GOOD GROOMING.(The Talk of the Town)

In July, 1994, Michael Eisner, the C.E.O. of the Walt Disney Company, underwent emergency quadruple-bypass surgery. Just before taking him to the operating room, the doctors gave him a little time to talk to his wife and his sons. Among other things (including his wish to be buried aboveground), Eisner wanted to discuss who would succeed him as C.E.O. if something went wrong. The only candidates he could come up with were his friends Barry Diller and Michael Ovitz. There were no Disney executives on his list. No one at the company, he thought, was capable of taking his place.

This was, as Eisner later wrote in a memo, a "sad truth." He had been in charge of Disney for a decade, long enough, you'd think, for him to develop a crop of up-and-comers. Yet, by his own account, he had failed to do so. In a different movie, his pre-op epiphany would have impelled him to change his ways. But, with the exception of an ill-considered attempt to turn Ovitz into an heir apparent--an experiment that ended after a year, with Eisner paying Ovitz a hundred million dollars to quit--Eisner spent his next decade at Disney as he had his first: refusing to accept that someday he'd have to step down. Investors clamored for Disney to institute a formal succession plan, but Eisner prevented the company's board of directors--most of whom he had handpicked--from producing one. Eventually, facts on the ground overtook him. Earlier this year, Disney's shareholders, weary of Eisner's dominance and of the company's underperformance, effectively deposed him as chairman of the board, and two weeks ago he announced that he would be quitting when his contract expires, in 2006. Disney's board then said that it would pick a new C.E.O. by June of next year, meaning that Eisner may be gone sooner than he expected. Putting off the question of succession allowed Eisner to discourage the emergence of rivals and to keep power concentrated in his own hands. Now it's the reason that that power is being taken away.

Eisner is not the only stubborn one. Most C.E.O.s know that they should devote time to helping their companies get along after they're gone, but historically few have done so. C.E.O.s don't like to think about succession, because it means contemplating the possibility that they're not indispensable. A survey of top companies by the headhunting firm Korn/Ferry found that in 2001 only a third had a formal succession process in place. The rest were winging it.

As ever, ignoring the problem only makes it worse. Without a plan in place, a company must resort to a harried talent search, the boardroom equivalent of Eisner's sickbed pronunciamento. The board is left considering press clippings and resumes. Under such conditions, the candidates tend to come from outside the company, and outsiders, as studies have shown, are more likely to lead companies astray.

By contrast, companies that like to look for C.E.O. candidates in their own ...