Does Life Go On After The Ceo Leaves?

Does Life Go On After The Ceo Leaves?

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The best leaders always prepare other leaders to succeed them. Selecting the next CEO is possibly the most important role of the board. At the same time, there is merit in the current CEO grooming a potential replacement so the company is not handicapped during the transition period.

Ensuring that the organization's senior staff person is leading operations with excellence is a critical role of the board. This entails always having an effective person in this role. Therefore, it includes selecting the CEO, providing regular performance feedback and development opportunities, and removing the CEO when organizational performance is inadequate. How the board fulfills this role and the direction it gives the current CEO about preparing promising internal candidates are the essence of a CEO succession plan.

1. Prepare for the unexpected. It is important for the board to decide how to pro-actively manage the risk of losing its current CEO. Just because your CEO is years away from retirement, or just started as CEO this year, does not mean that you will not be hiring a CEO next month! The board, or the CEO himself, may learn that the current CEO does not have the skills to achieve the organization's goals. The CEO may suddenly choose to accept a more appealing job offer or may have an accident that no longer allows him to work. Even if the CEO's accident only prevents him from working for one to three months, your organization is more likely to stay on course if you have a well-trained manager who can become the acting CEO for that period.

2. Assign the CEO's role. A board may implement a CEO succession plan by making a policy that directs the CEO to keep at least two other managers informed of key operational information at all times. Another board might ask the CEO to train two or more managers in the skills needed to prepare them for future CEO opportunities.

3. Assign the board members' roles. Another key aspect of a CEO succession plan is for the board to discuss, agree on, and write down the steps in its hiring process. Also indicate who will be responsible for each step. What tasks should be assigned to the board chair, the board HR committee, the board executive committee, the internal HR manager, an HR lawyer, an executive search consultant, or others, in order for all the bases to be covered?

Let's look at one high-profile company's CEO succession plan. General Electric (GE) is one of the companies that trains many promising individuals to move up the ladder. In the event that GE's CEO or division Vice Presidents leave, there is a good selection of strong candidates within the company that can be considered for the vacant position. Both the current CEO and the board have roles in preparing for the next CEO; the current CEO equips high potential employees, and the board explores the merits of several internal and external candidates. In any situation, the board is not required to submissively let the CEO's personal pick for the position trump their own decision-making process - the individual whom he has carefully groomed to be his successor. In fact, GE is supportive of candidates in their application for leadership positions in other organizations. GE believes that having experienced internal candidates who can hit the ground running when they are promoted to senior roles is so advantageous that they still win even if they lose several great employees to external opportunities. Jack Welch and others have said that training leaders that move to other organizations can be considered one of GE's community contributions. That makes their internal leadership training practices win/win.

The concepts GE has embraced for their CEO succession plan can be implemented in some form regardless of the size of the organization. Although companies like GE may have a bigger training budget and more management positions than your organization, you too can have internal candidates who are worth considering as your next CEO by simply investing a similar proportion of your salary dollars in leadership development.

Does your board have a written succession plan process? Do you have a policy that directs the current CEO to equip other staff to fulfill her role for an interim period or the long term? Do you monitor, at least annually, how well the CEO is complying with this policy? Does the board simply ratify the exiting CEO's personal recommendation, or do they consider multiple CEO candidates? How can you take more leadership in fulfilling your role to ensure that the chief operational officer is a great fit for your organization?

About the Author:
Cathie Leimbach wants to see organizations experience breakthrough success by practicing proven governance and leadership principles. As a senior consultant at STRIVE!, she gets to do exactly that. Read up on some of those proven principles on STRIVE!'s website: http://www.strive.com/articles/



Article Originally Published On: http://www.articlesnatch.com


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