Peter Drucker went on to say that it was a leaders job to ensure that there was an able pool of leaders, at least three, to choose from to take over your position when you move on. In other words it is a sign of failure when an organisation needs to seek a leader from outside. If one looks at Toyota and GE, two of the best run organizations, you will be hard pressed to find a time in their history when the CEO came from outside.
When Welch was leaving GE, the organisation had an embarrassing wealth of talent to choose from, thanks to Welch’s commitment to nurturing his successor. The six possible candidates who did not get selected went on to become part of the GE alumni and are CEOs running successful organisations.
Jack Welch points out that all the obscene CEO payouts for failure result from the failure, in the first place, to have internal candidates capable of replacing the departing CEO. The search and acquiring of a white knight will always come at huge cost in terms of annual pay packet and termination clauses.
You may wish to read an extract from my Winning Leadership Whitepaper, this paper can be purchased from my website.