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Average CEO tenure has been decreasing globally for the last six years and counting, while “extremely short” tenures have dramatically increased in the last two years. Boards are moving faster to replace CEOs amid increased scrutiny, market volatility, performance pressure, and influence from activists. All of this puts even greater pressure on boards to get right the most significant decision they will ever make.

Having supported dozens of CEO succession processes over the past 25 years, here are my top five principles to maximize the chances of success.

Trade high-level agreement for deep-level alignment. 

In any CEO succession process, there are usually several, significant stakeholders; the Chair, Board, individual Board members, incumbent CEO, human resources leader, internal candidates, external candidates, and external advisors. Each of these stakeholders has expectations about what the outcome should be, and how the process should run. To make matters even more interesting, typically, only one third of these expectations will be conscious and articulated; one third will be conscious but unspoken; and one third will be both unspoken and unconscious. Failure in a succession process can almost always be traced back to inadequate scoping of the project. Good intentions and high-level agreement are not enough. Successful succession processes are built upon a deep-level of alignment among all stakeholders on what excellence looks like, what their respective roles will be, what key inputs, boundaries and governance will be in place, as well as the key risks that must be mitigated.

Use the process for multiple outcomes. 

On the surface, the outcome of a CEO succession process is nothing more or less than to appoint a new CEO. Dig a little deeper, however, and there are many more outcomes available to a Board as they undertake this process. It presents an opportunity to signal support to a number of internal candidates, make an investment in their development, increase trust between the Board and management, improve the functioning of the Board, and tell a compelling story to the marketplace, among other outcomes. Given the magnitude of the decision and its impact on a range of key stakeholders, successful succession processes target a broader set of outcomes than just appointing a new CEO.

Choose a candidate fit for purpose, place and period. 

There is no generic formula for an ideal CEO. While many leadership attributes are timeless, much of an incoming CEO’s successful transition has to do with the time, place and context within which they are operating. The ‘ideal’ candidate profile should be determined by the current and future context of the business; the key forces that will likely impact the industry in the next 5-10 years; the scale of change required; the strategic choices facing the business; and how the business will likely win in the future. Of course, candidate experience is always a factor in CEO succession, but the key is whether that experience is helpful or unhelpful given the future business context. Sometimes, candidate potential and energy are even more important.

Get the story and the sequence right. 

Whenever an impending change of CEO becomes public, the first question we ask is ‘why?’ Why is he/she leaving? Why now? The vaguer the story, the more likely stakeholders will distrust it, and the more likely they will attribute sinister reasons for the change. In successful succession processes, the story about ‘why’ and ‘why now’ is well thought through and well-articulated. When stakeholders hear the story, they should hear something that is logical and substantive. Most importantly, they should hear a story that has benefits for them.

Don’t just appoint a CEO; make them successful. 

Nothing can prepare a successful candidate for the step-up into the CEO chair, especially if they have been promoted from among peers. The new CEO’s appointment should be the mid-point in the process, not the end. The incumbent CEO, Chair and human resources leader all have critical roles to play in supporting the new CEO in the months before and after their official start date. The new CEO should also have an experienced coach and mentor to help them craft and communicate a clear identity, aspirations and agenda for the organization. The most successful incoming CEOs focus inward, before they focus outward.

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