In this image released by Lionsgate, Jennifer Lawrence portrays Katniss Everdeen in a scene from "The Hunger Games," opening on Friday, March 23, 2012. (AP Photo/Lionsgate, Murray Close)
In a Hunger Games-style race to the top, contenders fight to the death and the last one standing wins © AP

Chief executive is a highly paid, high-profile role, for which highly motivated pretenders have prepared for years. The only surprise is why anyone is surprised that recruiting a new one often descends into a brutal contest that wreaks havoc with the normal running of the company and leaves turmoil in its wake.

Everybody knows what the ingredients of a smooth handover should be. Recruit, train and develop your people, so enough are capable of doing the senior jobs when the time comes. Discuss likely successors regularly with the board. Employ headhunters to survey the horizon for promising outsiders. Throw in a dash of neuroscience and a pinch of psychology to offset unconscious bias. Repeat every six or seven years.

The assumption is that governance alchemy can convert the selection of a new chief executive into a transaction as uncomplicated as buying a new suit. In fact, it is always at the mercy of human frailty, chance and subjectivity.

Threats to the best-laid succession plans include the shock departure of your heir apparent. Even if you bet Donald Trump would be president, for instance, you probably did not bet he would select Gary Cohn as his top economic adviser. Mr Cohn had been tipped to become chief executive at Goldman Sachs, the emblem of the Wall Street establishment that candidate Trump had excoriated. Those improbable events forced the bank to rewrite its line of succession.

Another risk is simply that rivals will start to exhibit rivalry. In the first decade of this century, some big companies acknowledged this tendency by favouring a gladiatorial approach to chief executive succession.

Before his retirement as the head of General Electric in 2001, Jack Welch publicly pitted three divisional heads against each other. Pfizer ran a three-way race for its top job in 2006. GlaxoSmithKline had a “beauty contest” for the successor to Jean-Pierre Garnier in 2007, assigning special projects to three contenders to test their capabilities, before handing Sir Andrew Witty the job.

In selecting Emma Walmsley as Sir Andrew’s replacement last year, GSK took a more conventional path: vetting candidates, asking them to lay out their priorities for the pharmaceutical company, and trying to keep the process private. GSK’s chairman Sir Philip Hampton has since cautioned companies against what he called “Hunger Games behaviour” among aspirants — a reference to the fictional contest where “competitors must fight to the death [and] the last [person] standing wins”.

It seems sound advice. By contrast, the acrimonious 2006 Pfizer campaign featured secret meetings to lobby directors and anonymous email attacks on Jeff Kindler, the eventual winner.

A competition distracts managers from running their part of the business. It yields a champion, but turns runners-up into losers. The new chief executive’s honeymoon is consumed by efforts to placate rivals and keep them on board, even as he or she is getting used to arduous new leadership duties.

The problem is that, whatever the method chosen, it is hard to change chief executive without hurting those who are not chosen, or triggering further change at the top.

By all accounts, the GSK succession was more dignified than the 2007 scrap for the helm. But the group has just announced that one of the would-be chief executives — Abbas Hussain, head of the pharmaceuticals division — will leave anyway. Mr Welch recognised early on that the open contest for his successor at GE would probably prompt the defeated managers to quit — and so it did. Likewise, at Pfizer both losers left. As a seasoned corporate chairman told me, any selection process stimulates the hopefuls’ ambitions and puts headhunters on to their trail.

In which case, why ignore the inevitable? Media will always describe chief executive recruitment as a battle, as they have in reporting Goldman’s decision to name co-presidents in place of Mr Cohn. Boards should prepare accordingly. Instruct contestants that any whiff of skulduggery will disqualify them. Ensure the pipeline is well stocked so when the also-rans leave, as they will, disruption is contained. Keep talking to the affected managers.

Hunger Games may eventually die out. The whole process is already more professional than it once was. Shared leadership, when named leaders take a lower profile, is coming into vogue. Some studies even say a lottocracy — picking at random from a pool of leaders, as the ancient Greeks and Venetian republic did — could be as effective as managed selection.

But as long as most organisations are pyramid-shaped, the final desperate scramble to the apex is bound to be bloody. The best a good board can do is stand ready to clear up the mess and bind the losers’ wounds.

Twitter: @andrewtghill

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