One-third to one-half of new chief executives fail within their first 18 months. 
Why? Often people believe this is due to poor strategic choices by the new leader and sometimes because the board makes an imperfect choice – overestimating a candidate’s capability or hiring a leader that lacks the skill set required to fit the Pivot . But in reality, finding the right CEO for your business is only half of the puzzle. When a succession fails, the responsibility is often shared.
Many CEOs state that their on-boarding experience was just not helpful on the things they most needed and that figuring things out could have been a lot easier and happened a lot of faster.
Often boards, outgoing CEOs and chief human resource people don’t lay the groundwork for new CEOs to succeed. They often miss the more subtle intricacies that help set a CEO up for success, for example:
- How decisions are made (who has the authority);
- How change and innovation take place;
- Who has the most influence in the company;
- The ‘political’ dynamics of the senior leadership group (underlying egos, beliefs, coalitions); and
- The culture and how people work and think.
Not covering these subtle yet vital areas of how a business operates, can lead to a new CEO not being prepared, then wasting precious time trying to understand these dynamics. It can also lead to:
- Not making ground on the cultural changes needed to achieve their strategic agenda.
- Overestimating the willingness of people to change and abandon old, comfortable habits.
- Being unprepared to manage the organisation’s culture.
In RHR International's 2012 study of 23 major CEO transitions, 57% of CEOs promoted from inside and 83% hired from outside said their boards were "less" involved than they should have been .
Common mistakes by Boards:
- Underestimating the complex nature of succession, assuming it’s like similar lower level transition.
- Failing to really consider & communicate the intangibles, like culture and political aspects of the company, that may cause issues.
- Setting simple one-dimensional expectations of the new leader focused only on financial and operational goals (with no focus on cultural, political and people ones).
50% of companies reported providing no formal transition plan for new leaders .
To lay the right groundwork for new CEOs to succeed, HBR’s Ciampa (2016) recommends:
- Ensuring each person (i.e. Chair, Directors, CHRO, and outgoing CEO) knows their distinct role in the new CEO transition plan.
- Taking the time to understand & communicate the cultural, political and people elements of the business – especially those which may hinder a change agenda.
- Ensure the Board gets clarity from the incoming CEO on the best way to work together going forward (e.g. information needed, communication & meeting structures, & behaviours).
 Ciampa, Dan. (2016) After the Handshake. Harvard Business Review. December 2016.
 Charan, R. (2016) The Secrets of Great CEO Selection: An insider’s guide. Harvard Business Review. December 2016.
 Ciampa, Dan. (2016).
 RHR International. (2012).
 Ciampa, Dan. (2016).