As the Viacom war rages with as-yet-untold collateral damage, an expert on executive exit models outlines some strategies that might have resulted in a smooth hand-off.
I wrote the first book on CEO departure challenges called The Hero's Farewell (Oxford University Press). Sumner Redstone is emblematic of a type I've labeled "monarchs." They only exit feet first — through a palace revolt or dying in office — and are commonly found in personality-infused businesses such as fashion, technology, media and, of course, Hollywood. They represent 5 to 6 percent of CEOs across all sectors, but in creative businesses and dynastic family enterprises, they're closer to 25 percent.
Redstone, at 93, has sat on the throne of Viacom and CBS's controlling company, National Amusements (initially his father's theater chain), for roughly fifty years. He falls in a long line of entertainment and media mogul monarchs: Louis B. Mayer similarly started with a New England theater chain and went on to co-found and lead MGM studios for nearly three decades before being forced out in 1951. CBS visionary William Paley ran that media empire for over 50 years and remained involved until his death at age 89 in 1990. Lew Wasserman built up MCA Universal out of a talent agency and ran it for roughly fifty years, until sidelined at age 82 by new owner Edgar Bronfman Jr. Another super agent, IMG founder Mark McCormack, died at 72 with no clear successor.
The palace intrigue that follows a monarch's ultimate exit imperils their primary mission — an immortal legacy. Monarchs regularly dispense with those in the succession pipeline whom they see as threats.
Redstone may, or may not, be at the top of his game, but independent assessors seem to back his mental competence despite his frail physical condition. Regardless, one would surely question his sanity if he retained his failing lieutenant Philippe Dauman, an underperforming exec who looked to sell off Viacom assets such as Paramount at fire sale prices to prop up his tenuous standing. And Dauman is now exploiting his owners' resources to sue them, desperately trying to retain his position.
Tragic situations such as this do not have to be the only script for showbiz succession. Consider these five exit strategies.
Jeffrey Sonnenfeld is a Yale School of Management senior associate dean and Lester Crown Professor of Management Practice.
Michael Eisner's terrific ten-year run at Walt Disney started faltering in his second decade. Sensing threats, he tried to undermine the succession process. Ultimately, with Senator George Mitchell as board chairman, the accomplished Bob Iger was promoted into the position. Meanwhile, in 2015, after a decade that saw Disney’s stock triple, Iger announced his own retirement date (2018), carefully reviewing candidates for succession.
Time Warner's Gerald Levin also tried to extend his troubled reign, fortifying his flank with humble former banker Richard Parsons, assuming no one would see him as a media/entertainment business successor. But, in 2002, when Levin left a year after the disastrous AOL merger, Parsons took over for five stabilizing years, passing over the reins to the highly successful Jeff Bewkes.
The 2002 Comcast transition from cable pioneer Ralph Roberts to his son Brian reveals a classic mentor-protege relationship. Roberts created Comcast in 1963, but by 1990, had already installed his well-regarded son as president, grooming him as successor. Rupert Murdoch has started this process with his sons at News Corp and 21st Century Fox.
This is the path often taken by monarchs who cannot imagine giving up their perch in the form known to them. Jim Wiatt was only able to leave the helm of the William Morris Agency with its 2009 takeover by Endeavor. ABC's Leonard Goldenson did a similar thing when he merged the network after 30 years on top with Capital Cities in 1985.
Instead of clinging to the throne, some titans serve a limited tour of duty, then move off to new ventures. Quincy Jones has worn many hats as a consummate "governor": as a record exec/broadcaster (Qwest), publisher (Vibe), producer (Fresh Prince of Bel Air) and much more.