Sequels to iconic CEOs rarely as good as original

Legendary CEOs like Apple Inc.'s Steve Jobs are almost impossible acts to follow. Most of the sequels have disappointed the stock market, with some flopping so badly that they were scrapped to make room for the return of the star attraction.

"When an iconic CEO leaves, the new guy almost always has a hard time," said Marshall Goldsmith, author of "Succession: Are You Ready?"

Even so, companies should try to lessen the likely letdown by drawing up a logical succession plan that prepares an heir to fill the yawning void created with the loss of someone like Jobs.

Apple's succession planning is being put to the test. Jobs, 53, a survivor of pancreatic cancer, is going on medical leave through June to deal with a "complex" health issue. While Jobs intends to remain chief executive during his hiatus, Chief Operating Officer Tim Cook will steer the ship in the interim.

If things go smoothly during the next six months, it wouldn't be a surprise if Cook is promoted to CEO and Jobs ? assuming he regains his health ? moves into some kind of advisory role, said Dennis Carey, author of "CEO Succession."

"I think Apple's board probably has been looking at succession planning more intently and religiously than most companies," said Carey, who is a senior client partner for the executive recruitment firm Korn/Ferry.

Microsoft Corp., Apple's longtime nemesis, provided a textbook example of how to pass the baton correctly in its recent leadership transition from co-founder Bill Gates to his right-hand man, Steve Ballmer.

Gates turned over the CEO job to Ballmer in 2000, but remained as Microsoft's chairman before leaving the Redmond, Wash.-based company entirely last June ? a departure he telegraphed to investors two years in advance. He remains chairman of the Redmond, Wash.-based company.

Microsoft has remained among the world's most profitable and powerful companies with Ballmer at the helm, although its stock has plunged by 30 percent since Gates' exit last summer. The ailing economy would seem to have more to do with Microsoft's stock market losses than any misgivings about Ballmer.

Other major companies that have shook off the loss of a celebrity CEO without much difficulty include chip maker Intel Corp., whose profits rose the first few years after Andy Grove passed the reins to Craig Barrett in 1998. IBM Corp. also has done well since Sam Palmisano took over in 2002 from Louis Gerstner, the executive credited with essentially saving Big Blue from ruin. Both Barrett and Palmisano were carefully sized up before they had to step into those big shoes.

But it usually doesn't work out so well, even if a successor has been groomed for the role. David Pottruck learned this as he moved up the ranks at stock brokerage Charles Schwab Corp.

After running the day-to-day operations, Pottruck then became co-CEO with founder Charles Schwab before taking on the job himself in 2003.

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