Bonobos: Succession Planning Done Right
The most important job of any board is ensuring the company is led by the right CEO. In part, this means having a robust succession plan, right now.
Yesterday, the board of the online men’s clothing brand Bonobos announced a change at the top. It’s the culmination of years of careful work – after having done it the wrong way first.
Bonobos is a remarkable story in and of itself. Brian Spaly and Andy Dunn started the company in 2007, selling a few men’s pants on the Internet, and out of the trunk of Brian’s car. From those humble beginnings, Bonobos has grown to become the largest online clothing brand ever launched in the U.S., with 250 employees and distribution in all of Nordstrom’s 118 stores as well as 16 of its own retail showrooms, called “guideshops.” As of this month, Bonobos has sold more than one million pairs of chinos.
But the early years saw a certain amount of friction between Brian and Andy. Tensions escalated until Brian eventually left Bonobos to build Trunk Club, and Bonobos shifted from two co-founders to one. The transition was less than perfect. I was the company’s first investor, so I witnessed it firsthand.
Their parting started out as a textbook example of what to avoid in a leadership transition: unplanned, confusing to team members, and with bruised feelings. Ultimately, Brian and Andy were able to rise above it, retain their friendship, and end up in a great place. Andy went on to do a fantastic job as CEO of Bonobos, and Brian has done a wonderful job as CEO of Trunk Club.
But we all got lucky, and we knew it. So, soon after the split, we at Bonobos started to talk and think about the next transition.
Andy eventually decided he would move into the role of executive chairman of the company, and this time around, the Bonobos team took more than a year to evaluate new CEO candidates. The top CEO candidate met the entire board one-on-one, more than once. She attended meetings. She spent extensive time with many members of the executive team. She was able to methodically assess the business. And the team was able to gauge whether she was a fit.
Yesterday, Bonobos announced that its new CEO will be Francine Della Badia, the former president of retail for Coach. We believe that, thanks to the team’s homework, she will seamlessly take over the day-to-day operations of Bonobos. And from his new perch, Andy will lead the board, become Fran’s key advisor, and be the company’s most important ambassador as executive chairman.
Ensuring succession planning is every board’s number one responsibility, right now – even when it has a young, healthy committed CEO like Andy Dunn. When McDonald’s had to replace two CEOs in the space of three years (due to the untimely deaths of its two chief executives within nine months of each other), it drove home the urgency of good succession-planning in every company and at any stage of development. McDonald’s was fortunate to have had successors in the wings and its board was able to announce replacements before the markets opened after the untimely deaths of not one, but two CEOs.
Not many organizations – particularly small ones – are as fortunate. Few have two potential successors in place or even on a short list of possibilities, which is all the more reason to be prepared now.
The Bonobos board has made this most-important-of-all move with the collaboration, advice and cooperation of everyone – especially Andy Dunn, who will remain a critical river guide for the next stage of Bonobos’ development. This is how it should be done at every company. Whether you are now, or someday will be, a CEO or a board member, start planning for succession today. It’s never too early.
By Joel Peterson