Will Elon Musk be able to find Twitter's next successor?
Text | John Rau
At the recent Dubai World Government Summit, Musk said when asked about the succession plan of Twitter's CEO that after ensuring the company's stable operation and financial health, he plans to step down by the end of 2023 and find the next CEO.
Regarding the right way to find a CEO, seasoned practitioners have come to the conclusion that the best chance of appointing a new CEO and empowering him has three stages. To be successful, all three stages must be done well, with the second and third stages being more difficult to do well than the first.
The author thinks that if we compare it with Musk's actual decision-making process, we may find some interesting points.
Stage 1: Match the "must have" qualification background with the job requirements
This is the easiest part to understand, basically all outsourced CEO positions have the same six "must-have" requirements:
Proven experience in achieving results
Ability to think strategically
Excellent communication skills
There is a fit with the company culture
Have excellent interpersonal skills (high emotional intelligence)
Have comparable experience in the past
This particular study on finding the right CEO actually comes from a book I wrote, Secrets from the Search Firm Files. I worked at one of the top five executive search firms in the United States and had access to all of the company's searches for CEOs, presidents, and chairmen over a two-year period.
The partners of the firms participating in these searches ranked a long list of attributes based on how "must have" they were. In addition to cultural fit and past comparable experience, the results were very consistent in terms of three other key skills and the ability to achieve results.
While cultural fit is essentially a Phase 2 issue, given Musk's unique circumstances and Twitter's overall strategy, he must adjust in terms of "cultural fit" and "past comparable experience."
Interestingly, previous "industry-like" experience barely ranks in the top ten in the above attribute rankings. So the "comparable experience" is more about matching the direction Musk wants to take for Twitter than just reiterating the company's status quo. This means they're looking for candidates who have experience tackling a variety of challenges elsewhere, as Twitter will face in the near future.
When it comes to Twitter, the question becomes: How to find a stable revenue model? Does this mean re-establishing credibility with a broader community of users and advertisers? Or is it more to do with becoming a new paradigm for public forums?
Stage 2: Understand the company's corporate culture
Is Twitter simply maintaining its current business model? Will the company shift some focus? Or will it be completely reshaped to match Musk's new direction for him?
Clearly, Musk has focused on finding a new business model for Twitter, and he's ready to take radical action to make that happen. For Musk, the second phase is more challenging than the first is how to match the leadership style of the successive CEO candidate with what Musk's corporate culture will strive to achieve in the coming years.
The study found that all partners in executive search firms convey the same message: companies can easily find successor candidates who score 9.5 to 9.8 out of 10, but the real predictor of a CEO's success is cultural fit, and that's the secret.
To find a CEO who fits Twitter culture, Musk can't rely solely on his instincts. Working with partners at executive search firms, I built a mental model to help calibrate the CEO candidate's cultural fit. It includes two broad categories: decision-making and leadership styles.
Musk should compare his CEO candidate with the corporate culture he wants on every element of decision-making, such as:
More individualistic or collectivist?
Is it more rules-based or people-based?
More cautious or aggressive?
Is it more emotional, intuitive, or fact-based?
Similarly, leadership style has three dimensions:
Is the communication frank and direct, or is it discreet?
Do you prefer choices that look "right" and fit a particular context, or choices that reflect diversity?
Is there more alignment of values or more results-oriented tolerance?
As Twitter's boss and current CEO, he should map out each candidate's position along these seven lines. Only those subset of decisions and leadership styles that drive the culture in the desired direction will ultimately be truly successful.
Stage 3: Manage the handover
Many well-designed CEO succession plans die prematurely because of well-known transition problems. In some cases, current CEOs never actually want to leave, so they unknowingly disrupt the process. For example, Robert Allen of AT&T and Armand Hammer of Occidental petroleuxy, under their leadership, these companies have experienced multiple "successors."
In other cases, the current CEO may choose a friend or close colleague as his successor, even if they don't fit well with the company's culture from the start.
In the case of Disney, in 1995, then-CEO Michael Eisner singled out the so-called "supermanager" Michael Ovitz as his successor, but that choice turned out to be a gross miscalculation of the Disney culture that Ovitz brought to the table.
For public companies, the CEO handover takes many forms. Under the right circumstances, these forms can be successful.
If the successor is an outsider who has been successful in the CEO role, companies often need a quick "baton" plan, with the retiring CEO prominently and quickly retiring from the board and the company.
At the same time, if a successor is promoted from within, companies can often benefit from a "longer farewell" until the successor demonstrates well-rounded management skills and former colleagues accept the new leader. However, the fixed, relatively short term of office of the incumbent chairman is usually an external constraint for a happy ending.
In Twitter's case, Musk is a shareholder, so he's the one the new CEO must serve and satisfy. The most important thing for him and his successor is to agree on the way to work together beforehand and then stick to it.
As for the way they work together, all styles are fine. It could be like Batman and Robin, where the boss chooses the strategic direction of the business and the CEO sets tactical planning and execution; It is also possible that like "Haw Par Bully", when a new challenge arises, the two improvise together. One way that doesn't work, however, is that either of them allows the other executives to weigh between the two of them to get the decision they want. Musk and his new CEO need to show zero tolerance for this strategy and speak out in unison — without exception. Unless a specific issue is clearly defined beforehand, that voice must be CEO's.
Let's take a look at how Musk embarks on this interesting project to find a successor. For the benefit of Twitter, we all hope that he succeeds, reinvigorates the new tweet, and ultimately uses it for public discussion. ■
This article is translated from
https://www.forbes.com/sites/johnrau/2023/02/21/3-steps-for-elon-musk-to-pick-twitters-next-ceo/?sh=57c583ff1b97
Forbes China exclusive manuscript, please do not reprint without permission
Source of the head image: Visual China
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