Over the past 20 years, Carlos Ghosn has become one of the most successful executives in automotive history. In 1999, the then-CEO of European car company Renault rescued Nissan, orchestrating a two-way stock trade that left Renault owning 44.4% of Nissan. In 2017, Nissan acquired a controlling interest in Mitsubishi, pulling all three companies together as “The Alliance”. At this point, he’s turned around so many companies that his nickname is Mr. Fix It.
However, Mr. Fix It is now sitting in a Japanese prison, and nobody is sure what will happen to The Alliance or any of the three companies in it.
Carlos Ghosn is the perfect example of the Brilliant Autocrat – the person whose reputation is so pristine that they quickly vacuum up all of the power in any situation they encounter. And like most autocrats, he wasn’t afraid to use that power. This is a problem: if nobody in an organization can question someone’s decisions, some really bad ones are inevitable. But what happens when a benevolent autocrat becomes less benevolent over time?
It’s not entirely clear why Ghosn is in prison, but it’s beginning to look a lot like fraud. It emerged on Thursday that he has admitted to signing papers acknowledging underreporting his pay to tax authorities. There’s likely a lot more to it than tax fraud, however – much of Nissan’s executive team resented his power over the company, and they’ve pursued an internal investigation against him after suspecting wrongdoing.
In fact, there’s plenty of resentment to go around The Alliance. The problem was that it never really was an alliance – it was three independent companies who were forced to work together by a person with enough clout to make that their reality. With Ghosn gone, there’s nobody to mediate the disputes between the companies. There’s also nobody to prevent the mutually destructive sniping that’s already taking place. These companies’ fates are tied together – through ownership, shared platforms, and more – and that fate was wholly driven by a single individual.
How many people would have to be unable to work at your company before it was in jeopardy of collapsing? If the answer is “one” or “two,” then you’re probably putting the lives of your employees (and the fate of clients that rely on your services) in more jeopardy than you should be. Is there a plan in place to deal with a long-term absence of the CEO and/or CFO? Do key players know their responsibilities in this situation? Would front-line employees trust the company’s stability long enough to hang around and help see the company through the crisis?
If not, here are some resources to help you with succession planning. A dated-but-still-relevant article from Forbes highlights four steps for proper succession planning. Robert Half has a quick article on the steps to success for a succession plan. Workforce has a piece providing more detail on a succession plan, and providing examples from McDonalds and Fluor. Finally, a Forbes contributor also points out that succession planning needs to consider more than just the executive suite.
Most companies have no qualms about a backup system for critical business data on their servers, because they understand that without their historical data it would be nearly impossible to run the business. Succession planning has a lot in common with data backups – except your leadership provides much more to your business than just data. Whatever their contributions – to strategic planning, business relationships, employee confidence, workplace culture development, or other areas – make sure your company has a backup plan to restore those things quickly.
To learn how WingSwept can help your business build long-term success, call us at 919-779-0954 or email us at Team_WingSwept@WingSwept.com.