Firing Line: Installing a Sucesssion Plan

Jerry Yang, former CEO and co-founder of Yahoo!(YHOO Quote), is an example of this cult-versus-religion mindset. In November 2008, Yang stepped down as CEO, 17 months after jumping back into the role and trying to right the ship.

His skills seemed more geared to starting a tech company than commanding a large corporate ship in stormy seas. He failed to realize that being able to start a tech company didn't necessarily translate into being able to run one.

His penchant for making decisions by consensus and fumbling a potential $44.5 billion takeover bid by Microsoft(MSFT Quote) resulted in "Chief Yahoo" being sent back to an advisory role.

And since few Yahoo heavies dared to suggest during those 17 months that he might not be the man for the job, the board of directors scrambled to find a replacement for the outgoing skipper. So Yahoo was left damaged and listing, with no commanding officer at the helm.

In the interest of full disclosure, I owned Yahoo shares and rode the escalator down in the past year, hoping that a heavy would recognize what most of their shareholders did: it's a good offer, take it. Now Carol Bartz must right the ship and get it underway. Thank God for covered calls and puts.

The credit crisis that began in 2007 highlighted the flaws in the succession plans, or lack thereof, of many financial institutions. Victim No. 1 was Merrill Lynch's longtime CEO Stan O'Neal, who got the boot primarily for his less-than-stellar performance during the crisis, although "booted" may be a poor choice of words to describe someone who walked away with a $160-million severance package.