[FOUNTAIN]Picking a new bossIn 1980, Jack Welch, one of the candidates for the chief executive position of General Electric Co. , was worried about his age. Among the three candidates, Mr. Welch was the youngest at the age of 44; his competitors were 50 and 58.
Mr. Welch later said he had even thought that he would propose to give up the job of the chief executive after ten years. But he abandoned the proposal on his friends’ advice. It seems that even in the United States, which is said to be a society where ability is regarded as the most important virtue, there are times when age matters.
But Mr. Welch was a prepared candidate regardless of his age. He went through a tough competition after Reginald Jones, Mr Welch’s predecessor, started to recruit his successor in 1974.
Mr. Welch, who made GE one of the world’s top enterprises, selected his successor in a similar way as the competition that won him the chief executive’s job. He picked 16 managers from the company in 1994 and tested them rigorously. Jeff Immelt, the winner of the competition, was appointed as the new chief executive in late 2000.
Succession models are of two general types: the first is a “horse race” style and the other is a relay. GE used the first of these models. An example of the latter is found in the Coca-Cola Co. Roberto C. Goizueta had taught Douglas Ivestor from the mid-1980s and handed over his chair in 1997. Though Ivestor stepped down as the boss of the company only two years later, analysts said that they could not tell which system was the better way. But the common opinion among the analysts was that every company should try to enlarge its pool of talented personnel.
Sanford Weill, the chairman and chief executive of Citigroup, recently announced that he would turn over the chief executive’s job to Charles Prince next January. But Mr. Weill said that he would stay on as chairman of the group until 2006. While some criticize the move as an extended regency for Mr. Weill, the majority seemed to agree that it will provide a safety net for Citigroup’s gradual change.
As is clear from the examples of the companies above, the selection of a successor is one of the most important jobs of a chief executive. The above examples seem far different from the recent selections of the chairmen of Korean banks. They only could decide on the candidates just before the general shareholders’ meetings.
by Lee Se-jung
The writer is a deputy business news editor of the JoongAng Ilbo.