The Importance of Succession

5/31/13

In previous blogs I noted a couple of things. First, CEO succession seems to be high on the agenda of boards and is an area in which a lot of CHROs are looking for help. (That is why this year's CHRO survey - currently out - focused on the CHRO's role in CEO succession.) Second, I noted based on last year's survey that CEOs who displayed high levels of ethical leadership and servant leadership styles had executive teams that were far more cohesive and cooperative than those who did not. This blog merges these two ideas.

Given that a servant/ethical leadership style seems to be more functional than a narcissistic one, a question arises as to how to get the former, rather than the latter. In further exploration of our data from last year's survey we may have found one key: internal succession. CHROs reported whether their CEO had been promoted internally or hired from outside. Answers to this question correlated significantly with servant leadership (.25), Executive Leadership Team (ELT) dynamics (.22), and ethical leadership (.19), all indicating that those promoted internally were higher on these measures than those hired from outside.

This may make some sense as those promoted internally may be more grounded by the existing culture and their relationships with other ELT members. Those hired from outside, on the other hand, may assume they are better than the ELT members (lest why wouldn't one of them been promoted?) reinforcing (or creating) an egotism or narcissism that shows up in one's leadership style.

Thus, it seems that having a CEO promoted from within can create a more positive environment than hiring from outside. This year's CHRO survey will close down June 10th, and over the next few months I will be able to share some of the ways that CHROs are facilitating the CEO succession process.