Chapter 1: Underestimating strategic alignment efforts when defining success factors


Boards often underestimate the effort, costs, and risks that accompany successful strategic alignment on succession plans, often starting the process too late, failing to articulate a forward-looking CEO mandate, and conflating stakeholder agreement with stakeholder alignment.



Trap 1: Procrastinating


49% of board directors and CHROs admitted that the CEO succession process began less than one year before the CEO change.



Boards tend to procrastinate when it comes to making important CEO succession decisions. Via the Global Leadership Monitor, we asked board directors and CHROs who were involved in a CEO transition in the last three years to indicate when the CEO succession process started. In reflecting on their most recent CEO change, 42% said that their CEO succession process began one to two years prior to the actual CEO change, and 49% admitted that the process began less than one year before. This is an issue. Our experts recommend that, for the best results, succession discussion should begin at least four years before a CEO change is likely to happen.

When an organization is performing well, boards may hesitate to broach CEO succession, instead allowing the incumbent CEO to dictate when the process begins, or wait until the last minute to take action. This tendency to procrastinate, or cave into the importance-immediacy paradox (tabling long-term strategic discussions to attend to urgent short-term issues), is natural in environments with a steady state of distraction, complexity, and uncertainty.

With macro forces causing volatility and uncertainty, many boards are grappling with strained attention and problem-solving capacity, either turning to other issues or allowing themselves buffer time before addressing the CEO office. To prepare for these unpredictable market forces and bolster leadership health, boards cannot afford to mistime appointing the next CEO. They must consider how to proactively, intentionally, and continuously bring up the topic of CEO succession for discussion.




Trap 2: Anchoring

Boards tend to begin defining successful attributes by debating the current CEO’s strengths and weaknesses, instead of understanding market and leadership trends. This premature conversation causes boards to unwittingly yield to anchoring bias, becoming overly focused on identifying individuals who either mirror the current CEO or sharply contrast them. This anchoring effect can be especially pronounced in a couple of scenarios—when a successful CEO retires, boards tend to want an identical replacement; when a CEO has been asked to step down, boards gravitate toward leaders with polar opposite profiles.




Trap 3: Conflating stakeholder agreement with alignment

Boards and nominating committees will often reach an agreement on the key forces that are most affecting the organization, identifying a ‘wish list’ of ideal capabilities and experiences that the next CEO needs to succeed. However, rarely will one candidate meet every single criterion on this list. How boards prioritize across that wish list is critical—and is often not given sufficient attention.

As the process continues and the board shifts from engaging with concepts to engaging with candidates (each with their strengths and weaknesses), that initial agreement can quickly unravel. Divergent views on priorities make it clear that boards lack true alignment. An early conflation of agreement and alignment can have cascading consequences across the succession process, manifesting in ineffective candidate evaluations (because the decision-makers are not using the same language or parameters for measuring candidates) and poor candidate experiences (because the interviewers do not present a cohesive role articulation).



How can boards overcome these CEO succession decision-making complexities?

  • Integrate evergreen succession into discussions.
    When CEO succession is a consistent boardroom topic, boards don’t have to worry about offending the incumbent CEO or feeling beholden to external circumstances. Independent board leaders (chairs or lead independent directors) who involve the CEO in these discussions from the get-go help enforce the idea that succession is a transparent, disclosable, and iterative process. This enables the organization to develop an iterative ‘CEO succession mindset’.
  • Leverage a macro-level framework to build a dynamic success profile.
    Use a straightforward model that allows stakeholders to identify future leadership needs, current leadership capabilities, and close any gaps. This will help stakeholders define what the next CEO needs to accomplish, while also enabling stakeholders to evolve the success profile as markets fluctuate and organizational context changes.
  • Invest in and continually test alignment.
    Force ranking success profile attributes allows the board and incumbent CEO to further build out a dynamic success profile, enabling the board to surface assumptions and address inconsistencies within the group. This process will help the independent board leader to monitor alignment, evolve the succession strategy, and guide the board on how to respond to new leadership needs as events unfold and hold unified expectations as to how the succession strategy needs to pivot.






Data sourced from Russell Reynolds Associates’ H1 2023 Global Leadership Monitor, which surveyed 500 CEOs, board directors, and CHROs on the state of CEO succession and stakeholder perspectives, and interviews with 14 of our Board and CEO Advisory Partners consultants.





Joy Tan and Tom Handcock of RRA’s Center for Leadership Insight conducted the research and authored this report.

Learn more about the authors and The Center for Leadership Insight

Justus O’Brien is a senior member of Russell Reynolds Associates’ Board and CEO Advisory Partners in the Americas. He is based in New York.
Dean Stamoulis is a senior member of Russell Reynolds Associates’ Board and CEO Advisory Partners in the Americas. He is based in Atlanta.



The authors would like to thank contributors from Russell Reynolds Associates’ Board and CEO Advisory Partners who participated for their time and their valuable perspective:


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