Next In Line

With the pandemic rolling on, CEOs have had to relinquish some critical duties to local leaders. Are they happy about it?

He was the face of the company. For years, the firm’s CEO would lead all the town halls while making a point of visiting key operations and managers throughout the firm. Of course, all this has become harder now that “headquarters” is the CEO’s den.

Welcome to yet another sudden shift in corporate structuring brought on by the pandemic. Unable to travel anywhere except to perhaps their nearest office, CEOs find themselves relinquishing a lot of strategic and tactical decisions to their deputies, who are closer to the field operations and people. It is a shift some CEOs have embraced as a way to assess the future leadership potential of their deputies. But others are struggling as they adjust to giving up control.

For her part, Christine Rivers, a senior client partner in Korn Ferry’s Board and CEO Services practice, says the change may spur on innovations and strong leadership sooner than normal—she calls it “succession planning at its best.” But Rivers also says some CEOs could have good reason to be nervous. “Their deputies may not be up to the task,” she says. “Or it can create the impression among employees that no one is really in charge.”

Even if informally done, elevating deputies’ roles is a reversal from the past. History has shown that organizations typically put succession planning on hold during a recession. Part of the reason for that is because CEOs feel responsible for navigating the organization through the crisis. Since the pandemic hit, however, about a dozen CEOs of publicly traded companies have stepped down, though in some cases the timing relative to the virus outbreak were coincidental.

Joe Griesedieck, managing director of Korn Ferry’s Board and CEO Services practice, sees one benefit in the shift: it allows CEOs who are stuck at home to refocus on the big picture instead of the day-to-day operations that tend to bog them down. “CEOs are focusing their time on the well-being of their people and what challenges and opportunities there are for the enterprise to survive and prosper, which is what they should be doing, crisis or not,” says Griesedieck.

That said, pushing authority down is not without its risks. Tensions could arise, for instance, if deputies feel like they don’t have enough autonomy or that the CEO is constantly critiquing their decisions. Another potential obstacle is a lack of clarity around what decisions the CEO wants to be kept in the loop on and what ones don’t need consultation. The ultimate risk, however, is that the deputy doesn’t perform up to the task, which could result in job loss—both for them and the CEO.

“It should be clear that it is the authority that is being delegated, not the ultimate responsibility,” says Griesedieck. “That stays with the CEO.”