Q&A: CSU professor who studies leadership changes in real-world businesses talks ‘Succession’

Succession characters

Photo courtesy HBO.

The HBO show “Succession” might be intentionally dramatic, but that doesn’t mean there isn’t intrigue when actual businesses go through big leadership changes. 

Jonathan Zhang, an associate professor of marketing in the Colorado State University College of Business, has studied what happens when companies create succession plans for key executives. 

Ahead of the series finale of “Succession” on Sunday, he discussed his research, how the Roy family dynamic differs from real-world business and the importance of preparing the next generation of business leaders.

SOURCE: What in “Succession” is most similar to what you’ve observed in real-world business, and what is the most different? In real business situations, is it ever as messy as it is in Succession? 

Jonathan Zhang

Jonathan Z. Zhang is the Dr. Ajay Menon professor in business at CSU and is an affiliate faculty of CSU Data Science Research Institute. He teaches marketing strategy and quantitative business analytics in the graduate programs.

Zhang: Many viewers draw parallels between Logan Roy and media mogul Rupert Murdoch and his progeny. Another example that came to my mind that resonates with the show’s narrative is the merger of traditional media group Time Warner with internet company AOL during the peak of the first internet bubble in 2000. Surprisingly, the younger company AOL acquired Time Warner, reminiscent of the Gojo-Waystar Royco deal in “Succession.” 

From a business perspective, it’s not uncommon for traditional, aging giants to merge with new tech companies to leverage their technology and innovative appeal. This strategic move helps reposition the older firm as an attractive, modern enterprise to younger consumers and Wall Street analysts. Thus, these plot elements from the series are rooted in reality. 

Founders often have a strong emotional investment in their companies, which, combined with ego, can make relinquishing control challenging. If a leader is open to new ideas and perspectives, the company has a chance to adapt and thrive. However, prolonged tenures can consolidate power and foster a culture of yes-men too intimidated to challenge the status quo, as seen in “Succession.” When the leader is eventually ousted due to poor performance, the damage to the company can be extensive, and internal successors may not have been adequately prepared to take the helm.

So, can real-life situations be as chaotic as portrayed in “Succession”? Absolutely, ego and autocratic leadership style can lead to messy scenarios.

However, a significant departure from reality is the excessive use of profanity and the frequent uncontrolled emotional outbursts exhibited by the Roy children in “Succession,” as well as the substantial amount of abuse tolerated by the senior executives. I would imagine these elements are placed to heighten the drama for the show – it is unfathomable to envision such behavior being as prevalent in professional settings, particularly within such a large publicly traded company.

How do the events that happen in Succession line up with what you learned researching CMO succession plans? 

Succession planning, especially for senior leadership roles, is vital for the future trajectory, reputation and performance of an organization. A new generation of leaders can shape the company’s culture, strategies and product line-up, bring different leadership styles, and offer new competencies. These changes can substantially impact the company’s image, the kind of employees it attracts, the range of products/services it offers and the customer base it serves.

Our research into chief marketing officer succession plans studied over 1,000 CMO successions across 400 public companies over a 13-year period. We examined the types of CMOs, their backgrounds, skill sets and the subsequent effects on firm performance, including sales growth. Our findings reveal that companies often replace the CMO during periods of poor performance relative to competitors, a plausible move if the incumbent CMO isn’t delivering the expected results. 

When selecting a new CMO, it’s essential for a company to consider its current performance status. Our data suggest that if a company is underperforming, hiring a CMO from outside can more effectively improve the company’s performance by bringing fresh perspectives and strategic visions. Conversely, when a company is doing well, promoting from within is usually the best move, as an internal successor is more likely to maintain the successful course with incremental improvements. An outsider could potentially disrupt a functioning strategy.

We also found a trend towards CMOs with strong data and analytics understanding, those capable of developing customer-centric strategies, which usually results in significant performance improvements. This reflects the growing importance of capabilities at the intersection of marketing and technology.

High-profile successions, such as CEOs, display similar patterns. For instance, Microsoft was performing well when CEO Steve Ballmer left, and the company successfully promoted long-term insider Satya Nadella. In contrast, Nissan, on the brink of bankruptcy in the late 1990s, recruited Carlos Ghosn, an outsider who is not Japanese—an unusual choice in Japan’s corporate culture. Ghosn’s drastic measures helped save Nissan from bankruptcy and boosted its financial performance.

However, we have observed several mismatches, where outsiders were hired when the company was already on a successful trajectory and insiders were promoted during crisis periods, often resulting in performance decline. We believe our findings could assist organizations in better succession planning.

The HBO show “Succession” presents a scenario wherein the family patriarch and CEO, Logan Roy, having led the Waystar Royco conglomerate for decades with a firm hand, gradually loses touch with the changing times. His product offerings, management style and even his vision for the company become outdated, leading to slower growth and dwindling valuation. 

The next generation, equipped with new ideas, capabilities and networks, is prepared to enhance the company’s performance. However, Logan’s reluctance to hand over power creates frustration and animosity among his children, who are eager to have their voices heard, forming the crux of the series’ drama.

With this in mind, what changes when the line of succession in a business involves family members rather than simply coworkers?  

While our data doesn’t specifically distinguish between family and non-family businesses, anecdotal evidence suggests that family patriarchs often hold onto power for extended periods. The children, out of deference or fear, usually refrain from challenging this status quo. Hence, proper succession planning and successor grooming may be even more delayed in family businesses. 

What else should we be talking about when it comes to the intersection between the events in ‘Succession’ and real world business?  

My earnest advice to company leaders is to plan for succession early. Stay humble, stay aware of your firm’s current performance, and start grooming potential successors well in advance. Many organizations underestimate the time it takes for a new generation of leaders to be effectively prepared.

Furthermore, understanding the skill gaps in leadership and proactively recruiting to fill these gaps is crucial. Leadership transitions present an opportunity to bring in fresh perspectives and new capabilities that can invigorate an organization’s performance and trajectory.

About CSU’s College of Business

The College of Business at Colorado State University is focused on using business to create a better world.

As an AACSB-accredited business school, the College is among the top five percent of business colleges worldwide, providing programs and career support services to more than 2,500 undergraduate and 1,300 graduate students. Faculty help students across our top-ranked on-campus and online programs develop the knowledge, skills and values to navigate a rapidly evolving business world and address global challenges with sustainable business solutions. Our students are known for their creativity, work ethic and resilience—resulting in an undergraduate job offer and placement rate of over 90% within 90 days of graduation.

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