When a CEO is Gone

At the end of August this year, Steve Jobs quit as Apple CEO. Tim Cook filled in the vacancy right after with the full support of Jobs. The public may have sensed something was going to happen to Jobs, although the company did not detailed the reasons. And it turned out that the public was right. He died shortly after the resignation. 

No panic occurred amongst board and staff in the company. It appears that everything is under control and the legend of Apple will still continue without Steve.

The succession of Apple was certainly planned before Jobs' death. Since Jobs had cancer for a very long time, the board would have plenty of time to decide a succession. 

However not all companies have plans for the death of their CEO or leader before it happens. Semiconductor Manufacturing International Corporation (SMIC) may be one of the examples. It is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in China. 

The chair of the board Jiang Shangzhou died in June 28, 2011. According to the press release on the company's website, it does not mention the cause of the death, although cancer is most likely according to some news reports. The next day, an election of CEO was held by the board. Wang Ningguo lost in the election and resigned from all his duties at the company afterwards. 

Until three weeks after Jiang’s death, the company finally announced the new CEO, Zhang Wenyi. During the three weeks, rumors were widely spread that there was power struggles over corporate control at the company. No statement was made during the three weeks to clarify what was going on in the company until it decided whom to be the new CEO. In the meantime, a letter to the shareholders from the new CEO was published. 

The announcement of the new CEO's appointment mainly addressed the qualification of Zhang as a capable and the best person for the position. It further addressed the contribution of both Jiang and Wang to the company. The achievements of the new CEO so far give the public confidence that he is able to lead the company.

But why are the compliments to Jiang and Wang so important? Because they were expected to be a team working together to contribute to the company. Despite rumors that the company was facing turbulence due to vacancy of the board chair and CEO, the statement is trying to convince the public that everything appears harmonious and well-controlled. 

The announcement also include its plan for seeking talent to fill another position at the company. Furthermore, the new CEO's states his plan and hope for the company, which are fully supported by the entire board. However it fails to explain the reason why the CEO resigned.

The letter to shareholders from Zhang, the new CEO, apologized to the shareholders since induced rumors have led to invest concerns. This apology is quite necessary because it shows their care for those shareholders though it may not be enough to compensate them. The letter also indicates how successful the company is and progress the company has made during the recent few years. Again, the letter highlights the accomplishment of the two leaders. Finally he expresses that he is honored to be appointed as the CEO of the company and his team's ambition to  run the company.

Overall, the announcement and the letter are well written. Key messages are covered in the two documents and the wording is appropriate. However, the process of communication of the CEO change looks passive. Especially when news reports about the internal power struggle after the chair of the board's death and the former CEO's lost in the election, the company did not make any statement fast enough to clarify the situation and to stabilize internal and external stakeholders.

See the letter, and the announcement.

I hardly find a company use social media to announce a succession. In the above example, SMIC does not even use social media at all, despite the fact that they hire student from colleges every year. It would be a great opportunity for them to publicize the company by using social media to their potential employees. 

Apple Inc. does not use social media in China, either. However, when the announcement of Jobs' resignation was reported by newspapers, journals and website on Chinese microblog, the information was soon disseminated widely and became the hottest topic for a couple of days. 

Social media actually play a very important role in announcing an succession. Of course, a company does not have to use social media to make the statement. However once the announcement is made through social media, it can spread faster and probably wider than make it through other communication outlets. 

For example, the Wall Street Journal in Chinese version online published the resignation of Jobs at 7:18 a.m., August 25, 2011. Whereas it published on its microblog at 7:09 a.m. the same day. Nine minutes early may seem nothing to you, then try to think about how easy for the users to view just one sentence so that they can get the most important idea,  and how easy for them to click the reblog bottom to share the information to their followers. 

Social media allow people to gather all kinds of information in one page. Many people do not frequently check a company’s website to see its news. Then it may be an alternative or even better way for the company to make announcement to its public through social media. Simply because social media allows distribution of information faster and easier.

The Wall Street Journal Chinese version

Microblog of the Wall Street Journal Chinese version

The Wall Street Journal Chinese version