NEW YORK, Oct. 16, 2012 /PRNewswire/ -- "Succession is the ultimate test of a board of directors, and the board's role is to create certainty in uncertain times," says Stephen Miles, CEO of The Miles Group, a leadership coach who has worked with hundreds of global boards, CEOs and candidates, on issues of leadership, CEO selection, and transition.
"Battlefield promotions – and that is what the promotion of Michael Corbat at Citi seems to be – signal a lack of continuity and can amplify uncertainty. The Citi board has done a battlefield promotion, given no details around that promotion and then gone radio silent. So they've amplified the uncertainty, and the set of behaviors they've exhibited in this process is unusual.
"We can't predict the events of succession, but we can put the underlying processes in place to deal with those unplanned events. Typically, a company would have a robust, underlying succession architecture that can withstand whatever events happen to a company – a CEO resigning, an illness, a disagreement with the board over strategy.
"That underlying architecture seems to be what is missing here. The COO would be the natural person to take over, in an 'unlikely event of a water landing.' What Corbat is missing, because he wasn't in that role, is knowledge of the top end of the job – the board relations, the broader government relations, the geographical relations around the world, the view of the company from the top seat, all of the things that he's going to be 'battlefield promoted' into.
"Battlefield promotions also signal to the market recklessness, that there isn't an underlying architecture. Regardless of what the event is, and we're always going to have events, we just need to have the processes in place to be able to effectively manage those events. Employees, shareholders, analysts, and all stakeholders really don't like uncertainty. And they punish uncertainty.
"Our job is to create this underlying succession architecture that allows pretty much any event to happen at the top end, so the company can absorb that event and continue to deliver certainty to the stakeholder base. And certainty can be 'You know what, we don't have a candidate and we're going to put an interim person in the role and we're going to run a process.'
"A sense of control is key. The board needs to project to the external environment that there is a process and they are in control of that process. When you lose a sense of control, as human beings, we believe the worst case scenario. If you don't tell us, we're going to make it up. And if we make it up, we're probably going to go to the worst place.
"Part of succession is setting the person you chose up for success."
If you would like to speak with Mr. Miles, please contact Trang Mar or Suzanne Oaks of Temin and Company at email@example.com or 212-588-8788.
SOURCE The Miles Group