Is it common to hire an external successor for the CEO, COO or President role months or even years out?
It’s actually more common than your probably think—in a study by Stanford Business only 54% of companies are grooming internal candidates for the role, and 39% have no viable candidates for the role. A growing trend is to identify an external successor to the CEO or senior leader months, or even years before he or she retires. While many small and even mid-size companies just don’t have the internal talent or have possible successors who are also retiring, even large companies who have layers of management and leadership that can be groomed as possible successors struggle with finding the right fit.
In years past, as a retained, executive search firm, we would conduct CEO searches. In today’s environment, more often we are conducting “CEO succession searches”. These searches are Vice President and Senior Vice President level placements with the idea that the incumbent will be a successor to the CEO in anywhere from several months to a few years.
So how do you go about finding a successor? A good approach is to hire a “professional” executive who has a progressive track record of success in your industry and will report to the President, COO and/or CEO. That role could be a COO, or, for a sales-driven company, the VP of Sales, or VP of Engineering for an engineering- and product-driven company, or CFO in finance-driven companies etc. This approach gives the potential successor an opportunity to make a difference in your organization while they have time to learn about the company, products/services, customers and most importantly—the company culture. This will also give the company time to groom the “potential successor” and vet whether they are the right fit for the role.
In our next article we will discuss whether you are “ready for an external President or CEO?”