You’ve probably never heard of Kasper Rorsted – until Monday I have not – but he turned out to be a very valuable person. Adidas announced that he will resign as chief executive of German consumer packaging maker Henkel and will become chief executive of Adidas in October to replace chief executive Herbert Hainer. Henkel immediately lost its market value of 2 billion U.S. dollars. The small company Adidas immediately gained 1 billion U.S. dollars and the German stock market as a whole fell. All of this is because one person plans to change jobs nine months from now.
When you say that human capital is really important, everyone nods, but it’s easy to forget how important a person is. The most important job for each board of directors is to pick the right CEO, and the most important job for each business leader is to pick and choose who to report to. No one hit the ball on average is perfect. So I learned from the CEO seven lessons on this extremely important responsibility:
– Do not hesitate to change. If you let CEOs – and even the greatest CEO – talk straight out of their biggest regret, that’s always the same: I’ve waited so long to move a wrong person out. Only later will you realize the cost of delay.
– Do not tell yourself that you can guide the person you choose, even if you are not ready for it or do not perform well at work. This is one of the most common rationalizations. It almost never proved to be correct.
– pay attention to people’s way of life. You say this is not strictly related? Yes. It shows the character. Richard Scrushy, a former chief executive of the Ministry of Health, struggled hard to surround himself with a centric son and take a company jet aircraft to the lead singer’s country band to form and manage A female band, need a lot of life experience to see the trouble is possible. Scrushy bribed his federal jail for five years and still owed nearly $ 3 billion to HealthSouth.
– Check the foundation and humility. I once asked Larry Bossidy, the former CEO of Honeywell and former vice president of General Electric Company, how he could tell if the current leaders would do that. He replied: “They do not grow, they’re bloated.”
– Do not hesitate to propose a CEO’s succession if you are a director, or with anyone who reports to you. People who started the conversation often felt uncomfortable, worried that they would be seen as trying to push people out. But the best leaders are happy to talk about the process of developing their successors, knowing that it takes years and that their success will also depend on the performance of their successors.
– Analyze your calendar and see how much time you spend on yourself and those leadership developments and succession plans that report to you. This may not be enough. The numbers I hear from successful CEOs range from 20% to 60%. After all, this is your most important job.
– Never solve. If you are not sure that you made a good choice, then do not do that. Even if you are confident, you may still be wrong. However, if the inner voice tells you something is wrong, please listen.