Chain of business succession

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I finished reading a book “Chain of Business Succession” by Shinichi Matsuda, senior consultant in Nomura Research Institute, last week. He analyzed relation between term of office of company presidents and enterprise growth measured by at the modified market capitalization and found a strong correlation that the growth companies beyond the terms of presidents have kept’ office haven’t frequently changed directors during the presidents’ term. It helped to create a sense of collective management by the same viewpoint with the top leaders.

 

The longer a period that the term of a company president gets, the more the management experience gap between the president and other directors expands. As a result, the directors try to look at the president face and seek his/her intentions. Directors in many Japanese companies are thought to be a final position that they reached as a result of their promotions at departments they have belonged to. If the management experience gap expands, the other directors tend to protect the benefit of the departments. It’s not what they should be as corporate managers.

 

No top leader can lead the company with only his/her perspective in the era that the change is drastic. All directors should make a consensus of corporate vision and strategy by taking enough time, and it’s necessary to talk to employees the vision they shared with other directors by their words.

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