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The Three Levels of Strategy Execution


About Strategy

Organisations need to reconsider the way they shape the strategic process. The time that this process is linear has gone. In the past strategy was a logic sequence of definition, execution and evaluation. It was enough to define targets and cascade them downwards.Read More

When the Number Becomes the Target – On Motivation.


The Story of the Priest

A catholic Priest prepared his sermon for the Sunday Mass. Every week he wrote a sermon which he ‘performed’ in three churches, spread across the city. In total about 30 people would hear his words.Read More

Never Forget Your Values.

As many organisations are heading for heavy waters, we should not forget the question of moral leadership. Never forget your values, David Ducheyne argues in a plea for a human approach of difficult decisions.Read More

CEO Succession – The King is Dead. Long Live the King

The new CEO

 A company in the hospitality business hired a new CEO, who came from a different industry. As it goes, the CEO went through a short period of induction before he came on stage to address a group of employees. He was kind of nervous about what he could say to these people who worked in an industry he did not know. He thought he had to be inspirational. So what he did marked the end of his reign. He took a powerpoint deck on leadership and governance from his previous company, changed the layout and presented it to the audience.


They gazed at him. They did not understand where this presentation was coming from. It was full of language that was strange to them. This CEO was unable to absorb the new culture and adopt a language that inspired trust.


He did not last long. 


Creatures of Habit

Let’s not underestimate the impact of previous expezriences on the behaviour of new CEO’s. Someone coming from GE might automatically assume that the GE way is appropriate to any other business. aNd so they will push for black belts. Someone coming from Toyota might want to introduce the Toyota Way. And someone coming from Spotify would probably want to copy its agile culture.

People are people, creatures of habit.

Outside or Inside?

The examples cited above might suggest that hiring a CEO from outside is not a good thing. No CEO can stay on for ever. Every CEO has an expiration date. And then there’s the decision on a new CEO with the eternal question: Should that CEO come from outside or from the inside?

This meta-analysis on CEO succession reveals that a new CEO has no impact on short-term performance. If the new CEO comes from within the organization, the impact on long-term performance is positive. And strangely enough when the CEO comes from outside, there seems to be a negative impact on long-term firm performance.


Why would that be?


CEOs coming from the outside usually undertake many strategic change projects. And strategic change leads to disruptions that have a negative impact on firm performance. High investments, uncertainty, …


But in times of crisis, continuity might be a bad thing. This could suggest that if an organization is in crisis it would be better anyway to hire an external CEO as he or she will be able to take more drastic decisions and go for needed strategic change. But measures must be undertaken to mitigate the collateral damage. Barging in is not the right approach. And the myth of the first 90 days should really be challenged.

The authors of the meta-analysis suggest to provide for sufficient guidance.


If a company is in need of strategic change, you’d better hire an outside CEO. But the risk is that the overall company performance is negatively impacted. The CEO lacks inside information and may take rapid decisions based on experiences from previous assignments.

What should governance do?

The non-executive board of directors that decides on the nomination of the new CEO should be aware of the risks and consequences of CEO succession and take into account the contextual factors.

CEO Succession

Boards should be aware of their decision biases as well. When the board is larger and has more independent members, it will decide more in favour of an outside CEO tcoming from a different industry, whereas a smaller board consisting of people from within the industry will go for a successor who comes from within (Jalal e.a. 2012).


The choice for a CEO should be determined by the context.


So if there is no need for strategic change, the choice should always be an internal successor. That requires preparation and planning. And the governance style should be one of coaching. If the board hires an outside CEO anyway, the right approach is to challenge them mainly on cultural matters.


If there’s a need for strategic change, the choice for an external CEO is probably better. But ath that moment, governance should challenge the new CEO in order to avoid strategic exaggeration and excessive collateral damage. Evidence suggests also that when hiring an outside CEO, they’d better come from a different industry (check Jalal e.a. 2012).


Whatever the reason for the exit of a CEO may be, the succession is a pivotal moment. Boards can adapt their guidance according to the profile and origin of the successor. A risk assessment to identify possible derailing factors is advisable, with extensive executive coaching to limit collateral damage.

Never assume a new CEO will do the right thing.


  • Abu M. Jalal, Alexandros P. Preza (2012). Outsider CEO succession and firm performance. Journal of Economics and Business. 64, 399–426
  • J. Schepker, Youngsang Kim, Pankaj C. Patel, Sherry M.B. Thatcher, Michael C. Campion (2017). CEO succession, strategic change, and post-successionperformance: A meta-analysis.
  • The Leadership Quarterly, 28 (6), 701-720

Never assume

Hiring a new CEO is a critical moment for a company. Don’t assume it will go well and try to detect the risks. Otolith can help your organization through a personal risk assessment and executive coaching. 

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When Strategies Do not Work

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This blog is about the 10 signals that can help you to determine whether or not the organisation you work for is in good shape and future proof.Read More

Why did Soldiers Fight in World War I?


Today 100 years ago, the first world war ended. A conflict with hundreds of thousands of casualties. The Great War, as it was known before there was a second conflict, still fascinates us. Apart from all the historical analyses I have a question about motivation. Why did soldiers fight during World War 1? What was their motivation to leave the trenches across the front and be maimed and slaughtered?Read More

One Year of Entrepreneurship

The First Year

A year has gone by since I have left the company I had worked for for 11 years. Many people thought I had married that company as I felt and behaved like an ambassador, representing it with passion in the outside world. And in many ways this organisation defined who I was, or who I had become.Read More

Experience versus Efficiency: How to Handle Change.

This blog is about the need to balance efficiency and experience.

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