How Insider CEOs Succeed

A recent HBR article [How Insider CEOs Succeed HBR, Andrew P. Chastian and Michael D. Watkins, March-April 2020] acknowledges that many organisations invest a lot in onboarding CEOs recruited externally but transitions for CEOs appointed from within are rarely handled with as much care.

In 2018, a PwC study of CEO turnover at 2,500 of the world’s largest companies found, 83% of successions involved internal candidates. So, while external hires tend to get more attention, most companies still typically promote CEOs from within.

Chastian and Watkins have identified insiders’ five key challenges: operating in the shadow of their own past; making early decisions that surprise and disappoint supporters; overseeing former peers; pacing change; and managing the outgoing CEO.

  1. Operating in the shadow of their past. One assumed advantage of an internal appointment is that people in the organisation already know them – meaning employees, direct reports, and board members have built-in expectations of them.

To deal with these pre-conceived expectations, new CEOs need to consciously adopt different attitudes, perspectives and approaches. They need to spend energy and resources on other areas to show their commitment to the entire organisation, not just from their previous areas of responsibility.

Escaping the shadow of your past requires a shift in mindset and approach.  At CDS we believe a coach can support the individual to clarify how they want to show up in their new role and identify how they can consciously and successfully make the ‘shift’.

  1. Making tough calls that disappoint supporters. In their new CEO role individuals quickly realise that they will have to make decisions that displease their allies – those individuals who backed them for the role and maybe expected to benefit from the promotion. But CEOs cannot favour previous allies and must avoid any perceptions that they do. A helpful shift in mindset and approach is to imagine that you have been recruited from outside with fresh eyes.

It is helpful for new CEOs to set up in-depth, objective business-review processes and engage with people who can give them honest, thoughtful assessments of the organisation. If the new CEO’s experience was gained in a specific function, she or he will need to rapidly and pro-actively develop close and open relationships with individuals from other parts of the organisation.

  1. Leading former peers and being less accessible to former reports. In nearly all cases CEOs who rose from within have to lead people who were formerly their peers. The plus side of this is knowing team members’ styles and capabilities well. However, it’s not always so easy. New leaders might be confronted with individuals who lost out getting promoted themselves.

As the CEO you need to rapidly assess all direct reports and other key stakeholders and begin to build “your” team. This means engaging with the people you really want to keep through early, direct conversations and figuring out as quickly as possible if there are some with whom you can’t work.

Part of the process entails helping former peers and reports recognise that your relationships with them have changed. You’ll need to explain that your priority is to do what’s best for the entire organisation – not letting prior relationships impact on your judgment.

  1. Establishing the right pace of change. CEOs appointed from within often have a long list of things they want to do now that they are in charge. However, it’s important to think about priorities and timing before act on the list. Why? Because the business might not be ready for the level of change the new CEO wants to drive. There can be a risk of change fatigue (and failure) if a CEO tries to do too much at once. The pace of change can put tremendous stress on individuals and on resources. Taking time to really understand the transformation priorities having understood the perceptions of many stakeholders is paramount.
  2. Managing the departure of the outgoing CEO. When the previous chief executive is leaving on good terms the transition can be carefully planned and executed. However, we recognise that any transfer of power presents challenges, especially if there is overlap between the outgoing and incoming leaders.

The new CEO has to devote significant effort to ensuring that their predecessors’ exits are as clear-cut and smooth as possible—especially if the outgoing leader expresses is struggling to let go.

A coach can help build a structured transition and communication plan to ensure the process is constructive and positive.

Transitioning with positive impact and ease

Far too often internally appointed CEOs are left to sink or swim.

We recognise that the primary responsibility for making a successful transition rests with the new CEO… AND we believe that the ease and positive impact of the transition can be greatly enhanced by appointing a Transition Coach.

The Transition Coach can support the new CEO to design a structured transition plan so that they can quickly get on with the business of leading. The plan will:

  • Clarify how you want to ‘show-up’ in your new role – what kind of leader do you want to be?
  • How to make this ‘re-brand’ happen – how do you ‘re-introduce’ yourself both internally and externally? What is the communication plan?
  • Create a comprehensive stakeholder engagement plan – so that you are having the right conversations with the right people right from the very beginning
  • Understand and implement to ‘shift’ in mindset, approach, skills and behaviours
  • Explore how to build and sustain a high performing top team
  • Ensure you can ‘let-go’ of your previous role in a planned and effective way
  • Plan how to get early structured feedback from all key stakeholders

We understand that being the CEO can be a lonely so we provide a safe space for the CEO to share their concerns and fears and work out strategies that will support them to sustain their energy, focus and well-being to succeed.

If you want to find out more about our CEO Transition Coaching contact us by email or call 0333 240 8115



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