It’s always disruptive to a major company when, without warning, its CEO steps down. It’s doubly so if several senior executives have already left, either forced out or on their own accord. The company is then faced with a leadership vacuum at the very moment it needs strong leadership most.
A scenario like this made news recently at Intel, the multinational giant whose CEO, Brian Krzanich, resigned suddenly after five years at the helm. That was after several years’ worth of high-level management departures, raising concerns by analysts about leadership at the firm. Whether it’s Intel or any other company (there have been multiple similar instances over the last several years), the board has to assert itself, experts say. “The board must have a clear vision where the organization needs to go,” says Douglas Maxfield, a Korn Ferry senior client partner. “Then they need to work with leadership to identify people in the organization with the potential to take on larger, more complex roles and who have the traits, drivers and experiences to take the organization in that direction. Plans then need to be put in place to develop that talent internally or find it externally.”
Unfortunately, Maxfield says, many organizations don’t go beyond identifying emergency replacements or the next generation of leaders. In other words, firms don’t do a good job of going deep. To do that, the board should insist that the organization have a robust talent-review process, not just at the top of the organization but all the way through.
“Your company has potentially seven future CEO-caliber executives throughout the business,” Maxfield says. “The board and leadership team need to identify those with strong leadership potential early, so they can provide the experiences they will need to succeed at the very top of the organization.”
This means these future leaders should rotate through various roles that are critical to the success of the organization. Depending on the specific needs of the business, it might mean working in crisis management, launching a new product, turning around a subsidiary, or managing profit and loss. “No matter where these leaders come from—whether external or internal—they must convey the vision of the organization and be skillful at getting others to fall in line,” Maxfield says.
With enough preplanning, a company that’s experiencing a shock at the top can weather just about any storm.
“But they can’t do it last minute,” Maxfield says.