Opinion: Leadership and succession

By Simon Slater, managing director, First Counsel Consulting

Contrast the approach to succession management of Jack Welch and our present government (or any government for that matter). The former chief executive of GE made succession his key priority during the last five years of his tenure at the company he devoted so many years transforming. No other imperative came close in terms of importance.

Welch’s great skill was to identify what really mattered in sustaining the success of one of the world’s largest and most profitable organisations. The campaign he embarked upon to select his successor was painstaking in its detail. On the one hand, he identified a number of star individuals within the group and set about grooming them and, on the other, he personally set the performance bar for them in their current roles, from one year to the next, and monitored their progress over a prolonged period. He also involved his main board directors in the process at an earlier stage than was required, simply by dint of good corporate governance.

To begin with, there were as many as half a dozen contenders, but two years prior to his retirement, this number had diminished to three. A year later, there were two, with one of them almost a shoe-in for the daunting job of succeeding one of the most charismatic company leaders we have ever seen. And this was partly the point: Jack Welch knew that the person to succeed him would almost certainly not be a ‘mini-me’; he knew that the right candidate would be the GE executive best placed to take the reins of the company at that particular time and to take the organisation through the next phase of its development. It needed different skills.

It is said that successful prime ministers don’t just leave a legacy; they also groom their parties for opposition. It is difficult to remember the last time this was achieved. Margaret Thatcher and John Major left a legacy, but their party was far from ready to provide effective opposition. And eight years on, perhaps it is only now beginning to do its job. Ultimately, Tony Blair faces the same problem.

But how is it, I wonder, that one of the world’s most successful democracies and economies finds itself with no choice over the person who succeeds the prime minister, and why is it assumed that the baton should be handed over – as if it were an inheritance – to the chancellor of the exchequer? Sure, Major was chancellor at the time of Thatcher’s resignation, but at least there was a contest within the
party to select him. Whether this achieved the right result for the country is a moot point. Was he truly the best man for the job?

I only mention this because as approaches go, it almost makes law-firm succession planning look like best practice.

The largest dozen UK law firms have a combined turnover of £5.3bn (2004/05). When valued recently as brands by Intangible Business Ltd., their combined brand value was £8.9bn.

Twelve law firms – employing nearly 15 per cent of the country’s solicitors – worth almost £10bn: quite a responsibility. And yet all too often firms fail to elect the right partners to leadership roles.

Post Clementi, law firms will need good leadership like never before. The ongoing transition to a more corporate model will require the right kind of leadership and proper processes will need to be deployed in order to identify the right people with exactly the right attributes and skills. Some of the best and largest corporations (your clients), already use a number of quite rigorous methods to help them select the right leaders, including corporate psychologists who are employed simply to advise them who not to appoint.

Sure, the average tenure for a CEO in recent years has been lamentable (around two years), but we are now waving goodbye to the ‘here today, gone tomorrow’, high-profile, outwardly charismatic style of leader. In their place, we are seeing the return of the quietly charismatic leader, the kind of leader who will last the course and inspire ‘followership’ among greater numbers of people over a longer period of time.

Effective leadership is, above all, about having a long-term vision of corporate and societal greatness; it is about stewardship. If I were the chairman of a private-equity house considering taking a meaningful stake in a major law firm, as sure as eggs is eggs, I’d want to use all the tools at my disposal to ensure that we got the right woman or man for the job.

Simon Slater is managing director of First Counsel Consulting. He can be contacted at simon.slater@first-counsel.co.uk