1996. Junkins suffered a major heart attack and immediately died. There were no prior indications of heart issues with Junkins…and 58 is way too young to pass away.

junkins

The sudden passing of Junkins – maybe not a rock star, but certainly beloved by all who knew him at Texas Instruments – required a middle-of-the-night, all-hands-on-deck fire drill. The TI Board of Directors held an immediate conference call, designated Vice Chairman William “Pat” Weber as the interim CEO and started the process of searching for a new chief executive. The Investor Relations Department contacted the NYSE and asked for trading on the company stock (NYSE:TXN) to be halted until the Street had proper time to digest the news. They also made the necessary 8K filings (material event) with the SEC. And of course, the PR Department prepared the necessary news release and conducted media briefings announcing to the world Junkins’ passing, the selection of Pat Weber as the interim CEO and the upcoming search process.

Eventually Texas Instruments started trading again. Weber and the TI team picked up as best as it could for Junkins. And the board eventually selected a permanent CEO Tom Engibous. The key was that TI had a deep bench and a plan for succession…and that plan has been a classic example of successful crisis communications.

Many have wondered if the same would apply to Apple with its rock star CEO Steve Jobs when as the Economist headline stated, “The minister of magic steps down?” The answer so far is favorable to Apple…at least judging by the performance of the company stock (NASDAQ: AAPL)

The stock closed last Wednesday at $376.18 just before the company announced at the close of market that Jobs was going to permanently step down because of health concerns. AAPL opened at $365.08 on Thursday and closed at $373.72. The equity finished the week at $383.58 or $355.6 billion in market cap, actually higher than before the announcement of Jobs’ stepping down as CEO. Why was that?

One reason may be attributed to the fact that Jobs’ health concerns are not new to the Street and his eventual demise may have already been baked into the stock. He has taken medical leave three times, once for pancreatic cancer surgery and another time for a liver transplant. In his stead, Apple’s chief operating officer Tim Cook has assumed the leadership role three times and the Apple board is impressed as The Economist describes with his “remarkable talent and sound judgment in everything he does.” Jobs remains as chairman.

jobskeynote

So obviously Texas Instruments performed well in a fire-drill, aided by advance planning. Likewise, Apple (so far) has not been negatively impacted by the still-shocking-news that Jobs has relinquished the day-to-day responsibilities of running Apple.

Taking these two examples of well-executed CEO succession and others that come immediately to mind, what are some public relations/branding strategies to plan for an effective transition, thus preserving the company reputation and continuing to enhance brand equity?

Repeatedly Contemplate Succession. Even though “succession” is a very touchy subject in most companies, particularly for long-time CEOs nearing retirement and who detest the R-word, you still need to think about this inevitable day. The board of directors will make the call, but you need to cognizant of the strengths and weaknesses of all of the company’s executives. There is a good chance that one of these will serve as the chief executive at least in an interim capacity.

Put Your Bench Players Into The Game. Think of your CEO as the team head coach and the key executives as the assistant coaches. CEO time is valuable. Does the CEO have to be made available for every media interview or every financial conference? It makes perfect sense to show off your upcoming Wunderkindern. This technique also gives you an opportunity to assess who are your best performers before media, analysts, employees etc. in telling the company story. There may also be cases in which the CEO is not available or the EVP or VP may have deeper insights into a particular facet of the company’s business.

Have Your Facts Straight in Advance. Always have a complete bio and background materials at your ready disposal just in case the CEO suddenly passes away or steps down. Maintain a similar repository of information about the other key executives, particularly if one of them is selected as the interim chief executive. Be familiar with the workings of your board of directors and HR Department and understand how they make decisions.  Be ready to learn as much as possible as fast as possible, if the Board of Directors goes outside the family to select a new chief executive.

Never Say Never.  At LSI Logic, we maintained a policy of never engaging in a public discussion of the internal working of the company’s Board of Directors. We made one exception. When it came time in 2005 for Chairman/CEO Wilf Corrigan to step down at 67, we wanted everyone to know that he had been working with the board on his succession for two years. Our strategy was to head off at the pass, any speculation that his retirement as CEO was anything but an orderly process involving both Wilf and the board.

Second-Person Plural, Not First-Person Singular. The best chief executives never use the first-person singular in their internal or external communications (Me, Myself, I). Instead, they employ the second-person-singular (We, Us, Our) to emphasize the team that makes the company’s success possible. The same applies to company chief lieutenants as well. If there is more of a team culture, rather than a cult of personality, it makes it just that much easier to eventually continue business as usual when the time comes for a CEO to move on or the Grim Reaper comes-a-calling.

http://finance.yahoo.com/q/hp?s=AAPL

http://www.nytimes.com/1996/05/30/us/jerry-r-junkins-58-dies-headed-texas-instruments.html

http://www.ti.com/corp/docs/company/history/timeline/key/1990/docs/1996junkinsdies.htm

http://www.ti.com/corp/docs/company/history/junkins.shtml

http://en.wikipedia.org/wiki/Lee_Iacocca

http://www.businessweek.com/1998/23/b3581001.htm

Advertisements