The recent press coverage describing the outside versus inside perspectives regarding the choice of a CEO candidate gave me pause to mull on the succession planning process, using Microsoft as a case study.
“In fact, in Good to Great, Jim Collins makes a compelling argument in support of the case that promoting an insider is a key characteristic of great companies.”
According to Professor Joseph Bower of Harvard Business School and author of The CEO Within, the optimal candidate to succeed as a CEO is a person who is “both inside and outside the company”: the Inside Outsider. A dialogue map of an Inside Outsider perspective is shown below.
Leadership as an ongoing relational process between the conductor and the musicians (leader and the followers). Conductors engage in relational leadership processes with the musicians through mutual listening, aesthetic judgment and kinaesthetic empathy. We need to re-cultivate the fiber of moral intelligence — integrity and character — the two crucial elements of courageous leadership.
In response to growing competition and shareholder activism, Microsoft is embarking on a process to build greater collaborative advantage by revitalizing its orchestra of technical talent and an empowered team of managers. A CEO with an inside-outsider perspective is well-positioned to serve as its orchestra conductor.
When I peel the onion of Microsoft’s brand promise “Your Potential, Our Passion” (YPOP), I see the relentless pursuit of the Succession Planning (SP) process etched in the periodic creative interchange between established (current) leaders (mentor role) and aspiring (future) leaders (mentee role) at all levels of the company. Integrating Joseph Bower’s insight, “the mentor is a kind of venture capitalist, teaching potential leaders how to make new ideas work.” For brevity, let’s label this mental model as the YPOP-SP ecosystem (similar to an operating system). By concatenating YPOP and SP, we are able to see the succession planning process is embedded in the brand promise. An evangelist of YPOP-SP is also a cultural architect, who (1) creates a sense of community, (2) brings a sense of enjoyment to exploration and assertion, and (3) pay invaluable attention towards creating a sense of meaning that strives to achieve great people decisions. Increasing the stickiness of YPOP-SP both inside and outside the company allows the Microsoft brand promise to reach its tipping point.
Focusing on walking the YPOP talk, with an SP (Succession Planning) frame of reference, will increase the kinetic energy of the brand, enabling the organization to work collaboratively and compete for the future. From a CxO perspective, it will fine-tune the organizational process to identify and cultivate a credentialized cadre of inside-outside leaders (bench strength of internal candidates who have an outside perspective). This will mitigate the business risk that “there is currently no CEO succession plan in place.”
Next, we need to ensure readiness and grab the marketbuster opportunity (for every revenue-paying customer) by the forelock of her hair wherein a “5% increase in employee commitment leads to a 1.8% increase in customer commitment and a 0.5% increase in financial results.” [*] In order to shift the culture in any organization from “what we value” to “what the customer values,” the journey begins by imagining the goal to “be the employer of choice of employees that our customers would choose.” This creates an opportunity for Human Resources (HR) to focus on outside-in contexts and stakeholders and turn them into inside-out HR practices. We need to take a cue from Jeff Immelt, CEO of GE, who spends 60% of his 100 hour work week on the road. Strategically this implies an opportunity for Microsoft employees to partner with each of its top revenue-paying customers (20% of the customers who represent 80% of the value) and proactively engage in value co-creation by focusing on observation on the front lines, solving business problems, pipeline building, market entry and take-off. In contrast to naively viewing technology insertion as “adhoc dogfooding,” the venturesome consumption of technology innovation uses YPOP-SP as a catalyst for change agents to trigger the desired culture change while achieving speed to market, adoption, usage and profits. [* : study by Huselich, Becker and Ulrich]
In a multipolar world, in order to achieve predictable success, the CEO must also craft a one-firm identity by recognizing the global tilt and managing the tensions across the three business strategy dimensions:
- Adaptation: Increase the firm’s local relevance
- Aggregation: Deliver economies of scale
- Arbitration: Exploit differences between national or regional markets by balancing supply and demand
Orchestrating the incubation and sustainment of the Succession Planning process will enhance the growth engine of both Microsoft and its revenue-paying customers.
Getting onboard the bus in the journey towards revitalizing the Microsoft ecosystem will enable the transformation of the brand promise from a noun to a “verb.”
Documented by Last Mile Resource