The Forbes.com headline reads, “With Staggs Out, Disney Investors Left Wondering Why Bob Iger's Succession Plan Fell Apart.” When one person can move a stock price for a company like Disney by 2% over night I call that Talent Risk. We have many clients who are struggling with this problem - key executives playing critical roles appear irreplaceable.
Right now Disney’s answer to losing Staggs is to see if Bob Iger, 65, might stay longer. That should not make investors feel one bit better. The risk is not mitigated; it is only swept under the rug for a short while longer.
What if Disney had a different narrative for Wall Street? Instead of offering another few months or more with Bob Iger at the helm, what if they pulled back the curtain a bit on the “secret sauce” that has made him appear so successful? They could then show how they have top talent in each of the areas in which Bob appeared irreplaceable. What if they had a Knowledge Silo Matrix for their executive team?
We’re doing this right now for a Senior Vice President at a global printer company. This man is a rock star and has been for decades. Everyone is very concerned about his pending retirement including the CEO who routinely checks in with him trying to convince him to stay on just a little while longer. Instead, we’re offering him a plan that allows his company to replicate his “secret sauce” into the head and hands of more than one successor. They may still choose to replace this SVP with only one person but that won’t be required. We can replace the work he does and the role he plays, area of expertise by area of expertise (or as we say “silo by silo”). We can have successors ready for each silo rather than just a person ready to take the job, that is mitigating the risk, not just transferring the risk from one person to another.
Here is the statement that Disney could have sent yesterday:
“While the departure of Tom Staggs is regrettable, Disney manages succession planning in a holistic way so the departure of one executive does not have a material impact on our executive team’s capacity to lead the company. Over the last several years, we have identified Bob Iger’s unique approach to leading Disney that has resulted in our ongoing success. In each of Bob’s areas of expertise we have groomed key lieutenants from around the company who are steeped in Bob’s approach to product development, strategy, planning, finding talent, and decision making. In each of these areas of expertise, Bob has worked tirelessly to prepare the company for his retirement. Disney will draw from this pool of key talent when the time comes for Bob to step down.”
Now, this statement would immediately be followed by questions about who sits on this fantastic list of “key lieutenants” and Disney should be able to provide the names of these folks and the areas in which they have developed expertise under Bob. If they don’t have that matrix of talent, their board and the street should be worried that the loss of Staggs is really a disaster.