CEO Succession Planning Procedure at Microsoft Corporation (Essay Sample)

CEO Succession Planning Procedure at Microsoft Corporation Name Institutional Affiliation CEO Succession Planning Procedure at Microsoft Corporation Succession planning is an important component of risk management and internal talent development, which, most of the time, refers to the preparation of the new talents for the top management positions. The quality of long-term and emergency succession planning translates directly into future shareholder and stakeholder value because if it is done properly, transition of power and appointment of a new top executive runs smoothly and promptly (Hooijberg & Lane, 2016). Succession planning is a responsibility of a board of directors, which should not be neglected: timely preparation and investment in development of talents allows to avoid an organization’s dependence on a single person, be it CEO or some other executive, and have a skilled successor in case of emergency. Microsoft, unlike many other companies, approaches succession planning with the utmost diligence (Mader, 2006). Due to the high attention to succession planning, Microsoft prefers hiring its own employees on top positions rather than employ them from the outside. The candidates for the CEO positions become the well-educated and experienced managers who have already contributed to the company’s success and proven their skills and expertise. It is also important for a future CEO to be a devoted team player, innovative, knowledge-thirsty, and impactful manager with a vision. The current CEO of Microsoft, Satya Nadella, is the person possessing the exact set of skills and experience, who worked on the position of Executive Vice President of Microsoft cloud service department prior to his appointment as a CEO. Considering the nature of CEO’s job and the wide range of issues CEOs have to deal with, it is almost impossible to find the right, all-round candidate. As a result, Microsoft first selects the best and most-promising specialist in their respective fields and further trains their strong sides together with other talents needed for the position. Still, one of the major factors for selection becomes a presence of vision. To ensure that the candidates for succession stay with the company, Microsoft uses its retention strategy, which implies remuneration in a form of company shares. Every high-level executive owns the shares of the company, being its servant and owner at the same time. Such policies, together with the strong corporate culture, make employees identify with the company and feel attachment to it. Finally, the candidates selected for CEO succession are usually the best of the best, so they are frequently promoted and don’t feel need to seek career opportunities somewhere else. The succession planning process in Microsoft starts with the identification of long-term direction of the company and its future needs. The second step of the process is the analysis of the gaps and the long-term talent needs. Then, starts the identification of talent pools, which allows to discover the promising candidates early and control and monitor their development. The forth step...