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Managing change and transition at the top


The handover of power this week from Tony Blair to Gordon Brown offers a lesson to UK business, according to the managing director of an executive recruitment firm.

This is all rather surprising given the fact that a great resentment had supposedly festered between the pair over the years. Brown was said to have grown increasingly angry that Blair had reneged on an agreement to step down after a given time and hand power over to him (Brown sensed a conspiracy to sideline him in the race to succeed Blair).

Blair thought the man recently described as 'Stalinist' by a civil servant pushed his weight around a little too much and encroached beyond the boundaries of the Treasury.

Politics, we are often told by the Andrew Marrs of this world, is full of slings and arrows. But the duration and intensity of the backbiting between the factions defined by their loyalty to one of the men - unless greatly exaggerated by the media, which is perfectly possible - was surprising.

Brown is plotting a coup, cried the Blairites. Blair is reneging on a promise to step down, countered the Brownites.

Core ingredients

And yet, when the moment came to hand over the keys to Number 10 - it all went rather smoothly. Blair endorsed his successor and wished him luck without appearing to grit his teeth. Brown, who had always looked so sullen when Blair was the boss, beamed for the cameras outside Number 10.

The failure to deal with the replacement of senior people professionally costs businesses millions

"It's been interesting to watch the handover of power from Blair to Brown from a recruitment perspective," says John Wakeford, managing director of Hitchenor Wakeford Executive Search.

"So far, in laying the path for Brown, the government appears to have stuck to the three core ingredients needed for a good handover: communication, certainty, and being timely."

The failure to deal with the replacement of senior people professionally costs businesses millions of pounds a year, according to leading executive recruiters.

Last year mogul Sir Ken Morrison was accused of dragging his heels over the appointment of a new chief executive at his supermarket chain Morrisons, inertia which was blamed for the subsequent tumble in its share price.

"Failing to replace senior people at the right time causes boardroom unrest and unsettles investors and other stakeholders including customers, staff and suppliers," says Wakeford. "However, too many businesses fall into the same trap."

Wakeford says that "the handover of power to Gordon Brown highlights the importance of succession planning and the need for a smooth transition between senior management personnel."

However, businesses won't usually have it as easy as the Labour Party did in terms of finding a replacement. Brown's coronation has seemed a formality for several years and despite the machinations of Blairites there was never a serious challenger to the throne. Businesses will need to begin their search for a replacement executive early and make sure they are primed to hit the ground running when the time comes to pass the proverbial baton.

"Discreet head-hunting does take time and it's not an overnight task, but key stakeholders in a business must remain fully in the loop," says Wakeford. "A strategy with deadlines and contingency plans should be adopted.

"In the best cases, planning for the next management team begins years ahead and people are targeted and groomed for particular roles in the future."

Starting the search early will give you leeway if there are hold-ups in the recruitment process.

"Many things can stall the appointment of new people. Personal circumstances, renegotiations with existing employers, restrictive contracts and share options all create sticking points that must be carefully overcome."

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