CEO Transition: The Ultimate Disruptor

By Marsha Koelmel

Co-President of Catapult

Leadership transitions are known to cause some degree of disruption within an organization. Depending on the position, the change may impact not only the leader’s team but also client relationships and the confidence of investors and regulatory bodies. However, the transition of the CEO is the one time in an organization’s life when every aspect of the status quo is disrupted simultaneously. How can Board members prepare for this level of disruption and ensure a successful CEO transition?

1. Ensure that the strategic plan is current, clear, and well communicated.

Alignment among Board, CEO and Senior Leaders on the strategic direction of the organization creates shared goals and common ground when key decisions need to be made. This is always important.

Keeping the plan current, clear and well communicated ensures that, even in a sudden loss of leadership scenario, key leaders can stay focused on established priorities and performance objectives. Having a North Star provides clarity that will guide decisions in the absence of a Chief Executive.

If your organization does not have an up-to-date Strategic Plan, this is a very good place to start!

2. Consider the needs and potential concerns of all constituents – internal and external.

Make a list of all constituents, both internal and external, and consider their reaction to a change in the Chief Executive position. Some examples would be: the Senior Leadership Team, Employees, Key Clients or Customers, Major Donors, Funders, Regulatory Bodies. What does it mean to them? What potential concerns might they have? Develop a communication plan to connect in a meaningful way with all constituents. Assign responsible parties, timelines, speaking points and methods of communication. Provide regular updates on progress or changes.

Senior Leaders are an important “leadership constant” when a CEO transitions. Under normal circumstances, it is the role of the CEO to interact with and lead the Senior Leadership Team. In the event of a CEO transition, it becomes the responsibility of the Board to engage and empower this team to provide seamless leadership until the new CEO is in place and up to speed. Regardless of previous communication protocols, the Board will be well served to partner up with Senior Leaders to create and execute a shared transition plan.

3. Develop clear short and long-term priorities and performance objectives that are well understood by the Board and the new leader.

The new CEO is getting on a moving train. Help them out by identifying any existing short-term challenges that need to be addressed quickly and/or opportunities that require immediate action. Ensure that the CEO has appropriate knowledge and resources necessary to address these issues and establish expectations for communication with the Board on progress updates. This is a great opportunity to engage the Senior Leadership Team in the transition process by partnering them up with the new CEO on these urgent and important matters.

If the organization has an active strategic plan with established long-term priorities, identify which parts of the plan are most critical to accomplish and which are open to adaptation.

4. Discuss the degree of change that is needed and how the Board will support the new leader through the change process.

Is the CEO joining a stable organization, a turn-around, or something in between? The Board should be very clear about the degree of change that will be needed and the potential impact on the team, the culture, clients, etc.

Assessments used during the hiring process can help Boards understand the style that a new leader will use to accomplish objectives, initiate and lead change and assimilate to the new environment. Understanding the degree of change that will be needed will help identify not only the experience and capabilities but also the style that will best match with the culture and the challenge of the role.

Identify who on the Board will be the primary contact for the CEO to check in with, discuss transition matters, ask questions, and request support when needed.

5. Plan for regular check-ins and encourage candid dialogue around how the transition is being received by constituents.

CEO transitions are one of the most disruptive changes that an organization will experience. The Board, CEO and Senior Leadership team all play a part in ensuring that key constituents are being cared for throughout the transition. The first year is a year of firsts, especially first impressions. Checking in periodically to listen and understand how the change is being received by all constituents will enable leadership to adapt and adjust, if necessary, to clear up miscommunication or misperceptions and to show that you care.

The Board focus should be the CEO and important external constituents. The CEO & Senior Leadership Team can work together to establish a plan to meet with all constituents regularly throughout the first year. Regular interactions that include opportunities to share feedback, ask questions and make suggestions go a long way in staying connected with key people and creating a seamless transition.

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