CEO Succession Planning: Hiring externally
It’s time for our final focus on CEO succession planning! In our previous two blogs on this topic, we have delved into the intricacies of hiring a new CEO for your business. It really is no easy task, with so many avenues to consider.
Catch up on the first two installments…
As we discussed previously, there are many benefits and pitfalls to consider when hiring internally. It is the same story for looking outside of the business. New senior hires take time and this will certainly be no exception.
Hiring a CEO externally
Every course of action a business can take varies – there is no ‘one size fits all’ when it comes to hiring a CEO. This is an extremely integral figure in your business, so needs to be the perfect fit. Here are some things to consider if you are looking outside of the business.
Advantages
- A fresh perspective: In a business, the team will be well accustomed to the processes. So much so that they might not recognise ways to improve them. A fresh pair of eyes will be able to immediately identify what is working and what could do with more streamlining. New solutions can bring a new and innovative way of operating.
- New skills and experience: Hiring someone with some experience outside of your industry has its benefits. Many skills are adaptable, so they will be able to bring these to the table. Something you didn’t think would work in your field of business might succeed with new experience.
- Not as hesitant to shake things up: As mentioned in our last post, an internal hire might want to avoid upset by making changes. An external hire will not have this obstacle. They will have experience in implementing new strategies, making changes and, most importantly, getting people on board.
- Demonstrates a new direction for the business: Seeing a business succeed gives the team a sense of stability that really propels them in their roles. While change can cause some apprehension, a brand new face should signal a new direction and a positive change. The board will not have made this decision easily, so it should be taken as an indication that this new CEO has already impressed thus far…and will have plenty more to prove.
Potential disadvantages
- Considering costs: A huge search like this will cost extra money and resources – that’s a given. Even the time dedicated to the process is a cost in itself. So, when you are succession planning, it’s important to factor in all recruitment costs and who will be involved. When people know what point in the process they will be involved in, it allows them to better plan their time in advance. Preparation is key.
- The speed of developing internal relationships: To be a successful leader, it takes a trusting and dedicated team. It is natural for a team to be cautious around a new leader, as they are used to a routine. This could mean that it takes a while longer for professional relationships to flourish. So, it is important to start cultivating the relationship before the new CEO even starts, with regular visits to the team – include this in your succession plan.
- Avoiding internal office politics: If there was an potential internal promotion, but you selected the external candidate, it can obviously cause some hurt or confused feelings in some cases. It is important to let all internal candidates know before any announcement is made to the whole business. Let them know why this decision was made and make it clear there is still plenty of room for growth. Furthermore, ensure all matters of the offer are wrapped up before making this announcement.
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