Accelerate the Readiness of a CEO Candidate to Become the CEO
Our client, a $15B+ industry-leading corporation, was preparing for the most critical leadership transition: CEO succession. One internal candidate had risen above all others in the prior few years by wisely gathering the greatest variety of critical experiences across the diverse business units in the company as well as leading key functional roles over finance, technology and corporate strategy.
The company had achieved record levels of consistent performance in the prior few years and continued growth would only be achieved through significant diversification of the company’s portfolio with new innovations in its products and services and differentiating acquisitions. Shareholders expected the company to continue delivering strong investment returns and a CEO who simply managed the existing business effectively would not be regarded as an optimal choice for the future.
The current CEO asked ELP to assess and develop the internal CEO candidate so he would be fully prepared for the transition into the CEO role before being promoted. Our assessment revealed that the candidate was an ideal candidate, but one with some important capability gaps given the company’s growth priorities. While the candidate was a proven operator throughout his career, generating new value would require significantly new capabilities for himself and the company overall.
As the depth and breadth of his expertise far surpassed that of his colleagues, he struggled to separate himself from running the existing business. To successfully grow the company, he would need to create a strategy that further diversified the company, enact changes to the existing organization to support the strategy and direct his engagement away from the existing business and toward the generation of new growth opportunities.
ELP developed a trusted advisory relationship with the Board of Directors, the current CEO, the CEO candidate, and the current leadership team. We leveraged these relationships to both gather insights about the readiness of the candidate as well as advocate for his agenda with these important stakeholders. By engaging transparently with all of these stakeholders, we played a critical role in developing alignment around the candidate’s plan to grow the business and in support of his development.
As the strategic plan began to take shape, it became clear that some important changes needed to be made to the corporate structure and staff to support the plan. ELP supported the candidate in evaluating organization design and talent deployment decisions to best drive the plan’s success. Further, we helped the candidate develop alignment with the current CEO and the Board of Directors in order for him to move forward with those changes before he was promoted to the CEO role.
Perhaps most important to the candidate’s success as CEO, would be his ability to transition from running the existing business to focusing on how to create new sources of value in the future. He would need to engage his team in taking even greater accountability over their operations, while pressuring them to find new value sources. ELP helped the candidate expand the strategic planning process to further differentiate between incremental growth and differentiating sources of value. He led essential work that identified the most compelling acquisition opportunities in support of the growth plan. We also helped the candidate embed a more rigorous focus on evaluating the organization design and leadership bench supporting the strategic plan.
By the time the transition to CEO took place, ELP had helped ensure he would be received as entirely credible and capable by investors, the board, the leadership team, and the company’s employees. We helped the current CEO to continue transitioning responsibilities to the candidate so that, by the time he was named CEO, he had already assumed the majority of the responsibilities and had demonstrated command of those responsibilities.
ELP also helped the candidate design and implement an expanded strategy, structure and talent planning process that required his leaders to evaluate their existing business units and demonstrate they had a credible point of view and plan for improvement. This process helped the candidate step back from running the existing business units and play the more appropriate role of inspecting their performance and plans. By engaging his team in this manner, they felt more accountable and more supportive of him as the candidate for CEO.
Perhaps most importantly, by the time the candidate was elevated to the CEO position, he entered the role with a fully capable leadership team, a credible growth strategy, and structure and staffing changes implemented at the next two layers of the organization in support of the strategy. By helping the candidate complete the essential work of his role as CEO in advance of his promotion, we helped accelerate his transition into the role while increasing the board and investors’ confidence in his appointment.