‘Internal chaos’ just one consequence of poor CEO succession planning, Russell Reynolds’ Stamoulis says
The Fierce CEO article, “Internal chaos’ just one consequence of poor CEO succession planning, Russell Reynolds’ Stamoulis says,” quoted Russell Reynolds Associates Consultant Dean Stamoulis about the challenges of succession planning and the potential for “internal chaos” created by setting up internal competition. The article is excerpted below.
CEO succession planning is one of the thorniest and most important issues a company faces, and it comes with many challenges.
The wrong choice can send a company into a tailspin, no matter how good the rest of the executive ranks are. The CEO sets the company’s tone, good or bad, and that leadership has a bearing on every facet of operations.
A prospective CEO can look perfectly good on paper and be completely at odds with a company’s culture. That’s one of the reasons finding the right CEO can be no easy task, said Dean Stamoulis, managing director at Russell Reynolds Associates, a leadership advisory and search firm.
The board of directors technically chooses the CEO, but since many CEOs are chairmen of their companies' board there can be conflict. Often, advisory boards are set up.
“A CEO can have very strong feelings about who their successor should be” and this can create complications, Stamoulis said. “Internal chaos” can be created by setting up internal competition.
Also, a company can suffer if there is a lack of confidence conveyed in the current CEO.
The best approach is to get succession planning underway early, by as much as a year. During that time, make a deep analysis of what the future of the organization will look like. And have a constructive current CEO who works with the board.
To read the full article, click here.