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Post Leadership
Posted at 10:30 AM ET, 10/26/2011

IBM sets an example with Ginni Rometty — and not just by selecting her as its first female CEO


IBM announced that Virginia Rometty, currently a senior vice president at the firm, will take over as CEO when Samuel J. Palmisano retires in January. (DIMA GAVRYSH - AP)
Virginia “Ginni” Rometty’s ascension to the CEO job at IBM is a remarkable feat. For the first time in history, the world’s two largest technology companies will be headed by women. After ousting Leo Apotheker in September, HP named Meg Whitman to be CEO. And now just a month later, “Big Blue” elevated Rometty, a senior vice president at the company, to succeed Samuel J. Palmisano when he retires at the start of next year.

But her promotion is impressive for another reason. Unlike so many CEO transitions these days, this one was pulled off noticeably smooth. Palmisano is departing the massive technology firm while it is performing at the top of its game, leaving Rometty with a strong foundation to build on rather than a mess to clean up. He and IBM’s board put in place a company veteran who has served Big Blue for 30 years and knows the ins and outs of the company’s culture, customers and challenges. And investors were never left wondering who would lead IBM next—Rometty has long been a frontrunner for the job, and Palmisano is stepping down at the company’s traditional retirement age, which is 60.

That’s the way CEO successions should happen. But all too often, that isn’t the case. HP’s firing of Apotheker and hurried naming of Meg Whitman may turn out well in the end, but it has left plenty of investors concerned. Other companies, such as Sears, which installed an interim CEO in 2008 who lasted for three years before the board made up its mind about a successor in February, have the opposite problem. And who can forget the Bank of America board’s scramble to find a new CEO to follow Ken Lewis back in 2009?

Grooming the right successor is arguably one of the CEO’s biggest jobs, and it’s certainly the board’s. Strategy and vision are key, yes. But if a CEO isn’t setting the company up for the right future leadership, he or she isn’t doing the job. Thus far, at least, it appears Palmisano has gotten this right. In naming Rometty, there have been no big surprises, and no market-jolting drama—the way it should be.

It appears that Rometty herself is much the same. She isn’t known for foul-mouthed antics. She did not spend millions of her own money to try to become governor of California. Rather, while well known within the technology industry, she’s instead a low-key leader who has simply done her job very well.  “Ginni got it because she deserved it,” Palmisano is quoted as saying in The New York Times. “It’s got zero to do with progressive social policies.”

She’s also extremely thoughtful about what it takes to get to the top. At the Fortune Most Powerful Women’s Summit last month, Rometty encouraged aspiring female leaders to “be first and be lonely,” a mantra she learned from Palmisano. While most people are attracted to business lines or strategies others are taking, the money and the opportunities are where no one else is. She’s also fond of risk-taking as a way to grow in her career, warning women at the conference that “growth and comfort do not coexist.”

We won’t know for a while whether Palmisano made the best pick in Ginni Rometty, but from here, it looks like a good start. No drama. No surprises. Add a pioneering, low-key veteran performer, and that’s a pretty good recipe for succession planning done right.

More from On Leadership:

Is it a bad sign if boards are ‘looking for a woman’?

How to be a great boss

Mr. Schmidt goes to Washington

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By  |  10:30 AM ET, 10/26/2011

 
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