First Annual Private Equity (PE) Leadership Survey | 2015

CEO succession: start now, mitigate the risks

AlixPartners' Annual PE Leadership Survey addressed just over 100 chief executives, corporate owners, and board members, and examined approaches to talent development and CEO succession planning practices. It assessed corporate management at all stages of the CEO succession process, from the identification and development of high-potential leadership candidates into prospective CEO successors to the methods ultimately used to assess and compare them. It also addressed performance-related expectations for new CEOs.

Whether a company is naming a new CEO in a long-planned transfer of power or quickly installing new leadership during a corporate crisis, the process is demonstrably strengthened by focusing on preparation and assessment. There is no single path to smooth leadership transitions, though several elements can be combined to craft the best approach for each company.

The risks are clear, yet the record of mismanaged leadership transitions is long and well-documented

Change in executive leadership is predictable, and when planned for and managed well, the transition can reinvigorate and renew a company’s mission, culture, values, and productivity. When mismanaged, however, a leadership transition can destabilize financial performance, erode competitive market advantage, shake employee and investor confidence, and damage company culture.