Introduction to CEO Succession
In the lifespan of most operating businesses, it is natural for Chief Executive Officers (CEOs) to be replaced at one point or another. Many of them will want to retire from their career, while others will want to move on to other positions and opportunities. And in some cases, a business may choose to replace its CEO due to new or unmet needs in leadership. But replacing the head of a company can prove to be a difficult and tedious process, especially when the individual has been with the company for a long time or even from its start. Still, CEO succession can ultimately provide a new outlook and breathe new life into a company.
Typically, companies will seek a replacement candidate as soon as possible during the CEO succession process. Often, it’s ideal to find a replacement that can begin working and training with the current CEO before he or she leaves the company, to see how things work. This also prevents a lapse in time without anyone heading the company, as a business requires strong leadership to keep all departments running smoothly. Shareholders could become anxious if they see that the CEO’s position is vacant, wondering what kind of negative impact this could have on the company overall. Any issues can be prevented by recruiting a new CEO to take over in a quick, yet efficient manner.
Many companies leave the recruitment and hiring up to their board of directors. This group often holds an initial meeting to lay out some of the basic qualifications they are looking for in a candidate. This allows the Human Resources (HR) department to screen a larger number of candidates and narrow down their selection pool. From this point, the board of directors might want to review the candidates further, before deciding who they would like to meet with and interview in person. Through in-person meetings, the board can gain a better idea of which candidates hold the right experience and know-how to function as the leader of the company. Ultimately, they will likely meet and vote on who is the most qualified candidate and the best fit for the job.
In recent news, Steve Ballmer announced that he plans to step down from his position as the CEO of Microsoft. It’s likely that the board has already begun the process of finding the right replacement, and many are wondering whether the process will result in substantial changes for Microsoft and the way that the business operates. In some cases, companies prefer to bring in a professional to help in the recruiting process, like an executive recruiting firm. Dennis Carey of Korn/Ferry International is a leader in the industry, and the author of CEO Succession. When something as important as the top leadership of a company is at stake, it may be best to receive professional and experienced input when searching for a new CEO.