Leadership and succession for the next normal
CEOs were already operating in a volatile, fast-changing business environment, but the Covid-19 pandemic has accelerated the challenges they must overcome to succeed. In June 2020, Savannah Group surveyed 90 chairs and CEOs from FTSE and PE-backed companies about their views on how the traits and skills required of a business leader are changing. In the responses to an open question about the fundamental challenges facing CEOs in the “next normal” arising from the crisis, several key themes emerged.
- An unprecedented pace of change facing businesses means CEOs must deal with a long list of challenges simultaneously and without the luxury of long lead times, including adapting business models, changing customer expectations, prioritising employee wellbeing and delivering on ESG issues.
- The leadership DNA of a successful CEO is evolving, as leaders increasingly have to operate in a “VUCA” environment which requires adaptability, agility, authentic leadership and strategic vision built on a breadth of knowledge.
- The Covid-19 crisis won’t revolutionise the skills and traits desired in a business leader, or the basic principles of CEO succession, but it will accelerate trends already present before the pandemic emerged.
- Chairs and boards must prepare proactively for both internal and external CEO succession scenarios, which means knowing where they want the business to be in five years and what kind of leader will get them there. Courting potential external successors or grooming an internal successor takes time.
5 QUESTIONS BOARDS NEED TO BE ABLE ANSWER:
- Are we clear on the future direction and longer term strategy of the company?
- Have we agreed the consequent requirements for CEO succession?
- Have we weighed the pros and cons of internal versus external candidates?
- Have we identified the highest calibre internal successor(s)?
- Do we have an ongoing process to benchmark internal candidates against the best external talent, so we are prepared for an unexpected succession event as well as an orderly replacement process?