CEO Succession Planning: Hiring internally
CEO succession planning requires a detailed recruitment strategy. In our previous blog installment on this subject, we explained the concept of succession planning when hiring a CEO. We touched upon the many challenges of hiring such a key figure in the business – including whether or not you should look within the business for the next CEO.
It’s not quite a simple answer. There are benefits for hiring both internally and externally. Ultimately, it’s about what is right for the business and what the CEO needs to accomplish. However, we wanted to provide guidance for your consideration when it comes to internal vs external CEO succession planning. For our next succession planning blog, we will focus on the strategy of hiring a CEO internally.
Hiring a CEO internally
As we have previously mentioned, the clue is in the name. Succession planning means it’s your chance to consider all options and decide the best course of action. When it comes to internal succession planning, here are some things to think about.
Advantages
- Offers stability: Change can be hard. The outgoing CEO has likely made a strong impact in their time, so when you let the team know of the departure they might feel uncertain about what is next. Having a familiar face in the succession plan will take some of the edge off these feelings, as the continuity will help employees feel at ease.
- Understanding of the culture: A good company culture doesn’t happen overnight. Furthermore, a new employee needs time to adapt before finding their feet within the day-to-day life of the business. An internal prospect for a CEO position will already have this advantage. It could help them navigate any difficult choices more efficiently, while knowing what obstacles to expect.
- Demonstrates employee growth: If the whole business sees one of their own be promoted into such an important position, it can inspire them to continue on in the business to achieve their own career growth. It is also motivational for potential candidates you want to attract for other roles.
- Experience gained from the current CEO: The potential successors in your plan are likely to have worked very closely with the outgoing CEO. With this in mind, the transition between the two will be much smoother and can even begin quicker than with an external candidate who likely has a long notice period to serve.
Potential disadvantages
- Hesitance towards change: One thing to think about is how long this person has been in the business and therefore used to the way things work. Will they be hesitant to suggest big changes? It’s particularly harder if they have strong bonds with the team – as mentioned, change is tricky to navigate at first. So, they may avoid shaking things up so not to upset the people they work with so closely.
- Ensuring a fair and objective process: Office politics can cause quite the stir. A process such as this will be magnified, as it is a decision that will change the internal dynamics. So, the succession plan needs to be clear to all of those involved. Highlight exactly what the new CEO will need and what it is you are looking for in terms of business direction. The candidate can see the criteria and understand that an objective decision was made to suit this criteria.
- Replacing the successor: If they are succeeding the outgoing CEO, it is likely the chosen candidate is very good at what they do. In all your planning, be sure to consider who will step into this role once the transition takes place. If you don’t prioritise this also, there could be unwelcome disruption in an already busy time of change.
Can we help you with CEO succession planning?
Stay tuned for our next part in the succession planning series, where we will explore the pros and cons of hiring a CEO externally. TechNET CxO is the trusted executive search partner for many technology and IT companies! Explore the many ways we can help you…
