The hidden CEOs among us

2 February 2015
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MANILA, Philippines – One of the never-ending topics of discussion among companies is succession planning — preparing for transition and the next generation of leadership, including the next CEO. Not a week goes by that there is not some speculation in the press regarding “Who will succeed the CEO?” at a prominent corporation.

There is undoubtedly some level of reality in this discussion. Sometimes a company and its CEO can become inextricably intertwined and one worries about “What will we do when the boss is gone?” Sometimes a CEO’s results are simply so stellar that one can only logically wonder if another less-godly person can continue the great trends!

One has to ponder the possibility, being a CEO myself, whether our egos and over-developed sense of pride don’t have quite a bit to do with it. It is, after all, difficult to really accept the fact that we are all expendable. It is painful to contemplate that, in fact, we can quite easily be replaced and the company won’t skip a beat. So we CEOs create a false sense of concern and fear around transition to perpetuate the myth that we are indeed irreplaceable. We claim the bench of talent is shallow and we don’t have clear candidates to replace.  This approach cements our legacy. We are so damn good, we simply cannot be replaced!

The facts suggest something different. All CEOs are easily replaceable. And the pool of talent is far wider than we can imagine.

During my quarter-century stay in Procter and Gamble, P&G was renowned as the “cradle of talent” for companies around the world. In fact, I recall a statistic once used in the US business, that at one point in time, “11 percent of the Fortune 500 CEOs got their start and training in P&G.” It seemed quite believable: Steve Ballmer of Microsoft, Steve Case of AOL, Meg Whitman of eBay (now HP), Paul Polman of Unilever … it’s a long list. And all are “graduates” of P&G’s brand-management program.

On the one hand, it’s a source of pride, yet on the other hand, a dubious distinction. How does one lose such a bevy of talent, invest so much in training only to have people leave and go build other companies?

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There are many explanations. One explanation is simply that the breadth of talent at P&G is so vast, they cannot accommodate all the talent in the “promote from within” culture of the company. Perhaps. But in my experience, the major explanation is this: We all have hidden CEOs among us, and because we tend to think of succession in a linear fashion, we “miss” the gems in our existing organizations who are actually fine CEO candidates!

I call them the “hidden CEOs” among us.

All a future CEO needs is three things: talent, character, and opportunity. What these hidden CEOs lack is only opportunity. They get missed and hence only when they step outside the barriers do they “break free” and show what they have.

Let me give you a real example right here in the Philippines.

During my time as CEO of P&G Philippines, our internal corporate legal counsel was an attorney by the name of Darlene Berberabe. She has been my gold standard for in-house counsel across my career. Never have I worked with a more talented, capable, honorable, business-minded attorney in the past 30 years. Darlene is my reference point. The best I have seen.

But shame on me for failing to think out of the box. Because she was an attorney — and in P&G we typically think of marketing talent as our pool of future CEO candidates — I never honestly considered her as a CEO candidate. We had a bright future mapped out for her in the legal function. Great career progress; she was well-regarded and had nothing but good things career-wise to look forward to. But I really never had her on the CEO radar screen. My mistake.

Well, in 2010, when the new Aquino administration was being formed, Vice President Binay tapped Darlene to head up the Pag-Ibig Fund. Now, the easiest way to describe Pag-Ibig is it is kind of like the blend of a bank and a mortgage company yet under government leadership. They help Philippine citizens of all means own their own housing — a noble mission, indeed.

Darlene accepted the offer, left a lucrative and prestigious career in the private sector with one of the world’s great companies, and decided to serve her country. And she took over a mess. The Delfin Lee scandal was dumped in her lap. Pag-Ibig membership, housing loan disbursement and net income had stagnated under the prior administration. She did not inherit a pretty picture.

Well, what a CEO she has become! Darlene’s incredible talent, coupled with the highest level of personal character and honor, was finally given opportunity. And she has performed as one of the finest CEOs in the nation. The Pag-Ibig record under her leadership speaks for itself:

Membership has grown 2.5 times from 2.59 million members to now 6.46 million!

The highest level of recognition by Commission on Audit in back-to-back years 2012 and 2013, demonstrating the high levels of integrity in which Pag-Ibig is being managed

The German certifying agency granted Pag-Ibig the ISO 9001 certification, demonstrating the high standards and global recognition of Pag-Ibig.

And most amazing of all, Pag-Ibig generated net income or “profits” of P16 billion! For perspective, this is on par with the country’s largest banks, such as BDO, yet Pag-Ibig is only one-fourth the size! So this government agency runs at efficiency so high it generates revenue on par with a publicly traded bank many multiples in size? Must be the first time in recent history a government entity anywhere on this planet was so effective!

If Darlene Berberabe was the CEO of a publicly traded company she would right now be signing a long-term agreement to stay on as CEO for years to come. Very few CEOs deliver these kinds of results. She had the talent. All she needed was an opportunity.

And character? Well, this is the most important ingredient of all, as the CEO sets the moral tone of the entire organization. I can go on and on about Darlene Berberabe’s ethics. Her honor. But let me just tell one simple story.

Character is exposed when the chips are down. When times are tough. It is easy to be magnanimous when things are easy. It costs nothing. It is how people step up in tough situations that dictates true character.

Well, Darlene Berberabe is showing her true character every single day, and very few people actually know about it. You see, Darlene was once married. She had a beautiful daughter with her former husband, and even though they are no longer husband and wife, she still loves him. She recognizes he is the father of her child. She realizes they had a life together once. And this means you still stand by someone’s side, whether on paper you are still “married” or not.

So one day, not long ago, Darlene’s former spouse, a healthy and supremely athletic man, collapses with a case of cardiac arrest. He slips into a coma and when he eventually comes out of it, he is faced with a massive uphill battle to regain even a sliver of his former self. It was a devastating blow and carried with it the specter of a difficult road to come of therapy and fulltime care.

They were not a married couple anymore. But who was in that hospital every day? Who set up trust funds and fundraising to help defray the costs? Who has handled and arranged the long-term care? Who is standing by his side every day, and handling the press and the other inquiries that come his way?

Darlene Berberabe is, when she doesn’t have to. It is out of honor. Respect. Commitment. This is what character is all about.

Samboy Lim is lucky to have Darlene by his side.

And the Philippines is lucky to have a world-class CEO serving the nation.

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