The Key to Managing CEO Succession

Among the most serious topics that can arise during the lifecycle of a business is the successful management of your C-Level personnel transitions.

It should well go without much elaboration that changing the head of a company (or any of its necessary departments) can lay the ground for turbulence. Naturally, we all seek a smooth changeover to not only minimize disruption, but get back on track as quickly as possible to the real business at hand.

CEO Succession - professionals with attache cases

When discussing effective CEO succession, there are typically six key prerequisites:

  1. A board that is in agreement with the company’s plans as well as the expectations of the new CEO
  2. The placement of an effectual CEO, in addition to the availability of sufficient choice of other quality candidates (both external and internal)
  3. An understanding as well as the management and minimization of the risks associated with transfer of CEO
  4. Agreement among stakeholders that the process of succession is fair, properly implemented, and ultimately a good decision
  5. The retention of other highly talented individuals, including non-selected candidates
  6. Preparation for an emergency situation during the succession process

Thus noted, we now turn to focus upon the individual in question:  What defining attributes are most aligned with a successful, hit-the-ground-running candidate?

Some of the impost important would be:

  • Integrity
  • Resilience
  • Vision
  • Innovation

That final point, innovation, is one that deserves a bit more examination given the incredible wave of Intrapreneurship and corporate/startup collaboration sweeping the globe; having a genuine, and perhaps game-changing, impact on the world of business at large.

So, what then, are some concerns and issues that commonly arise in the transition of CEOs?

Well, two of the most general issues that arise (and are often avoidable with some forethought) tend to be:

  • Losing (or missing) your best candidate   This occurs, most often, by focusing (to exclusion) upon external candidates, and overlooking the people available to you internally, already familiar with your personal corporate culture and primed to step forward.
  • Inbound Issues   Having to deal with the encumbrance of a rocky start: The initial transition can entail a range of potentially rocky terrain, including the individual’s ability (and familiarity) in communicating with a wide range of stakeholders, knowing how to develop and facilitate the plan for the outgoing CEO, and the ease of practice in negotiating his or her own compensation as the new CEO.

CEO Succession - person graphic

So, at this point, the primary question in mind should be, how does one properly plan to ensure a smooth transition? The single most valuable lesson presented, by virtue of which we will now further examine is to:

Explore and redefine your internal options. If you believe this to only refer to your standard employees, think again.  Internal does not necessarily mean immediately apparent and obvious.  Consider, for example, those whom your primary partner(s), investors, stakeholders, or board members may put forward. At any rate, any individual considered within these expanded “internal” boundaries will be, at the least, vetted by those invested and involved in the higher operations of the company, and/or already entrenched and intimately knowledgeable in the day-to-day operations of the company at large.

In Closing

While it may be tantalizing to explore wider options and pour over high-powered potential eager to join your team, embrace patience. Make no decisions externally until you have truly vetted and given a true chance to those within your arena who may be willing and able to step up; if they only knew they had a real chance to do so.

Fred Coon, CEO

 

Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200