Last week, Blackstone announced that real estate executive Jonathan Gray solidified his role as heir apparent to CEO Stephen Schwarzman. Gray, who runs the firm’s $115-billion real estate business, will become president and chief operating officer thanks to Tony James, who is handing over day-to-day management of the business.
Blackstone deserves a round of applause for thoughtfully planning and executing on a succession plan for Schwarzman. The transition from one CEO to another is critical to the company’s history. A well-orchestrated transition is essential to maintain the confidence of investors, business partners, customer and employees.
A carefully designed and executed succession plan sets the stage for the new CEO to comfortably take the reins. Failure to plan for succession sets the stage for disruption of the business and a whole host of issues that could have been avoided through careful planning. Alas, I find that the vast majority of companies across every sector only pay lip service to succession planning, which I guess is okay because it keeps executive search consultants busy.