7 steps to becoming a ‘CEO Academy’
World Economic Forum published the article, “7 steps to becoming a ‘CEO Academy,’” written by Russell Reynolds Associates CEO Clarke Murphy. In it, he explains what a ‘CEO Academy’ company is and suggests steps that other companies can take to follow suit and help improve their own talent pipeline. The article is excerpted below.
Any discussion of CEO succession planning has to start with a single fact: most companies do a good job of developing internal candidates. According to one recent analysis, more than eight in 10 executives who are appointed to the top job came from within the organization. Internally appointed CEOs tend to stay in the role longer and often perform better than externally appointed candidates. For those reasons, internal candidates remain the preferred choice of corporate directors by a wide margin.
But while most companies do a good job of developing CEO candidates, a handful do a truly amazing job of it, producing a disproportionately high number of CEOs relative to their peers. Among the companies in the S&P 1500, General Electric produces nearly 25 times the average. IBM produces nearly 20 times more. Procter & Gamble, Honeywell International, HP, General Motors and United Technologies all produce at least 10 times more than average.
Earlier this year, we looked at 2,180 CEOs around the world to see where they worked during their careers. This analysis – which looked at the CEOs of every company listed on the S&P 1500, FTSE 250, DAX 30, EURONEXT 100, Hang Seng 50 and Nikkei 250 – resulted in the identification of 42 companies around the globe that are truly world-class executive talent developers.
The CEOs these companies produce – and the large volume of them – are not the result of good luck or coincidence, but of a commitment to a set of activities designed to continuously identify and develop tomorrow’s leaders; activities shared by a select group of other high-performing organizations around the world, which are adoptable by other companies that want to improve their own internal pipeline of potential CEO succession candidates.
We call these organizations CEO Academies – and their reach and impact in the marketplace are substantial.
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