Succession Planning in Business
What Apple’s CEO Handover Tells Business Owners About Succession Planning
Apple announced last week that Tim Cook will step aside as chief executive on 1 September 2026, and hand the role to the current head of hardware engineering, John Ternus. Cook will remain closely involved as executive chairman.
If you are a business owner or founder, you likely think about who is going to take over your business when you decide to retire or withdraw from it. Apple described their leadership change as “a thoughtful, long-term succession planning process”.
What lessons can be gleaned from Apple’s approach?
Succession takes time, so start early
Most obviously, succession planning needs to start well before the founder or business owner decides they want to leave.
John Ternus has spent 25 years at Apple and has been involved in many of its product lines. He described Tim Cook as his mentor, suggesting that, at least in recent years, he has been steadily expanding his responsibilities and receiving incremental training and experience to make him ready for the role.
Succession then, is about building over time and not simply identifying a replacement at the last minute.
In practical terms, this means:
- Identifying potential successors well before they are needed.
- Rotating responsibilities so that they can build a breadth of experience.
- Testing their decision-making and building their confidence to take tough decisions when under pressure.
- Allowing room for failure while you are still around.
Even if the person you have identified never takes the top job, the process can still strengthen your business.
Internal successors can reduce risk
Apple’s decision to promote from within, means that its new CEO will have knowledge about the business that cannot be bought or quickly transferred to an external hire.
Hiring someone who does not know the business to take over can leave it exposed to risks. For instance, business strategy can be disrupted, there can be a loss of vital relationships, and the business can become unsettled while a new status quo becomes established.
Promoting an internal successor does not eliminate those risks, but it lessens the unknowns. Continuity in leadership can provide stability.
The outgoing leader still matters
Another notable feature of the change in Apple’s leadership is that Tim Cook is moving to an executive chairman role, rather than there being a clean break. His continued involvement means his hard-won experience remains available to the business, but by defining a new role, he does not interfere with the authority of the new CEO.
For business owners, a common challenge is how to step back in the business without becoming a bottleneck. If this is poorly handled, it can lead to:
- Confused accountability amongst staff.
- Slow decision-making.
- A successor who feels undermined.
The lesson is not that owners must remain involved, but rather that if they do, their roles need to be clearly redefined.
Final thoughts
Apple’s CEO handover is not a template for every business, but it does provide some food for thought. Succession planning often works best when it is done gradually and deliberately.
If you would like personalised advice on succession planning, the tax issues that go along with it, or on other areas of making your business grow, please get in touch on 01384 376 964. We would be happy to help you!
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Folkes Worton LLP Chartered Accountants
Accounting for the Future