Tag Archives: succession planning

insiders versus outsiders in CEO succession

insiders versus outsiders in CEO succession

Whether you agree or disagree with the premise, the title of a recent Fortune Magazine article is certainly an attention grabber. It is by Noel Tichy and entitled “J. C. Penney and the terrible costs of hiring an outsider CEO.” In the article, Tichy reviews J.C. Penney’s decision to hire Ron Johnson (who had previously enjoyed great success at Apple and Target), and the dismal failure that ensued.

While I am a person of strongly held views, I can see both sides of the insider versus outsider debate when it comes to CEO succession. Tichy presents several very strong arguments from the insider camp, where he seems to be firmly entrenched. When transformation is required, however, a strong case can also be made for bringing in a change agent.

Click on the picture image to read the entire article.

The Succession Planning Pitfall


No one wants to be accused of being unidimensional, and that of course goes for managers and leadership teams as well. But when conducting succession planning meetings, or creating future organization charts, leadership teams are often just that. Candidates for leadership roles are evaluated based on their performance only, and little to no consideration is given to the potential they demonstrate for success in these roles.

I recently read an article titled “Why Your Best Performers Usually Make the Worst Leaders”, and it reminded me once again of this very common pitfall. You can read the article here – http://www.tlnt.com/2014/10/07/why-your-best-performers-usually-make-the-worst-leaders/. In this case, the author is commenting on the common, but misguided practice of promoting good performers into leadership roles as a means to justify a higher salary, and advocating instead the simple solution of keeping them in their role and just awarding the pay increase. What the article also does, is highlight the lack of rigour most organizations demonstrate in identifying leadership potential.