Well… Er… That wasn’t what we expected…

Hahahahaha – BadConsultant is back from an extended sabbatical, where he has enjoyed long days and sultry nights, the comfort of family and friends and complete avoidance of anything resembling a corporate 9-to-5

[you should definitely try it some time]

Refreshed, relaxed, rejuvenated.

So…

This isn’t a post about BP. Well, maybe just a little.

BadConsultant has been reading and learning a lot about randomness this past year, and the consistent delusion our fore-brains maintain that randomness doesn’t apply to us.

We kind of understand that there’s a thing called chance or luck or fate or any other term we apply to it. But, like it or not, when we sit at a roulette table in a casino watching the last twenty numbers or so on the board behind the croupier, we all see patterns – red/black, even/odd, clusters and shapes – we all do it. And then we make the cardinal error of believing the pattern we perceive in the past

[which is a delusion itself]

will extend into the future. We place some chips on our predicted number.

  • It wins – our pattern was correct, we are master of the odds – we keep following the pattern, continuing disbelievingly when the pattern breaks down.
  • It loses – well we’ll try just another time – because no-one wins 100% of the time, do they?

Either way, we lose money.

Because the pattern never existed.

So, to BP. Which, if you hadn’t noticed, just presided over one of the worst environmental spills in history.

The whys and wherefores of which are not the point of the post.

The point is the announcement, from January 2007, at this link: BP Announces Lord Browne Succession Plan.

Let me summarise: lengthy-tenured CEO retires, experienced long-tenured exec ready to fill the position. New guy has global, multi-divisional experience and is very shiny. To quote from the link, the BP Chairman said:

“It is a testament to John’s managerial skill that BP is blessed with having such an impressive managerial top bench to choose from and John and I are delighted to be able to announce that Tony Hayward will be succeeding him from August 1, 2007. Tony has an excellent track record and extensive knowledge of the sector and will be able to draw on John’s wealth of knowledge over the next six months.”

[Blessed, note… Blessed!]

Well, Gulf of Mexico… How did that turn out for you?

Then there’s the opinion piece at this blog: BP Plc gets its succession planning wrong.

Let me summarise: promoting from within at BP was wrong, but at the supermarket chain, Tesco, it’s ace! Tesco develops great leaders from middle-managers but BP doesn’t.

Except BP say that they do in this document: BP Sustainability Reporting 2009 Our People.

And, it would appear, Tesco did what BP did: Tesco Board Succession Plan.

I hardly need summarise, but here’s a quote:

I am delighted Phil Clarke has accepted the role of CEO from March 2011. I have worked with Phil at Tesco for many years and I am confident he has all the necessary talent, energy and experience to take the group forward. He will be supported by an outstanding team of senior executives who together represent one of the strongest leadership teams in the world of retailing.

Well, low-middle income families in the UK, how’s that working out for you?

So, BadConsultant, what’s your point?

[That’s a great question, so glad you asked, let’s move on to my next slide]

Both BP and Tesco are delusional, they are looking at historic experience, inferring a pattern and building plans for the future based on that pattern.

The primary delusional indulgence of succession planning?

What’s succeeded in the past will bring success in the future.

Now, believe me, there is every reason to weight that as a high probability. But it’s not an absolute. And profiling existing leaders’ historic success so that the same capabilities can be developed in the next wave is… erm… delusional.

How many succession plans are built with a variable set of

[spit]

competencies based upon possible future scenarios? What weight is given to those possible future scenarios?

When Tony Hayward was selected for succession, 1) where was the assessment of his capability to deal with a major environmental breakdown?; and 2) what was the likelihood placed on such a breakdown happening?

I’ll help you out: 1) probably didn’t happen; and 2) less than 1%.

Because when they looked at Tony Hayward’s track record – maybe pulled up his performance reviews and ratings, or spoke with his HR rep – everything in the past was hunky-dory; and, besides, anyone with a history of having a cataclysmic failure – even if successfully handled – wouldn’t ever have a hope of becoming CEO, now would they?

So to BadConsultant‘s question of the day – when you look at your succession plan, how robust is it to things that you can’t predict? More importantly, have you ever asked yourself that question?

Or are you just building another delusional data set that supports the illusion of hunky-doryness?

Peace Out

BC

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