You have to hand it to Sir Elton John. Not only is he the only musician ever to have top-ten hit singles in Britain for six decades in a row. He is also a rare septuagenarian megastar who knows how to bow out in style. On November 20th at a relatively tender 75 years old, he performed what he said would be his last ever concert in America at Dodger Stadium in Los Angeles. One of the showstoppers was “Goodbye Yellow Brick Road”, the theme song for graceful retirements. If only Disney, who live-streamed the event on Disney+, had been listening.It wasn’t, because shortly before the performance started, a bombshell landed. Its hospitality tent at the stadium was convulsed by the news that Robert (Bob) Iger, the Walt Disney Company’s own Rocket Man, was coming out of semi-retirement, aged 71, to retake control of the firm he left only 11 months previously, leaving Bob Chapek, his handpicked successor, out on his ear. It was startling. It shouldn’t have been. After all, as Jeffrey Cole, a communications expert at USC Annenberg puts it, “Disney has had a 40-year succession problem”. During his decade-and-a-half as CEO, Mr Iger postponed his retirement four times, elevating and nixing potential successors. His predecessor, Michael Eisner, expensively jettisoned possible replacements twice during his 21-year reign, before finally settling on Mr Iger. Disney’s board has now given Mr Iger two years—a deadline unlikely to be set in stone—to have another go at finding a suitable heir. Succession problems are not unique to Disney. In fact they plague corporate America, especially when departing CEOs achieve near mythical status—besides Mr Iger, recall GE’s Jack Welch and Howard Schultz, Starbucks’ barista-in-chief. Some high-profile CEOs cling onto power for so long that their firms appear to grow old with them: exhibit a is FedEx, the delivery firm whose founder Fred Smith stepped down as boss in June after 49 years. There is a probationary air to some imperial handovers. Andy Jassy may have done all the right things to become boss of Amazon, but there is little doubt Jeff Bezos, the founder, would swoop back in if the e-commerce giant got into trouble. Then there are the leaders who have made their firms so iconoclastic they are almost irreplaceable: think of Berkshire Hathaway’s investment genius, Warren Buffett, or Elon Musk and his impossible-to-emulate greatest show on earth. What makes it so hard to fill such oversized shoes? One clue comes from Mr Iger himself. It is hubris. In his memoir, “The Ride of a Lifetime”, published in 2019, he acknowledges that all CEOs like to think that they are irreplaceable. Yet good leadership, he adds, demands the opposite. It is about bringing on a successor, identifying skills they need to develop and being honest with them when they are not ready for the next step. That is true. Yet what he doesn’t admit is that grooming a replacement is psychologically tough. It brings leaders face-to-face with their own mortality. It brings up the vexing question of legacy. Tellingly, Mr Iger writes almost mournfully about the day in 2005 when Mr Eisner left Disney for the last time with no board seat, no consulting role—not even a farewell lunch thrown by his colleagues. “Now he was driving away knowing that his era was over,” he wrote. “It’s one of those moments, I imagine, when it’s hard to know exactly who you are without this attachment and title and role that has defined you for so long.” With such a bleak perception of corporate afterlife, it’s no wonder Mr Iger was loth to let go.In theory, that’s where strong, independent board members should have come in. It’s their job to handle succession planning. While the CEO has a responsibility to nurture layers of talent within the firm, it’s up to the board to examine internal and external candidates and decide on a replacement. In practice, however, A-list bosses often dominate their boards. In Disney’s case, the directors went as far as elevating Mr Iger to chairman in 2012 after his masterful acquisitions of Pixar and Marvel, two animated-film studios, sealed his status as monarch of the Magic Kingdom. When Mr Chapek took over as CEO in 2020, the board continued in Mr Iger’s thrall. He remained executive chairman until the end of last year, reportedly still calling the shots in ways that undermined his successor’s authority. In June, under Susan Arnold, a new chairman, the board unanimously extended Mr Chapek’s contract, though by then his credibility was virtually shot. Five months later, the board sacked him. It could barely disguise its delight at having its more-beloved Bob back. For all such corporate-governance fiascos, some comebacks work. Mr Iger’s might. Jeffrey Sonnenfeld of the Yale School of Management likens his return to that of second-world-war generals such as Douglas MacArthur or George Patton, motivated more by restoring Disney’s lustre than by personal ambition. The day after taking back control at Burbank, Mr Iger swiftly set out to dismantle the centralising strategy orchestrated by Mr Chapek, putting decision-making back in the hands of Disney’s creators. Mr Sonnenfeld believes the returning boss already has “excellent” replacement candidates up his sleeve. If he does, he will be able to rectify the biggest mistake in a mostly blemish-free career. When are you gonna come down? Some high-profile successions work, too, most notably the transition at Apple, maker of the iPhone, from the late Steve Jobs to Tim Cook, and, indeed, Mr Iger’s follow-on from Mr Eisner. In both cases, the new bosses succeeded first by not trashing their predecessors’ legacies and second by articulating a strong vision for the future. Yet ultimately the most important thing may have been that their long-serving bosses, however celebrated, had by then left the stage. Long-standing financiers such as Jamie Dimon of JPMorgan Chase and Larry Fink of BlackRock; moguls, such as Rupert Murdoch, of News Corp; all should take note. Listen to Sir Elton’s ode to life after superstardom—and learn. ■ More
