A Change of Guard

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Friday 4 November 2011

It pays to think ahead before handing over reins

November 4, 2011
The Sydney Morning Herald

WHEN I think of succession planning, I think of the ancient Cambodian city of Angkor. In the 12th century it was a thriving, sophisticated city of nearly 1 million people at a time when London had a population of about 20,000.

Angkorian leaders set about building for the future by constructing more than 1000 temples, including Angkor Wat. They created the largest pre-industrial city the world had seen.

But within a couple of hundred years it was all in ruins. Archaeologists believe they became so fixated on the grandeur of their civilisation that they forgot about securing water for their staple food, so the people left and the jungle returned.

Charlie, who has monument resistance when travelling overseas with his wife, reckons a bowl of rice is worth more than all the temples in Cambodia. He's not wrong and it's a lesson about planning.

In much more recent times, Coca-Cola realised Coke may not be around forever either, so in 1985 changed the formula and brought out the ''new'' Coke.

But it picked the wrong horse and nearly wrecked the brand. It made a quick switch back and then progressively introduced variations with sugarless products such as Coke Zero and Diet Coke.

I'm not sure that the chemical substitute is that much better for you than sugar, but the company managed to secure its future with the new products, plus water, which the leaders of Angkor forgot about.

Coca-Cola now has the major market share in bottled water.

Big-business succession planners can stand back and observe a class act - the royal family. You might ask what that's got to do with business. Well, their business is about putting on a show.

First, they don't believe in swift changes. The Queen is coming up to her 60th year on the throne, close to matching her great forebear, Victoria, who, like Elizabeth, thought a change every 60 years was almost too hasty for the public.

But while maintaining the day-to-day strength of tradition, it's now been announced that the first-born in line for the throne will be crowned - whether male or female. How modern is that!

Of course it won't happen for a while. The next two in line are Charles - talk about being patient - and then his son William. So it looks like the earliest that the new model can roll out will be with the first-born of Will and Kate. On present form, that could be 80 years or so.

Our resident feminist Louise is far from impressed by the timeline for this innovation, but the royal family will still be ahead of at least one public company I know. I recently asked its 70-year-old chairman - who has been in the job for five or six years - what succession plans he was going to put in place.

''None at all,'' he said. ''I'm here for the long term.''

That should make us all think about what's going to happen with our products, brands and companies.

So be bold and start planning today. And don't let useless traditions hold you back. However, remember Angkor - for every temple you still need to produce many bowls of rice.

Harold Mitchell is the executive chairman of Mitchell Communication Group.

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