CEO Succession Case Study

We had been helping this financial services company select its leaders for several years.  Then they came to us with an especially important assignment:  Help them select their next CEO! This is the CEO succession case study that resulted.

Challenge: How to Best Make the Decision?

When the selection committee asked our help in choosing their next CEO, we told them there were 2 options. They could do a fairly quick process. Or we could design a more in depth process that would increase the odds of a great decision, but would take a little longer.  Given the importance of this hire, they opted for the latter.

Solution: Multiple Data Sources = Optimal Selection Decision

There were 3 internal candidates for the position. How to select the best one to lead the firm forward?

While the company had a job description, they didn’t have clearly spelled out exactly what they were looking for. We interviewed board members and leaders who worked with the CEO to get their thoughts on what competencies were important. Key producers from various offices around the country were coming in town for a meeting. We got their input as well, which they appreciated. Out of this emerged a set of CEO, behaviorally-defined competencies which, as it turns out, included 3-4 new items that hadn’t been on their radar before. These competencies enabled us to customize a 360 survey and a battery of assessment measures to get at the competencies the company had defined.

Additionally, we interviewed the candidates’ direct reports and peers. We also got a sense of the candidates’ visions and prioritizations by asking them to write a feature Fortune Magazine article about the firm as it would look 5 years from now. We added this data to the biographical and performance data that the company had compiled on the 3 contenders.

We compiled all of this information and presented it to the 12-member selection committee. The committee then made its decision.

Results: High Buy-In, Strong Earnings Growth

This CEO Selection Process yielded a number of positive results:

  • There was strong buy-in throughout the firm for the CEO choice, given that many leaders had input into the decision process. 
  • The organization enjoyed strong growth in revenue, net income, and employee size during the CEO’s tenure.
  • At the company’s urging, the CEO stayed in his position for 13 years–30% more than the average CEO tenure.

Do you have any leaders approaching retirement in the next 5 years? Please contact us and we’d be pleased to help you think through some options for a smooth leadership transition.  We’d love to have you be our next successful CEO succession case study!

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