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How internal climbers are successful


Companies looking for a successor for a top job usually play it safe: They promote one of their own managers who is very familiar with the organization. But internal movers don't have it easier than CEOs who come from outside.

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In Germany, too, the path to a top job often goes through a board position in the same company.

For this article, HBm photo editor Martin Richter viewed photo productions about CEOs who rose internally.

The series features detailed shots by Joe Kaeser from Siemens, Christian Sewing from Deutsche Bank and Werner Baumann from Bayer.


When companies appoint one of their top managers as the new CEO, it often seems like the next logical step.

The promotion is the result of many years or even decades of hard work.

CEOs who rose internally were mostly already board members or headed an important business area.

You have built good relationships with top management and are trusted by the board.


Andrew P. Chastain

is President and CEO of WittKieffer HR consultancy in the Chicago area.

The executive search company focuses on healthcare.

Michael D. Watkins

is co-founder of the management consultancy Genesis Advisers, professor for leadership and organizational change at the IMD Business School in Switzerland and author of "The First 90 Days" (Harvard Business Review Press 2013) and of "Master Your Next Move" ( Harvard Business Review Press 2019).

Even more: you know the company, its history and its culture.

You are very familiar with the strategy and may even have played a leading role in developing it.

They enjoy credibility and broad support.

That is why it is easier for them to find their way around in their new role than managers who come from outside.

At least that's what you might think.

In fact, the resistance for internally promoted CEOs is no less than for external candidates.

They are just of a different nature.

We know from our studies and our work with CEOs: There are five major hurdles that new bosses have to overcome.

You have to: leave the past behind;

make difficult decisions that may offend their supporters;

lead former colleagues;

Approach changes properly;

and manage the departure of the predecessor.

Every newly appointed boss has to struggle with these challenges in some way.

In this article we provide tips on how to successfully circumvent these obstacles.

They are based on dozens of conversations with internally promoted CEOs.

Our advice should not only serve as a compass for executives on their way to the top, but also for departing CEOs, HR managers, managers and boards who want to support their new top people.

Some insights are also important for lower-level succession planning.

The five hurdles

In 2018, the auditing and consulting company PwC examined management changes in 2,500 of the world's largest companies.

One result was that an internal candidate won the race in 83 percent of the cases.

In other words, although external appointments often receive more attention, internal successors are the rule.

With them, companies know where they stand - the risk is calculable.

But precisely because they are considered safe candidates, companies often underestimate the challenges that CEOs face from within their own ranks.

Leave the past behind


The Problem

Companies invest a lot of money in onboarding CEOs who are new to the organization.

However, if they promote their own managers to the top position, this person receives little support.

Interviews with internal climbers show that they have to overcome five hurdles: leaving the past behind;

make difficult decisions that may offend their supporters;

lead former colleagues;

Approach changes properly;

and manage the departure of the predecessor.

The Solution

New CEOs should be aware of the five hurdles and develop targeted strategies to overcome them.

To do this, they also need the help of the board, their management team and those responsible in the HR and PR departments.

A supposed advantage of internally appointed CEOs is their familiarity within the organization.

You have a long list of successes and rely on a broad network and proven leadership and work style.

At the same time, this means that employees and board members have fixed expectations of them.

"You don't go through CEO school. Everyone has worked their way up in their own area," says David Verinder, who spent four years as CFO and just as many years as COO at the hospital operator Sarasota Memorial Health Care System before taking over the post.

"This means that people have predefined expectations - according to the motto: 'Oh, that's the former CFO. Quality is not important to him. He only looks at the numbers.'" To counteract this, internal climbers have to approach important business opportunities and risks reposition.

For Verinder, this meant at the beginning of his tenure: he put the focus on strategy and growth planning and put financial questions and day-to-day business aside.

Because here the employees already knew where he was.

"To strike a balance, you need to be much more concerned with the areas that weren't important in your previous position," he says.

Harris Pastides can only agree with this.

The former president of the University of South Carolina was initially vice president of research and health science for the university before assuming the chief position.

After the promotion, "I had to invest energy and resources in other areas to show that I cared about the entire university, not just my previous areas of responsibility," he recalls.

New CEOs often lack the necessary objectivity when it comes to their previous projects.

When Richard Wilkerson rose from executive vice president of human resources for Michelin's North American operations to chairman and president in 2008, many of his colleagues were surprised.

He had managed several production areas and was well networked at all levels of the company.

"However, the HR department is not a classic stop on the way to the top," says Wilkerson, who retired in 2011.

Therefore, the employees should get to know him again: "It was important to me to be very present from the start and to promote my philosophy of Servant Leadership throughout the company."

Leaving the shadows of the past behind requires a rethink, says Lydia Jumonville.

In 2017, she rose from CFO to interim CEO and ultimately CEO of the Colorado-based healthcare company SCL Health.

"You have to think about the new role at an early stage and then consciously drop the old one step by step," she advises.

Making difficult decisions

Once in office, CEOs often find they have to make decisions and compromise that could disappoint their pioneers.

One CEO, who enjoyed the full support of the board and management prior to his appointment, told us that the honeymoon was over quickly: "It took a full three days before I had to make a far-reaching decision that I knew would be Some people's ideas completely contradicted. "

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Source: spiegel

All news articles on 2020-10-30

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