It was Walter Wriston of Citibank who said, back in the early 1970s, "My first job is picking my successor."
And looking at the history of banking, one can appreciate the wisdom of his remarks.
First Chicago, two decades ago, had a CEO who pitted four top officers against each other in competition for the top spot he was relinquishing. As a result, he broke the bank into four competing groups, with staff people showing loyalty to one of the four rather than the bank. It hurt.
With this importance of succession, I felt it worthwhile to dig deeper when I heard that Tom Sayles, CEO of New Jersey's Summit Bancorp. for 23 years, had carved out a beautiful transition to Robert Cox, the new CEO - a transition applauded throughout the state.
How Torch Was Passed
Tom picked Bob 14 years ago and groomed him by making him president of the lead bank and its CEO three years later.
In addition, though, he warned me that a good CEO should have other potential successors available in case his number one choice is picked off by some other organization.
Then Tom watched and, I would guess, encouraged Bob to make sure he did what was necessary to build the personal stature necessary to take over a large holding company. As a result, Cox served through the chairs and eventually became chairman of the New Jersey Bankers Association, chairman of the major local hospital, and became involved in the Young Presidents' Organization.
CEO's Attitude Matters
But in my mind, the key ingredient was Tom Sayles' attitude. He reflects:
"Don't be afraid to carry out your succession decision promptly through fear of losing power before you are ready.
"Don't get the feeling you are the only person who can run the bank. (All too often the CEO wants his successor to fail so he looks good by comparison.)
"Finally do your best to build your successor's image with the board and the staff before he takes over."
This last activity, Tom admitted, was the one that was a high priority - working with the board members to show them that Bob had been involved in all the major decisions for years.
"All too often the CEO gets the credit for everything and the board doesn't realize the role the number two man has played in the bank's success," he said.
Equally interesting was the fact that Tom voluntarily retired as CEO of the holding company at age 62 1/2, although he is in good health and now works almost as hard on charitable ventures as he did for the bank.
"Why?" I asked. "Did you take early retirement?"
His answer should strike a chord with many bank CEOs.
"I look at all the changes I read about in the paper, aspects of derivatives, computer investment, and operations that were passing me by, and I decided that banking had become a young man's game."
In sum, Tom was admitting, something few bankers will, that the world was moving too fast for him to keep up well enough any more to do the bank and its shareholders justice.
But Tom's story goes deeper.
Bob became the holding company's CEO on Jan. 19, 1994.
Tom was to remain as chairman, handling outside affairs like mergers and acquisitions and building relationships. But after only five months, he is giving this up and surrendering all operational activity - limiting himself to keeping his assistant and his office only to work on business-development ventures and some light consulting with the new top staff.
Again, what was Tom's worst fear about this? Typical of him, it was not the fear of being "out of the loop" and losing his remaining power. Rather it was a fear that the staff and public would feel that Bob had forced him out. So he has devoted considerable energy to disabusing everyone of this thought.
That's what I call thoughtful management succession.
Walt Wriston should be proud.
