Leadership succession in politics and business: Converging logics?

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Leadership succession in politics and business: Converging logics?

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Towards convergence
It has long been customary to treat the corporate and political sectors as distant universes, and therefore business and political leadership as entirely different crafts. But today it is easy to overstate those differences. Small and medium-sized firms, large corporations, political parties and governments are all facing the same set of megatrends that challenge their common roots as modernist projects of instrumental rationality through order, design, control and hierarchy. These trends include: accelerating and disruptive technological change; globalization and connectivity of markets, social problems and governance structures; greater public demand for transparency and accountability from any type of entity, profession or authority figure whose actions affect their lives; mass media, social media and mobile devices permanently shaping people’s cognitive and emotional frames, creating web-empowered customers and citizens with ‘liquid’ tastes, preferences, values and life styles (‘t Hart, 2014). The world in which business and political leaders operate has become ‘flat’: demanding, changeable, boundary-less, fast-paced. They feel the pinch: their longevity in office has gone down while the percentage of forced departures has gone up. Business and political leaders thus face a similar paradox: satisfying a romantic longing for ‘charismatic’ leadership that provides protection, direction and order in a complex and volatile world where nothing can be taken for granted anymore, and at the same time being constrained in exercising that leadership by a thickening of governance structures and accountability requirements that enable their authorizing environment to contain them and get rid of them more effectively. There is appetite for transformational leadership, yet the dominant rules of the game governing both business and political leadership conduce towards transactional leadership (cf. Burns, 1978).
Given this unfolding institutional isomorphism, what might be some productive lines for comparative, cross-sectoral inquiry? We propose three theoretical points of departure that could inspire such work. Firstly, from a power perspective on succession, the lens can be turned on the question of who controls whom. A power perspective on political succession invites us to analyze successions as products of strategic and tactical choices, as well signalling, impression management, and bargaining. It sees the rise, tenure, actions, impact and departure of leaders in terms of the ongoing pulling and hauling between leaders and those who can select, empower, de-authorize and remove them within the relevant governance structure. Political scientists should take note of the elite circulation versus institutionalisation of power models that have been used and refined in the study of CEO dismissals (Ocasio, 1994). Likewise, the ‘power game’ of incumbent-challenger(s) interaction as modelled by Bynander and ‘t Hart (2006, 2008) might inspire students of corporate successions to go beyond the penetrate the succession politics within firms more effectively . Likewise, Finkelstein et al’s (2009) synopsis of the big body of work on the politics of top management teams can be usefully fused with Dowding et al’s (2013) work on the politics of ministerial survival and cabinet reshuffles to provide an integrative perspective on the power dynamics that produce both corporate and political successions and influence their outcomes.
Secondly, an accountability perspective on succession generates a set of related, but analytically distinct set of questions (Mulgan, 2003; Uhr, 2005). Which mechanisms are in place to ensure that CEO’s and party leaders, who are put there to act as ‘agents’ on behalf of some constituency and/or set of values and interests, are induced to render account of their behaviour to the ‘principals’ who put them there? Who are in effect the relevant principals for, say, party leaders, cabinet ministers or departmental secretaries, and how are the accountability relationships between principals and agents constituted? The many instances of change to party rules of leadership selection and removal that we have seen across the democratic world in the last three decades have in large part been motivated by the idea of opening up these pivotal leadership processes up to broader scrutiny and indeed participation, even down to the level of ordinary party members. Likewise, the thickening of corporate governance structures has aimed to strengthen the checks and balances around corporate executives. A key question generated by the accountability perspective on succession is to what extent these aims have been realised, and succession episodes are good place to conduct such inquiry. What can the course and outcomes of succession episodes teach us about the real terms of the principal-agent relationships between owners, shareholders, boards and CEO’s within corporations, and between party members, parliamentarians and party leaders within political parties?
This leads into a third area of comparative inquiry, guided by a normative perspective on succession. How do we know a ‘good’, ‘well-managed’ succession if we see it? The academic literature has bene largely silent on this, preoccupied as it has been with the when, how and why-questions that suit its empirical toolkit. But as a result, it has left the job of assessing and advising about successions to the largely theory-deprived and ‘fact-free’ world of self-help succession planning guides (e.g. Rothwell, 2010). There is no normative theory of succession, but there should be? What ought to be the values that parties and companies seek to maximize when they design their leadership succession rules, and when key actors within both consider replacing incumbent senior office-holders? How to institutionalize succession norms and practices that effectively navigate the tension between the need for continuity and predictability of corporate, party and government strategy with the need for responsiveness to electoral or market signals, new leaders’ need for distinctive political capital and indeed the need for periodic ‘creative destruction’ and course changes in the life of institutions? At a minimum, we would want key decisions about leader selection and removal to be taken in a transparent, inclusive fashion. More ambitiously, successions should select office-holders in such a manner as to have the authority necessary for not just surviving in the role but actually exercising leadership. These are just ruminations of course. What we need is a field of research that does not eschew but embraces the challenges of evaluating successions. This would provide it with the much needed impetus to transform itself from what to date have been largely two sets of uncoordinated academic parlour games into a more ambitious and more relevant endeavour that is both transdisciplinary and applied.
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