Leadership succession: Tony Blair, Terry Leahy, Alex Ferguson, Lord Browne … and Steve Ballmer

October 7, 2013

Leaders hailed as the greatest by direct comparison with their contemporaries often leave a legacy that is tough for a successor to deal with

This point was examined recently by journalist Chris Blackhurst [October 3rd 2013] in The Independent. He chose four towering figures from recent years, from politics, business, and sport.

He takes as his thesis that succeeding an influential leader is tough. His point is that the departure may be made with more concern by the leader for legacy than for the organisation’s longer term well-being.

The trigger

The article was triggered by the departure of Sir Alex Ferguson of Manchester United football club which was followed by a poor start to the season for the new manager David Moyes. Moyes was very much Ferguson’s chosen successor, one of clearest examples available of a leader’s critical decision over succession.

At Old Trafford, David Moyes has succeeded Sir Alex Ferguson, only to find that last season’s Premiership champions are in poor shape, that the Manchester United squad requires urgent strengthening. As worrying for United’s fans and owners is that Moyes appears to have been put in charge of a team in torpor. They’re no longer playing with the same drive and hunger that so characterised the Ferguson reign.

Blackhurst makes the general point succinctly:

Beware the chieftain who has been in office for a lengthy period; who is used to getting their way, who only needs to snap their fingers and it will be done; who refuses to countenance stepping down, to the extent that no successor is properly groomed; and when they do finally decide to go, it is too late. Quitting while ahead – it’s the best management attribute of all.

He illustrates with the examples of Tony Blair, Sir Terry Leahy of Tesco, and Lord Browne of BP. He touched briefly on Margaret Thatcher, and might have added Steve Jobs of Apple, and [another very recent example] Steve Ballmer of Microsoft. A closer examination suggests that the situations and the leaders are too varied to provide a nice clean theoretical idea. Was internal selection possible or desirable? Did the leader leave without being forced out? Was the evidence of declining personal abilities to do the job?

Sir Alex Ferguson, for example, announced his retirement a few years earlier and the market value of Manchester United plummeted. The evidence is that he retracted and spent the next few years considering how his eventual retirement might be planned more successfully. He did not ‘refuse to countenance stepping down’, although Margaret Thatcher’s political demise was closer to the description offered by Blackhurst.

Tony Blair was successful in winning three elections for Labour, which he had reshaped as New Labour. His legacy is haunted by his military policy in Iraq. Blair tried but was unable to arrange a successor he wanted. Gordon Brown is seen as contributing to Labour’s defeat at his first election. Sir Alex a close confident of Tony Blair seems to have learned from his friend the art of personal retirement planning with an impressive and rapid entry into the lucrative celebrity circuit.

Terry Leahy at Tesco appears to have selected Philip Clarke or agreed with the decision. Mr Clarke found that the company was in near free fall.

Lord Browne, whom Blackhurst suggested stayed to long at BP, left after personal problems. His chosen successor Tony Hayward was engulfed by the greatest disaster to befall the company.

Steve Jobs left Apple for health grounds, but had some say in the appointment of his successor.

Lady Thatcher had no say in the matter, although her departure opened the way to Tony Blair’s successive election victories.

The dilemma of succession

Succession remains a dilemma for a leader, and for those considered candidates as a successor. The issue has been around for nearly as long as stories have been written about leaders. We should at least be aware of the possibility of the ‘hero to zero’ process, as an earlier and over-generous evaluation of a leader is rewritten.

An example of this can be found in an article in Business Week in 2006 hailing the succession planning in Microsoft when Steve Ballmer replaced Bill Gates. Mr Ballmer’s departure this month [Oct 2013] was told in a different way.


Which Business Leader Said…?

December 16, 2011

Which business leader said: “I’ve had no life for the past two years …”? George Bush? Tony Hayward? Or was it Lloyd’s CEO Antonio Horta Osorio? Or someone else?

The Quiz question

This is your LWD quiz question and puzzle for the festive season. Challenge yourself, or try it out on friends (or enemies, if you aren’t quite in the festive spirit).

The quote continued:

” …The past six months have been particularly lacking in quality of life. It has taken a huge toll on me, and it has taken a huge toll on those around me.”

So what do you think? Was it George, Tony, or Antonio?

Don’t be fooled

The quote may seem familiar, but don’t be fooled …

It wasn’t Tony Hayward

No, it wasn’t Tony Hayward of BP. Faced with the biggest crisis under his leadership, Hayward uttered words that were reported around the world, and were to later associated with his losing his job: “I want my life back back”.

It wasn’t George Bush

It wasn’t George Bush, pictured above. Don’t know what he’s up to, and he may indeed have more time for other things now such as watching President Obama struggle with the dilemmas of leadership…

And it wasn’t Antonio Horta Osarios

And it wasn’t Lloyds bank leader Mr Horta-Osório, who eventually returned to his post after eight days [November 2011] at The Priory medical clinic recovering from the effects of extreme sleep deprivation. According to The Telegraph,

The 47-year old Portuguese banker described the experience of being forced to relinquish his duties on October 31 as “humbling” and said he had to “rebalance” his life to ensure that he did not let things go “too far” again.

“With hindsight, I probably threw myself in too much. Focused too much, with too much intensity and I should have dealt with it differently. This was a humbling experience for me and I took the proper lessons from it. I will do things differently going forward.”

Another hint

Here’s another hint about the unnamed leader who was also reported as saying:

“It was like when the flutter of a wing of a butterfly in the Amazon causes a storm in Alaska,” recalls Mr ******.

The Leader was …?

Who is Mr ******

A special mention will be made of any reader who sends in the correct answer, together with a URL link [use the comments section below].

Special mentions also for creative guesses such as George Bush (pictured above). More about Mr ****** will be published for Christmas [Posting scheduled for December 24th, 2011]


“Crisis. What crisis?” Leaders face the curse of the Callaghan effect

August 7, 2011

Many years ago, the British prime Minister James Callaghan returned from a political meeting abroad in the midst of a financial crisis. He attempted to reassure the public but was damaged with the invented headline “Crisis. What Crisis ?”. It accelerated his downfall. Leaders today still face the curse of the Callaghan effect

The Callaghan story came to my mind this week as the world braced itself for another economic crisis. Or, as the Mirror put it:

Our political leaders holiday while the economy is going down the drain

The global economy is going to hell in a handcart. British jobs, businesses and pensions are on the line. So where are our political masters? Sunning themselves on holidays abroad. It beggars belief that his deputy Nick Clegg and George Osborne – this Government’s real number two – decided to head off on holiday at the same time as their boss [David Cameron]…It beggars belief that his deputy Nick Clegg and George Osborne – this Government’s real number two – decided to head off on holiday at the same time as their boss.

Remember Tony Hayward?

A more recent story is developing about the tipping point in the career of BP boss Tony Hayward. It is now suggested that his demise was in part due to his comment in the midst of the BP oil-spill crisis to the effect that he wanted his life back. After that, his prospects of survival as CEO of BP appeared remote.

You may not remember James Callaghan

The labour Prime Minister James Callaghan was known as Sunny Jim for his avuncular way of reassuring voters. It backfired in 1979 when he returned from an economic conference in the middle of political turmoil. He appeared suntanned and relaxed at a time when the public was suffering strikes and considerable hardships.

In a brilliant headline, the Sun newspaper claimed an early political scalp for Rupert Murdoch. As the BBC recalled much later

“Crisis? What crisis?” Three words that helped bring down the last Labour government in 1979, even though the man generally thought to have uttered them – Jim Callaghan – did not in fact do so. The Sun journalist who fashioned that headline caught the popular impression of a government unaware of a very serious state of affairs which had sneaked up on it.

…and so back to David Cameron, Nick Clegg and George Osborne

The Mirror this week [Aug 2011] has taken a leaf from the Sun handbook for political journalism. The story of insouciant politicians would have been a little more convincing if it had covered the news of a week ago that the leader of the opposition Ed Miliband was also taking a summer break, as were most other political figures in advance of the season of party conferences in September.

What do you say, Sir Francis?

How different from the cherished image of one of England’s greatest military leaders and adventurer Francis Drake. As we used to be taught at school, Sir Francis was playing bowls when news came of the arrival of the Spanish Armada. As the journalists of the day prepared to pen the tale of his preoccupation he remarked that there would be time enough to defeat the Spanish after he had finished his game of Bowls. Doubt is cast on the authenticity of the legend.

His reputation would have been different if the Armada had not been defeated. Even that was less do with Her Majesty’s No 2 naval commander, and more to do with unexpected weather conditions. If the battle had been lost an Elizabethan version of a Sun journalist might have slammed his insouciance rather than praising it, anticipating the Callaghan headline by four hundred years.


BP leadership and the line between determination and obsession

March 24, 2011

Author Shahzad Khan

by Shahzad Khan

John Brown, former CEO of BP wrote in his biography of the dangers of losing balance when ‘determination and enthusiasm turn into obsession’. The outcomes of his leadership and that of his successor Tony Hayward seem to confirm this

BP is a major energy company globally in terms of oil and gas reserves. Its progress has been accompanied by a range of mergers and acquisitions (US Standard Oil Company, Britoil North Sea Exploration Company, ARCO, Amoco, Solarex and Burma’s Castrol.) However, the company’s growth has been accompanied by a number of accidents and safety-related violations which have had tragic environmental and personal consequences.

Lord Browne the deal maker

Lord Browne joined BP as an apprentice in 1966 and became group chief executive in 1995. He was credited for much of BP’s success during his 12 year reign. He is considered a charismatic deal maker. His political connections with head of states were reported as significant negotiations in some of his business deals. Such a high-profile leader is seen as achieving the positive but also the negative results of his organization. Lord Browne was eventually forced to resign in 2007 three years ahead of his planned departure from the company for a personal scandal.

After its merger with Amoco in 1999, the former British Petroleum company was renamed and rebranded with a new Helios logo associated with the Sun God Helios. The media even began to label Lord Browne as the new Sun King.

The rise and fall of Tony Hayward

His favored replacement Tony Hayward was also to be forced to resign. The press seized on remarks cited by Harvard business guru Rosabeth Moss Cantor:

About a week after the April 20 explosion, Hayward was quoted in the New York Times asking his executive team, “What the hell did we do to deserve this?” Recently, he declared that “I want my life back.”

The dark side of charismatic leadership?
.
The patterns of behavior of both BP leaders is similar can be found in discussion of dilemmas of charismatic leadership by the American leadership scholar Jay Conger. Both Browne and Hayward believed in their ‘visions’. Admiration by media and business associates fuelled their charismatic styles. The dark side of Lord Browne as mentioned in his own accounts is that commitment to his vision for the company’s future meant that he ignored day to day operations of the core business activity. Someone noted that he used “I” a lot versus “we” in his book, in reference to BP’s successes. He may also fit a description of a pseudo level-five leader by Jim Collins: someone with an inflated ego presenting or promoting themselves as the most valuable asset for the company. One lesson from these cases may be the danger of letting a vision blind a leader from evidence that things are going seriously wrong at ground level.

To go more deeply

1. Mason, R. (2010). Beyond business: by Lord Browne: a review. The Telegraph
2. Irving, C. (2010). Why is BP’s former boss a UK hero? The Daily Beast
3. Campbell, R. (2007). BP corporate culture lambasted. Thompson Reuters,
4. Salama, A, Holland, W and Vinten, G. (2003) Challenges and opportunities in mergers and acquisitions: three international case studies-Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo, Journal of European industrial training 27(6), 313-321.
5. Kanter, R.M. (2010). BP’s Tony Hayward and the failure of leadership accountability. Harvard business school publishing

6 After the post was written: The Guardian reported that Lord Browne is considering acquiring assets up for sale by his old organization [Editor, LWD].

The case was written from an assignment prepared as past of the Global Events and Leadership module which introduces the Manchester Business School’s Global MBA program. The views expressed are those of the author.


BP’s Hayward goes: How we get the leaders we deserve

July 26, 2010

Tony Hayward, BP’s CEO has been dubbed the most hated Businessman in America in the wake of the Oil Spill disaster in the Gulf of Mexico. His removal was inevitable. But does it make much sense, beyond being a symbolic gesture of a leader falling on his sword?

There is little surprise in the news that Tony Hayward is to be removed as CEO of BP. The BBC’s Robert Peston among others felt that Hayward’s days were numbered from the earliest days of the Deepwater Horizon fatalities. Peston reveals that the BP board had decided that its future would require a new CEO:

Directors also felt that the sacrifice of Hayward should not happen until serious progress had been made on staunching the oil leak and until it was possible to quantify the financial cost of fixing the hole, providing compensation and paying fines. In the last couple of weeks, there has been such progress. And if the moment has more-or-less arrived for BP to start building a post-Macondo future, then it also needs a new public face, a new leader.

The most significant charge appears to be his ‘PR gaffes’.

The demonization of Hayward

Since the Oil-Spill a storm of adverse publicity has been sustained against him. President Obama joined in with remarks in a television interview that Mr Hayward “wouldn’t be working for me after any of those statements”.

Mr Hayward has been demonised as being responsible for the world’s worst environmental disaster – and, let’s not forget, for the deaths of 11 men in the rig explosion that preceded it. Critics argue that, as the man in charge, it is Mr Hayward’s job to take the heat. Nor has he helped his cause with some misguided remarks about wanting his life back and optimistic comments about the clean-up operation. Other public relations own-goals included his refusal to answer questions put to him by a Congressional subcommittee and his decision to participate in a JP Morgan yacht race around the Isle of Wight. END

Leaders we deserve has followed this story closely. The background to Dr Hayward’s appointment in 2007 suggested that he had demonstrated top leadership potential, and had been selected for one of the most challenging of CEO positions with any global organization.

Growing stale in the saddle

CEO tenure remains a complex area for study. Danny Miller’s work is much quoted. He suggests although CEOs may ‘grow stale in the saddle’ that for many organizations, a change of CEO is most likely to take place only as a consequence of catastrophic performance. By generally accepted organizational criteria, Tony Hayward had appeared to making a good start in his job at BP. He declared intentions were to address issues to deal with unsatisfactory operational practices. But should he have been able to put enough changes in place to have prevented the specific errors that contributed to the catastrophe which led to the deaths of eleven people, and environmental disaster

What makes a good leader? How heroes become zeroes

Research into leadership has moved away from universalistic theories. We have stopped looking for presence or absence of a set of properties which differentiate a good leader from a bad one. Even success or failure of itself is insufficient to reveal a simple answer, because all leaders deal with uncertainties and make judgment calls.

In times of crisis, orchestrated anger against a leader builds up. His statements are analysed as evidence of his or her callousness, stupidity, duplicity. The symbolic significance of speech-acts are just as important as physical actions. Sound-bites become replicated in headlines and become elements within a dramatic narrative.

Psycho-analytical models of human behaviour suggest that social groups seek ways of dealing with fear and uncertainty which address inner phobias rather than practical means of overcoming unpleasant circumstances. Under stress and distress group members react as if a leader has betrayed them. According to one text-book such reactions draw on a basic assumption of dependency: a world in which

“The leader is the all-providing and all-knowing saviour who may also become another hate figure”

Lessons to be learned

Under such circumstances it becomes a social imperative to change the leader we have to the leader we deserve. There are lessons to be learned here, about leaders, dilemmas of leadership, and the social processes which result in complex issues being reduced to a leader’s incompetence.