Opinion, Berkeley Blogs

What the Harvard Business Review and the People’s Daily think about leadership succession

By Steve Blank

I had to laugh when my post about what happens when innovative CEOs retire or die appeared in both the bastion of capitalism – the Harvard Business Review — and in the official newspaper of the Chinese Communist Party – The People’s Daily .

Then I didn’t.

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A Story is just a story

Why the Harvard Business Review published the story has a pretty simple explanation. In an increasingly disruptive 21st century CEO succession has a major impact on a company, its employees and shareholders. I offered my view of what happens to innovative companies and why it happens, and used Microsoft and Apple as examples.

Reading the tea leaves

It’s hard to believe that in my lifetime I’ve seen entrepreneurship go from a crime to an aspiration in China. Why the People’s Daily published the story also appears to have a pretty simple explanation. While the paper is the official newspaper of the Chinese Communist Party, and read mostly by members of the party, the paper’s business section is now the voice of state-directed capitalism . CEO succession is an equally important issue in China, and the story has equal relevance there.

However…

The People’s Daily is not your average newspaper. The paper’s editorials are major policy announcements. Party members and seasoned China watchers read it carefully to gauge which way the political wind is blowing. Often the story is written “between the lines.”

A party In a hotel

A month ago the 370 full and alternate members of the Chinese Communist Party Central Committee met in a hotel in Beijing. Since China is ruled by the Communist Party, these meetings are where major policies and the long term direction of the economy and country get hashed out. Party leaders jockey for position, and existing players try to retain control and silence competing factions, and new players try to gain power.

This plenum is a run-up to next year's 19th National Congress of the Communist Party of China which will be held in Beijing in the fall of 2017. Next year’s Party Congress is essentially China’s national election. There, the 2,300 party delegates at the congress, representing 88 million Communist Party members, will elect the new leadership of the Communist Party of China, including the Central Committee and General Secretary, Politburo, Politburo Standing Committee (the top decision-making body) and Central Military Commission.

A story is just a story – until it’s not

So what does this have to do with the story in the People’s Daily ? Probably nothing.

However …

The Sixth Plenum gave Chinese President Xi Jinping the title of “core” of the leadership . Calling Xi “core” means that he may use it to ignore the term limits, tenure or retirement age that Chinese leadership has used for the last 30 years. Tightening his grip on the party leadership means Xi may rule China for at least three terms – 2012 until 2027.

Rumor has it that this didn’t sit well with others in the party. Some said Xi “has amassed too much control and has eroded traditions of collective leadership, built up to prevent a return to the arbitrary abuses of Mao’s final decades.”

Succession planning was certainly a topic of discussion among the party leadership.

The last line of my article on succession, on the front page of the business section, said, “然而,具有讽刺意味的是,今天,你把手中的产品 和市场握得越紧,往往越容易失去。”

“Ironically, today the tighter you grip your product and market, the easier it is to lose.”

I wonder if someone was sending a message?

Steve Blank's blog : www.steveblank.com