Disney this week introduced Josh D’Amaro, its parks chief, because the winner of its very public race to be its subsequent CEO; he’ll take over for outgoing chief govt Bob Iger in March. However together with the glory of the CEO crown and the monumental activity of operating the complicated leisure large, D’Amaro faces a tough personnel problem: changing into the boss of his former peer. Dana Walden, Disney’s TV and leisure chief, was reportedly a fellow CEO contender he beat out for the job.
The Fortune 500 is affected by examples of wanna-be CEOs who left their firms after being handed over for the highest job. And leaving is usually a pure response to such a snub. Famously, when GE named Jeff Immelt CEO in 2001, the three different inside candidates ultimately departed the corporate for prime jobs elsewhere. Former Apple retail chief Ron Johnson left to turn into CEO at J.C. Penney when the tech large named Tim Prepare dinner CEO in 2011. Simply final month, Walmart introduced that its worldwide CEO Kathryn McLay, thought of a CEO contender, was leaving the corporate following the appointment of John Furner because the retail large’s subsequent chief.
However in Disney’s case, Walden appears more likely to stick round, no less than for some time. In asserting D’Amaro as CEO, Disney additionally promoted Walden, a revered Hollywood insider, to president and chief artistic officer. She’s the primary to carry that title within the firm’s 102-year historical past, and it provides her oversight of all of Disney’s films and streaming sequence. Together with praising Walden’s artistic and storytelling bonafides, the Disney press launch notes that she “will report on to D’Amaro,” the man who beat her out for the CEO job.
And there’s the rub. Even for essentially the most confident executives, that dynamic might show awkward. The CEO runner-up has to nurse a dented ego whereas answering to the succession race’s final winner. The incoming CEO, in the meantime, has to handle a workforce that features somebody who needed their job.
On paper, no less than, Disney has arrange D’Amaro and Walden to navigate the numerous pitfalls such a situation poses by giving the brand new CEO and chief artistic officer roles which can be distinct and complementary.
“She’s on the artistic aspect, whereas D’Amaro is extra on the monetary and parks aspect,” says Susan Sandlund, a managing director at Pearl Meyer who leads the agency’s management consulting observe. Walden “brings worth in a complete completely different means than D’Amaro does,” she says. “Together, it’s a fairly highly effective workforce.”
It could possibly be argued that Disney’s new double-barreled management association, which pulls on the executives’ strengths, is akin to a co-CEO construction however higher, Sandlund says. “You could have one reporting to the opposite,” she says. “The minute you could have equal CEOs, you might be begging for ambiguity and potential battle.”
Nonetheless, distinct titles and designated realms of affect received’t assure a easy partnership. The onus is on D’Amaro to decide on a standard, shared aim that he can rally his new workforce round and to delegate significant duties to Walden, says Emma Zhao, an assistant professor of commerce at UVA’s McIntire Faculty of Commerce. “That helps put apart a few of these particular person considerations and motivations.”
A wildcard in all of this, for course, is Walden’s private emotions in regards to the state of affairs—her ambition and whether or not she’s decided to sooner or later be a CEO. If that’s the case, her new place and a one-time award with a goal worth of $5.26 million could solely hold her at Disney for thus lengthy.
Sandlund, who has endorsed executives in Walden’s place earlier than, suggests her finest technique is to sit down tight. “My recommendation is don’t make any rash strikes proper now. Lots of people will likely be calling you for different CEO roles, which you possibly can leap at instantly,” she says. “But when an govt actually likes the place they’re, they love the tradition, they’ve been there a very long time, then they typically wish to see, what can the corporate do that may make it price sticking round?”
This story was initially featured on Fortune.com
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