MEMO TO: CORPORATE CEOs
FROM: PETER BART
Now that all of you are rested from your Memorial Day retreats, I would urge you to perform a simple exercise.
Look around you. Check the next office. Then ask yourself, where is everybody?
What you may discover is that there is an entire genre of executives that suddenly seems to be missing from your corporate pyramid. In former times they went under various sobriquets — heir apparent, protege, even partner. What ever happened to these people?
This question becomes alarmingly relevant if you take a quick glimpse around the corporate landscape.Two high-profile corporate titans have recently undergone serious heart bypass operations — Michael Eisner of Disney and GE’s John F. Welch. Analyze both companies and you realize that, if these executives were to suffer complications from these delicate procedures, neither has anything resembling a successor.
Nor are they alone. Rupert Murdoch runs his sprawling $ 8 billion company as if it were a personal fiefdom. Talk to any senior executive at that company, and they’ll remind you that no one remotely resembling an heir apparent lurks in the shadows.
Who would run CBS after Tisch? Or NBC after Wright? Or Turner after Ted?
Decades ago, gentlemen, it was not uncommon for a corporate leader to designate his next in line. In 1973, Lew Wasserman named Sid Sheinberg as his No. 2. To be sure, the expectation was that, at some point in time, Wasserman would retire, with Sheinberg assuming the CEO position, but, even as Wasserman has edged into his 80s, that has not occurred. Indeed, now that MCA has been acquired by Seagram, the entire issue of who runs what is up in the air.
Bob Daly at Warners set a positive example last year when he announced that he would share power with his heir apparent, Terry Semel. They would henceforth jointly supervise their vast film and TV operations, along with stores and other subsidiaries. This was indeed a felicitous reminder that it was possible, in the highly politicized world of showbiz, for two men to exhibit mutual trust.
ALAS, THAT SHOW OF UNITY has been muddied recently by the rampant rumors that Semel is actively involved in discussions to assume major jobs at rival companies. If those rumors are true, one would assume that the concept of sharing power, at least within the hothouse of Time Warner, may not be feasible.
The situation at Disney was complicated, of course, by the death in 1994 of Frank Wells and the recent departures of Jeffrey Katzenberg and Rich Frank. The tight band of men who ran Disney for a decade had suddenly splintered.
What has Michael Eisner done to fill the power vacuum? Nothing.
The situation at GE, which owns NBC, is equally perplexing. Jack Welch has always been, to say the least, a strong-minded chairman. As with Eisner, his top lieutenants have peeled away. One vice chairman quit to head another company, the second retired. Welch appointed a new vice chairman with the colorful name of Paolo Fresco, but since Fresco is an Italian citizen, he couldn’t qualify as even an interim chief executive because the U.S. Defense Dept. prohibits foreign nationals from running defense contractors.
I could cite other examples, gentlemen, but I think the point is clear enough. None of you are especially interested in the issue of succession. The reasons, I suspect, are varied.
1) Each of you has identified a few hyper-ambitious young men who are angling for the job, and if you elevated one of them, the others might leave.
2) You can’t find anyone who’s qualified.
3) You have intimations of immortality.
These are compelling reasons, to be sure, but I would urge you to reconsider. For one thing, the absence of a successor creates a power vacuum that further politicizes a company. It also makes stockholders and pension funds very nervous.
HENCE, MY RECOMMENDATION: The major entertainment companies should join together to endow a new program for Wannabe Heirs Apparent. The program could have positive educational benefits. There simply aren’t that many people out there who truly comprehend the fast-changing landscape of the global entertainment industry — the techie stuff, the overseas market, the newly emerging ancillaries, etc.
Apart from education, it also would be instructive to put all the young hotshots in one place at one time and see who survives. The program could even be climaxed with a version of Jeffrey Katzenberg’s rafting trip through the rapids — perhaps Katzenberg could even be persuaded to preside. This “Deliverance”-like ordeal would certainly distinguish the men from the boys.
I realize this idea may sound radical, but, who knows, if only two potential leaders emerged intact, that would be a positive contribution. One might be right for Disney, another for GE.
On the other hand, both may be recruited by Michael Ovitz, who, by some criteria, runs the tightest ship in town — one which, before long, might also be in need of some heirs apparent.