September 24, 2007
A controlled experiment at Glaxo
Various people are unhappy about the way that GlaxoSmithKline is conducting the race to take over from Jean-Pierre Garnier.
The company is holding an open competition to succeed him among Chris Viehbacher, head of its US pharmaceuticals arm, David Stoute, president of pharmaceutical operations and Andrew Witty, president of European pharmaceuticals.
It is reminiscent of the bake-off among Jeff Immelt, Bob Nardelli and Jim McNerney to succeed Jack Welch as chairman and chief executive of General Electric in 2001. That tussle ended with Mr Immelt getting the job and Mr Nardelli and Mr McNerney in effect having to leave.
So the Wall Street Journal quotes various sceptics this morning saying that the public competition at Glaxo is destabilising, among other things because it means the contestants have to complete special tasks set by Mr Garnier rather than getting on with the jobs.
That is true, but Glaxo is only making transparent the reality inside many companies when it looks as though the chief executive is about to leave. There is much positioning and the likely successors all position themselves. I cannot see why having to do so semi-publicly makes things any worse.
A company that has a formal succession process, rather than the chief executive suddenly announcing his or her successor at least has a decent chance of obeying meritocratic principles.
