Why Agencies Need Shrewd Succession Planning

In her 2020 book, Who Comes Next? Leadership Succession Planning Made Easy, Mary C. Kelly argues a lack of leadership planning is "the next business crisis." "The past few years reminded us that no one will stay forever in the same job. Leaders get promoted or retire. It's inevitable," she wrote. And in the more than three years since those words were published, the CEO revolving door has continued to swing. This year alone, Visa upped longtime president Ryan McInerney to CEO, embattled retailer Adidas named Puma executive Bjørn Gulden its CEO, and CNN replaced Chris Licht with former New York Times CEO Mark Thompson. Tony Spring will be Macy's new CEO in February, a succession announced 11 months prior to the planned turnover. A year ago, Bob Iger returned as Disney's CEO. And just last month, OpenAI fired its CEO, Sam Altman, only to see him return days later. According to business support platform Mind Tools, more than a third (34%) of externally recruited senior executives fail compared to 24% of internal hires, suggesting that long-term planning and development is important to producing credible candidates. The same research also found only 32% of businesses had a CEO succession plan, and 15% said they have no succession plan at all. The marketing industry is a different kettle of fish when it comes to the need for succession. Advertising agencies are people-based creative jobs, which makes a preplanned route to the top vital to avoid disturbing the established culture. A structure for progression The world’s largest agency network, WPP, is strengthening its potential succession pool of candidates with the appointment of Lindsay Pattison as global chief people officer. Pattison has spent more than two decades holding leadership roles within the group, gaining crucial media leadership experience in her role as CEO of WPP's Maxus Global. Pattison now holds a seat on the executive committee and could be set to follow a similar path to current IPG CEO Philippe Krakowsky, who held a comparable job within that network not so long ago. For Marc Nohr, former CEO of agency network Miroma Group, this strategy is undertaken by forward-thinking boards. "It's enlightened self-interest for boards to ensure that there is a succession strategy in place. That's good corporate governance," said Nohr, who added the real work is often done by the current CEO. “The truth is that these decisions aren’t really made by boards,” he said, adding that a "farsighted" chief executive will build a team around them from which their successor will emerge. Internal over external Maurice Levy, now chairman of Publicis Groupe, was instrumental in choosing his successor, Arthur Sadoun, to CEO in 2017. "We know that a successor coming from outside the company is always a disruption, which is welcome when the company is in crisis but unwelcome when the company is doing well because it generates a lot of issues," Levy told Adweek. "You have to wait to understand the company, the culture, the difficulties, and you—most of the time—waste between 12 to 24 months [once in the role]." Sadoun had been with Publicis for 11 years before taking on the CEO role. One of the important things is that you need more than one [candidate], and to have them inside your company. —Andrew Robertson, president and CEO, BBDO Worldwide It was Levy's succession planning that led to the creation of Directoire+, an internal pool of senior executives who could be groomed for the top job. In the years prior to the appointment of Sadoun, another successor had been identified and was being prepared to step up. But the board and nominating committee ultimately rejected this person. "I know too many former CEOs who were looking at the first steps of the successor and saying, ‘I’m not sure I would do things that way,’ and that is the worst thing that can happen," Levy added. Robin Bonn, founder of management consultancy Co:definery, has seen people rushed into leadership positions too soon before they have the experience and understanding of managing and motivating a team, not to mention the pressure and time the job demands. “It's not like back in the day when you could demand discretionary effort from people by giving them a free pizza when you need to work overnight on a pitch. But that kind of hamster wheel thing, it's not something that younger leaders are willing to accept,” he explained. The Modern Agency CEO Must Lead With Empathy BBDO Worldwide president and CEO Andrew Robertson oversees a network of global agencies, most with their own CEOs based all around the world, hiring around 15,000 employees, with many locations led by country CEOs. “If you've identified somebody you think could be a potential successor for a key role but they're working in another agency, then what we expect to do the next time we review these plans is say, ‘Well, where are you on trying to bring that person into the company?'" Robertson said, who has implemented a “Drop Dead Succession Candidate” rule for every CEO to identify three candidates as part of the potential next generation of leadership. "One of the important things is that you need more than one [candidate], and to have them inside your company, because the more experience they have of you, and you have them, the more likely it's going to be a successful succession,” Robertson explained. Levy also offered advice on the transition stage when a new leader begins to step up and take control of the business. “The duty of the board and the duty of the former CEO, should they stay or not, is to make sure that transition and succession is working well," he said. "The board has a huge responsibility, and they must entrust the successor. They must give room for mistakes. They must give the time for proof, and the former CEO has to pave the way and feel responsible for the success of the successor." This story is part of the Connections and Collaboration special feature.