CEO Succession: Four Tips to Ensuring Success
CEO succession is not an event, but a series of actions orchestrated over the course of several years. The more one anticipates the nuances and implications of early actions and those that follow, the more successful the eventual selection and transition of the next CEO. Proactively expanding the focus of one’s lens throughout the process can reveal the more nuanced opportunities that might otherwise be overlooked. With this as a backdrop, here are four tips on how to make this go as successfully as possible.
1) The board should engage early and often.
While the ultimate responsibility of choosing the next CEO falls to the board, ensuring the development of a pipeline of senior talent falls under the responsibility of the CEO and CHRO. When a CEO transition is assumed to be many years out, the CEO and CHRO tend to drive this process, sometimes with minimal attention from the board. However, early and consistent engagement by the board can help build and maintain alignment regarding where the organization is heading and the implications for the type of skillsets and experiences that will be required to lead in the future. Finding opportunities for board members to interact with the identified individuals over the course of time allows the directors to form (and update) their own views of the executives and their current development needs. Finally, individual directors can serve as mentors to these executives, accelerating their evolution.
2) Focus on the entire C-suite as a constellation of roles to be filled.
Viewing succession in terms of the overall ensemble versus individual roles yields multiple benefits. A new CEO will not be successful without a highly capable team surrounding him or her. And it is unlikely that whoever is selected as the next CEO will meet all of the desired attributes and skillsets. Ensuring that complementary skills and experience exist elsewhere on the team can help to mitigate some of the risks. Expanding the view to the senior team also creates opportunities to develop individuals in the broader pipeline as a cohort, particularly where there is a similar gap across the group. Finally, if the incumbent senior executives are in equivalent stages of their lives, it is possible that many if not most will also choose to leave around the same time. Anticipating when the C-suite executives are likely to retire allows the option to intervene and alter the sequence and pacing to minimize disruption to the organization.
3) Leverage existing business issues within the organization.
For high-level executives who have had a vertical career trajectory through an individual function or business unit, assigning roles that expose them to other parts of the business without also creating either a demotion or huge risk for the organization can be a challenge. However, particularly in larger organizations, there are generally key initiatives, events, and other issues requiring savvy leadership that may provide stretch experiences for these executives while also allowing them to prove their abilities to flex into new areas. This shift in perspective can highlight multiple creative options for developing key executives while also addressing the emerging needs of the company.
4) Look at the whole person.
Skills, experience, exposure, and a solid track record are critical components to consider. However, self-insight, character, and personal resilience can also dictate whether or not a future senior executive will be able to make a consistent impact over time. These elements are ones that need to (and can) be proactively developed; it is considerably more challenging to positively impact these areas if ignored until a problem emerges. Organizations that value and systematically incorporate all aspects into their development processes are more likely to yield senior executives who can sustain the level of energy, health, focus, and integrity necessary to withstand the inevitable challenges they will face.
A simple widening of the focus of the lens one uses in considering CEO succession can yield a richer, more seamless, and ultimately, more successful outcome. By expanding the view, options, resources, and early warning signals can “magically” appear, enabling boards, CEOs, and CHROs to ensure they ultimately have highly capable senior executives ready to step into the roles when needed.
This also appeared on the Corporate Board Member website.