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Closing the Floodgates: Retaining Senior Talent When the CEO Leaves

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We’ve all seen it.  A CEO leaves the organization and takes half of the senior management with him/her to their next gig.  Then the new CEO comes in and brings in his/her team, and lets go of the rest of senior management that stuck around.  You now have little or no organizational knowledge and perspective in the company, and the old saying (something like “those who forget history are doomed to repeat it”) rears it’s ugly face.  ((Coyne, Kevin P. and Coyn, Edward J. Sr.  May 2007.  “Surviving Your Next CEO.”  HBR May 2007, Pg 62))

HBR again points out a few considerations you should have in HR as you look into finding a new CEO:

  • When it’s time to find a new CEO, do you consider your succession plan?  Or do you simply go out and find the first available external candidate?
  • If you hire an external candidate, how do you influence what the new CEO thinks about your best leadership talent?  ((Ibid))

Research seems to indicate that in low and medium performing organizations, CEO’s are generally hired from outside the company.  This makes sense.  If you are not performing well, why would you want to replace the CEO with a person who operates from the incumbent’s organization?  On the other hand, if you are a high performing organization, chances are you have senior leaders that are in a good position to take the reigns of the company.  This is when it makes the most sense to hire from within because you don’t necessarily want radical change – you want to keep momentum going and maintain the sense of team that already exists.

There should also be another question looming in our minds as HR people.  How do you survive the new CEO as the top HR executive?  HBR states that while you may want to wait it out and see what the CEO wants of you, the better plan is to go to the CEO with ideas and initiatives.  New CEO’s are looking for people who want to help with a transformation and be part of a team.  Sitting idly while the CEO bypasses you is not the way to go.  ((Ibid))

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