Changes in management and leadership are commonplace in large organizations. Established multinational companies often appoint new senior executives for different reasons. These include the retirement of the existing chairperson and chief executive, reorganization and redirection, response to internal or external controversies, and due to mergers and acquisitions, among others.
Organizations would use blueprints to ensure a successful transition to new management and leadership. The past few years have seen several multinational companies embracing a new model of succession based on apprenticeship.
Understanding the Apprenticeship Model of Succession
Nevertheless, the apprenticeship model of succession is both a framework for developing and implementing a succession plan, as well as a model for running an organization under a new leadership. Because it is part of succession planning, it involves an individual training another person to replace him or her in his or her current position.
However, because it is also utilized for overseeing an organization under a new leadership, it involves that individual occupying a new role centered on providing strategic guidance to the newly appointed leader, thereby maintaining some degree of authority.
The model is fundamentally based on apprenticeship. But its application in succession within an organization provides unique characteristics. Several high-profile reorganizations have used this model of succession. Hence, to understand better, consider the example of these companies.
Notable Examples of Organizations Utilizing this Model
Bill Gates followed this model in two instances. First was when he stepped down as CEO of Microsoft Corporation in 2000 and was replaced by Steve Anthony Ballmer while retaining his chairmanship. The second was when he stepped down from his role as chairman and assumed the technology advisory post in 2014 to support the newly appointed CEO Satya Nandella.
Note that Gates remained in two critical positions within his company despite stepping down from two leadership positions. His chairmanship gave him a considerable level of authority over the chief executive while his role as a technical advisor gave him some leadership authority needed to guide the new chairman and chief executive.
The same transpired in Google when Eric Schmidt stepped down as its chief executive in 2011, as its executive chairman in 2015, as the executive chairman of Alphabet in 2017, and as a technical advisor of the same company in 2020.
Another notable example of an organization utilizing the apprenticeship model of succession is Amazon. Jeff Bezos announced in February 2021 that he would resign from his CEO post in the third quarter of the same year. Andy Jassy officially replaced him on 5 July 2021.
Bezos assumed the role of executive chairman at the multinational technology company he founded. He reiterated that he would provide strategic support to the new chief executive and will remain engaged in critical plans and situations. Furthermore, as the chairperson, he would focus his attention on pursuits that would expand Amazon further.
Pros and Cons of the Apprenticeship Model of Succession
There are three characteristics common in business leaders who utilized this model of succession: first is that they are usually founders or co-founders of their organizations who hold a considerable amount of shares, second is an expression of their non-desire to retire, and third is an obvious desire to remain involved in the affairs of their organizations.
Considering the aforementioned characteristics, the following are the advantages of this model of succession:
1. Maintaining a Degree of Control
The mentor-mentee relationship within an organization that embraced a model of succession based on apprenticeship is considerably unique. Despite appointing a new chief executive or other top leadership position, the former leader would assume a critical role that would allow him or her to maintain a level of authority or control. Most of the time, because they own considerable shares or interests over their organizations, their desire for authority and control remains understandable.
2. Focusing on Other Initiatives
Entrepreneurs are visionary. Some leaders who headed successful organizations would want to focus their time and energy on other pursuits that could be related or unrelated to the organizations they founded and spearheaded. This has been demonstrated by Bill Gates, Erich Schmidt, and Jeff Bezos who have business interests outside their organizations and have maintained philanthropic works. However, despite these pursuits, it remained apparent that they wanted to remain active in the internal affairs of the companies they founded with a desire to explore initiatives that could be valuable in their respective organizations.
3. Lessening of Accountability
Another advantage of the apprenticeship model of succession is that it allows a former leader to remain involved and have a degree of authority over the affairs of his or her organization. However, at the same time, because he or she is not the chief executive or a leader tasked to oversee directly organizational affairs, the actual chief executive or leader is ultimately responsible and accountable for the success and failure of the organization going forward.
4. Maintaining Values and Stability
Reorganization through a complete management and leadership overhaul has the tendency to bring forth cultural change that could affect both the established organizational identity and relational dynamics. The presence of a former and influential leader could prevent this from transpiring. A leader who maintains a chairmanship role or assumes an advisory role would allow the newly appointed chief executive or leader to remain true to the established values and preserve organizational stability while allowing a suitable space for growth.
However, because of the same characteristics mentioned above, the following are the disadvantages of this model of succession:
1. Negatively Affects Decision-Making
An executive chairman or technical advisor who holds both a considerable amount of shares and leadership influence in an organization can undermine the authority of the formally appointed leader. This individual can exert too much influence that would affect the decision-making capabilities of the chief executive and other senior executive officers, thereby rendering them unable to utilize their full management and leadership skills and potentials.
2. Can Result in a Power Struggle
Because of its potential to cause conflicts between the designated leaders and the retained executive chairperson or influential advisor, the organization could be divided between two groups that would compete for control. The authority of appointed leaders will further disintegrate if employees will take sides. Remember that conflicts are when two groups with different interests fail to reach an accord. A power struggle can affect the current and performance of a future organization while creating a toxic environment that is unconducive for productivity.
3. Impact of Reduced Accountability
Another disadvantage of the apprenticeship model of succession is that although the mentor can exert control and influence over the organization, remember that failures would be attributed largely to the designated leaders. The mentor would fundamentally be free from leadership accountability, particularly if he or she exerts both control and influence through informal channels. It is important to note that executive officers remain formally in charge of maintaining the day-to-day operations and driving further the ongoing trajectory of an organization.