This week's edition of BusinessWeek's featured headline was "CEO's of Tomorrow". The article then commented on the virtues of sanctioned CEO's in waiting; successions and successors that had been planned internally for a long period. I used to believe that succession planning was a good thing, but now have alternative thoughts. The pace of business change today mandates continuing to look at fresh approaches, seeing around corners, and re-thinking the strategies. Long standing in-line successors may tend to create an environment in which these following not-so-good attitudes are ensconced:
- making "saluting the chief" a winning philosophy
- perpetuating the existing CEO's mindset
- reducing the creative drive of potential other inside candidates
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reducing the probability of new outside-the-box thinking
Several further thoughts:
The article praised DuPont's CEO for a program of establishing a successor and working it for years, yet then said her "grooming" came principally from two actions: getting her appointed to the General Motors board (maybe that was intended to give her exposure to a bunch of things to not do), and getting her counseling to tame her impatience. I'm not sure that's a great prescription.
Research presented in an adjacent article created another point of view. University of Maryland professor Dezso determined, by studying over 1300 CEO changes, that two factors were irrelevant in predicting significant improvements from the new CEO (old CEO forced out or retired; new CEO comes from inside or outside). However, the factor that did predict significant performance improvement came when the old CEO had previously been highly protected, by having his buddies on the board or by having strong anti-takeover defenses.
Then to add my point of view; even existing high-performing CEO's need to change on occasion. Fire themselves, walk out the door, come back in the next day dis-connecting themselves from the previous positions they took and decisions they made, and act like a new person--just hired. CEO's that don't do this are doomed to slow or faster decline in the fortunes of their companies. CEO's that don't do this, and in addition train and hypnotize their long term successor into the same old-think, ........well, you know the outcome.
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