Too often, boards fail to pick the best CEO candidate because they focus on the wrong criteria. This three-step plan will help identify the right person for the top job.
Choosing the right CEO is among the top priorities for board directors. It may also be their most important responsibility. But the approach that most companies and their boards have used to find 21st-century leadership is a relic of the 20th century. Often, the board is simply presented with a short list of candidates assembled by others. “When it comes to CEO succession,” the chief human resources officer (CHRO) of a telecommunications giant told us in 2020, “we seem stuck with the best practices of the 1990s.”
This needs to change. The rolling waves of crises and challenges in the last two years—the pandemic, a strained global supply chain, inflation, talent shortages, geopolitical turbulence, as well as the rise of stakeholder capitalism—have created a new set of difficulties for corporate leaders. They have also scrambled succession plans in many companies, as some rising stars seemed to lose their footing when met with new leadership demands, while others raised their profiles by leading with agility and calm through all the churn. Consequently, the pressure to identify the right leader has never been more intense, which is why rethinking the succession process should be top of mind in boardrooms everywhere.
The ExCo Group’s Adam Bryant and David Reimer wrote this article for Strategy + Business.
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