The Iconic CEOs: Can They Be Replaced?

History is filled with transcendent leaders of companies, governments, sports teams and organizations. Their tenures are marked by meaningful, positive, lasting success. Then they leave, and the next person steps in. And both the new leader—and many others—quickly wish they hadn’t.

The topic has been front and center since Warren Buffett, who has led Berkshire Hathaway for 60 years, announced that he’ll step down at the end of 2025. Though the transition has been planned for years, it still sent the company’s stock down 6% the day after it was announced. It’s being whispered about at other firms as well. Currently, ten CEOs of the nation’s 1,500 largest firms are over 80 years old. A few dozen large companies are led by CEOs with tenures of 20 years or more.

Any CEO departure is a shock to the system, one that’s only exacerbated when the CEO is replacing a founder or a longstanding iconic boss, says Alan Guarino, vice chairman of Korn Ferry’s Board and CEO Services practice. “You can’t expect the new CEO to come in, walk through the door, and expect business as usual,” he says.

Buffett is in a class by himself when it comes to success for investors—his performance would be nearly impossible for anyone to surpass. But successors often don’t come close to doing as well as the legends they replace. One study—of the period between 2004 and 2018—looked at shareholder returns of CEOs who had served in the role for at least 10 years compared to the leaders who succeeded them. Nearly half of the successors, or 49%, significantly underperformed their predecessors, while only 24% significantly outperformed. The successor CEOs often lasted for a far shorter time than the longstanding CEOs had—5.3 years versus 13.7 years, respectively—and the successors, when they left, were significantly more likely to have been forced out.

That’s partly because a company’s brand and an iconic CEO often become intertwined. “You try to build organizations around a system, not just one individual,” says Matt Bohn, a Korn Ferry senior client partner in the firm’s Technology practice. To get around that, some successors ignore the organization’s processes and impose their personal stamp on it, often with negative results. Having a strategic, planned succession—first to identify the new CEO, then to help them in their first year—can help reduce risks and accelerate positive results, Guarino says.

Still, before the new boss can figure out whether to significantly change the business strategy and culture created by the long-serving boss, they have to establish relations with the remaining executives, many of whom will wonder whether they have a future at the firm.

In fact, experts say that listening to executives and other employees is one of the best things a successor can do. Jonathan Wildman, senior client partner with Korn Ferry Advisory, suggests the new CEO follow a “listening plan” for their first three months. That not only can build relations and trust, but also can help identify what needs to change. “You’re basically creating a blueprint for what you want to continue,” Wildman says.

The iconic boss, assuming he or she left on good terms, should act as an advisor. “That can help alleviate concerns inside and outside the company,” says Reena Patel, principal in Korn Ferry’s Global Financial Officers and Healthcare Services practices.

Learn more about Korn Ferry’s Board and CEO Services capabilities.

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