Creative Infotech Source: Kumar M.D. (2012), 50 Short Case Studies in Business Management, UUM Press Mr. John Adams was Co-founder, Chairman, and Chief Executive Officer of the Creative Infotech firm, and is widely recognised as a charismatic leader of the personal computer revolution. Mr. John Adams is talented, visionary and determined. He holds an inborn understanding of technology with a mystic sense of what consumers will respond to. His confidence that design should be central to his products not only produced successes in the marketplace, and elevated design in consumer electronics, but everything that aspires to the high end. Mr. John Adams was suffering from pancreatic cancer. He brought unusual attention to this less-well-known type of cancer that has actually been declining despite no big advances in treatment or finding it early. Mr. John Adams who has been on medical leave for an undisclosed condition, resigned as chief executive of Creative Infotech, saying "He could no longer meet the duties and expectations of the job." Actually, the decision of resignation was a shock to the company, the Board of Directors and shareholders. For the first time, the company thought about succession planning and its consequences. Though succession planning is applicable at all levels, it is at the highest level that the most formidable challenge exists. At a strategic level, succession planning is probably the most important Human Resource risk. The consequence of appointing the wrong successor can be much worse than slow growth or declining capitalization. The Board has a very important role to play in selecting the next CEO. Indeed, choosing the CEO is probably the most important decision the board makes. The board should convey to the incumbent CEO in clear terms that his success will also be measured by his ability to handle succession. In addition, the board should play an active role in the succession planning exercise and not just leave it to the CEO. In the case of Creative Infotech, since Mr. John Adams was the CEO for many decades, the succession planning was not done properly, and moreover, such a sudden decision based on his health condition is not expected by the organisation or the board of directors. Regardless of the reason, sudden leadership changes may result in a loss of confidence by employees and shareholders. The prompt way to restore confidence is to have a successor ready to step in and lead the company through this economic downturn. So the challenging question is: Are you prepared for sudden leadership succession? One crucial decision the board has to take in such conditions is whether to choose an insider or an outsider. Firms in trouble often look for fresh blood. On the other hand, when things are going smoothly, the board may decide to appoint an experienced insider. It is expected by the Board that the successor should be counselled to put himself into the shoes of the CEO and understand what is going on in his mind. The board should assess the next CEO to be preoccupied with personal attributes viz., acceptability among members, accountability from the organization, ability to handle the shareholders and the companys regular and expansion plans, absolute knowledge about company resources and financial status and many leadership skills.

Questions:

13. Discuss the case from the perspective of Mr. John Adams and his decision to resign as chief executive officer.

14. How can the Board of Directors contribute to aligning the successors of the CEO?

15. In your opinion, who would be the ideal candidate "an insider or outsider" to be the next CEO?