A Slice of Succession Planning: Domino’s Passes the Baton
At the beginning of the new year, J. Patrick Doyle, the current CEO of Domino’s Pizza, announced he would step down from his position. Corporate America is used to chief executives coming and going, but this time is a little different. Doyle has been Domino’s CEO since 2010 and has taken its stock price from $7.75 in December of 2009 to well above $200 per share by the beginning of 2018. During his tenure, he led Domino’s to overtake Pizza Hut as the largest pizza chain globally, with over 15,000 stores worldwide. So why would he leave now?
In a recent interview, Doyle stated, “We could try to string things together but why [sic].” When asked about his future, he explained: “Let’s take these things one at a time and make sure that we finish things up great at Domino’s.” Doyle has said he realized CEOs have a shelf life when managing a large enterprise in the public eye. He indicated that CEOs might start to lose their edge after a decade of being at the helm. Further, Doyle expanded on how he and his executive team have hit their long-range goals for Domino’s, and Doyle feels satisfied with his achievements. Lastly – and most importantly – his successor is ready.
For Domino’s, a number of forces have aligned in planning for their next leader. Some organizations don’t have that luxury and find themselves under pressure to identify a successor quickly. When a job incumbent is not a part of the succession process, it is even more imperative that the board have a detailed plan for choosing its next CEO. In today’s world, CEOs are not tenured in their organizations as they were 50 years ago. The threat of them being recruited by a competitor, making a wrong decision, or mis-stepping is higher now than ever before. With the rise of hyper-connection through social media, mobile devices, and the internet, scrutiny for these high-powered professionals is everywhere. Additionally, with baby boomers retiring at a record pace, there are even more top spots opening up. In short: it is in a company’s best interest to have a robust succession plan.
As for Doyle, there is probably satisfaction in seeing a succession plan come together (which his team has executed well). A key to their future success is having a deep bench of executives who are ready for expanded responsibilities. Every succession event allows the organization to re-calibrate. It is an opportune time for the board to evaluate its long-term strategy, align to common goals, and help shape the future vision for the organization. Doing this in a disciplined manner is imperative to organizational stability. Further, as a new CEO settles into his or her role, the organization underneath adjusts to their new leader. When the new CEO is internal to the organization, he or she has a higher likelihood of succeeding. Internal candidates are familiar with the organization’s culture, habits, and how work really gets done inside the company. At Domino’s, this seems to be the case.
As for their impending transition, there may be mixed emotions in seeing Doyle leave. For Doyle – although he has taken a huge bite out of the competition – his Domino’s legacy may be in fact how well he has set up his successor to succeed.