Insider-Outsiders as CEO Candidates

January 02, 2015

Insider-Outsiders as CEO Candidates

We all know about boards choosing “insider” or “outsider” CEOs as successors. For years, there’s been debates about which is better and usually insider CEOs take the lead. I used to track CEO succession when I started my first blog ever, www.ceogo.com. We were one of the first firms to track the comings and goings of CEOs, reasons why and CEOs’ average tenure. At the time, we defined insider CEOs as executives who had worked inside the company for three or more years before being announced as the new CEO. Outsider CEOs were defined as executives who either had never worked for the company or had been employed by the company for less than three years before being announced CEO. Of course, all of this is predicated on the premise that the board has a succession process in place in the first place. But sorry to have to break the news but two-thirds of American public and private companies have no such plan (National Association of Corporate Directors). A professor at Harvard Business School, Joseph Bower, now recommends that boards of directors pay attention to “insider-outsiders,” that is, strong candidates who know enough about the company to ensure continuity but also have outside experience from having spent time at other companies or at a non-HQ office fairly far from the center. In other words, someone who is not tainted by “head-office group think.” At least these individuals wont be totally insular from having spent their entire careers at the company and they will be a mash up of internal and external perceptions so that they can bring new thinking into the fold. Considering that Millennials switch jobs so often (last I heard was that we can expect 11 different jobs in a career path), we might actually see a new wave of young CEOs who have spent time at several different companies before bedding down with one institution for more than a few short years. Time will tell but thought the idea of an insider-outsider was a new twist.
 

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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