CEO Succession Planning from A to Z
The long standing CEO of a large privately held company informed the Board that he would like to retire in two to three years. The Chair of the Governance Committee and Chair of the Board were immediately tasked with leading the CEO succession process and they decided to bring in Handfield Jones to assist them with this work.
Helen guided the Board through an intensive four-month process that included group meetings and one-on-one interviews with all the directors and the CEO to determine:
- what skills the next CEO would need
- which internal candidates were viable successors
- various scenarios and timing options for the succession event
Then, she helped the Board to establish a succession planning committee and helped them shape the roles of the full Board, the Committee and the CEO.
Throughout the next two years, Helen provided staff support to the Committee Chair. She advised on the assessment and development of the internal candidates, what to communicate to them, whether to conduct an external search, and the transition plan for the handover. She helped prepare for and contributed to numerous meetings of the Committee and the full Board, and created a series of documents that captured the entire process and kept the work plan on track.
In the end, the Chair of the Committee felt that they had run a robust process and was delighted that they had managed to get the Board, the incumbent CEO, and other key stakeholders aligned and supportive of the plan.
The Chair of the HR Committee of a high tech public company was seriously questioning whether their present CEO could lead the company through its next stage of development. However, the Chair of the Board thought the CEO should remain at the helm and had no stomach for turfing him out. The CEO was the founder and had successfully led the company through its IPO a few years earlier. The HR Committee Chair asked Handfield Jones to facilitate a decision making process that would help the Board reach an agreement on this potentially contentious issue.
Helen conducted an initial 5-hour meeting of the Board Chair and the three committee chairs. During the discussion, the group examined the present performance of the company, the current CEO’s skills, the strategic imperatives facing the company and the skills that would be needed in the CEO to meet the objectives. By the end of the session, the group had arrived at a consensus, which was that the company did indeed need a new CEO and that the current CEO would be asked to move to the Chair role.
Helen then supported the HR Committee, behind the scenes, to coordinate all the activities necessary to implement these decisions. She advised the Committee Chair on how best to lead the full Board through the next phase of the process and how to communicate the outcome to the CEO. She also advised the Board on how to set up an ad-hoc Succession Committee, drafted the mandate for that committee, and created a step-by-step plan for the Committee to follow. As her final task, Helen was asked to draft the new CEO and Chair position descriptions and create a plan to communicate the news.
In the end, a new CEO was brought on board and everyone agreed that it was the right thing for the company.
Navigating Tricky People Issues
A partner in a private equity firm called on Handfield Jones to discuss one of the companies his firm owned. He was on the Board of this company and knew that the CEO was planning to retire in 18-24 months. But, there were some challenging issues he was wondering how to handle.
At first glance, it seemed like a straightforward succession: the CEO had been very successful and was looking forward to completely retiring from the company; the Board functioned well as a team; the company wasn’t facing any major challenges; and there were three internal candidates. But there were some tricky factors complicating the issue. The CEO’s son was a possible candidate. The COO, who was on the Board, thought he would be a candidate, but the director who had called on Handfield Jones to help, felt that the COO lacked some key skills for the CEO role and thought one of the other directors was a stronger candidate.
Helen structured a consulting engagement to provide advice and suggestions, without any direct hands-on involvement. One of her first suggestions was that the Board form a Succession Committee. Then, over an eight month period, she advised the Committee on a number of topics including:
- the appropriate role for the current CEO in the process
- strategies for handling conflicts of interest
- defining the skills needed in the next CEO
- assessing the internal candidates and what, how, and when to communicate to them
- how to ensure retention of the candidates
- and how to develop a communication plan for various stakeholders.
Once the Committee and the Board reached a decision as to who they wanted for the next CEO, and what the communication plan would be, they were ready to implement the plan without any further consulting assistance.
