Picture this: It’s a sunny Monday morning, and your CEO walks into the conference room. She’s gathered not only you, but the whole top team. After some chitchats about the weekend, Jane asks for silence and finally breaks the news: she’s leaving the company. This announcement sends shockwaves through the room. As the initial surprise settles, however, the reality starts to sink in: this departure, whether sudden or planned, is a pivotal moment for the entire organisation.
Yes, CEO transitions can be particularly daunting and detrimental to the health of your organisation. But, they are also opportunities for renewal and growth if done right!
This guide aims to help the top team navigate this challenging period with confidence and clarity by providing you with tips and tricks every step of the way.
Process the situation
The first step is to understand and align as to why your CEO is leaving. The reasons can vary immensely, from personal reasons – such as a desire for change or retirement – to professional reasons, like strategic disagreements about the best course of action. Whatever the reason, it’s crucial to have open and honest communication about it. Or you’ll risk missing out on learning from this monumental learning opportunity and effectively acting on it.
Once this is cleared up, assess the timeline of leaving. Ensure you always have a temporary replacement plan ready in case your CEO leaves abruptly – let’s say within the next two months. This will prevent you from losing speed and direction, and instead, provide you with clarity and certainty.
A temporary replacement within the top team can be a good quick fix, as the person knows the company inside-out – including its strategies and dynamics. In this case, and in order to avoid top team conflict, you might be tempted to rotate positions among the top team or slice the CEO’s responsibilities thin to distribute them – all until a sustainable solution is found. This, however, is far from the ideal solution as it will create only more instability and chaos.
Next up on your agenda is evaluating the internal and external landscape to determine the best path forward. This step requires everyone to agree on how urgent the situation is and how to handle it.
Now it’s time for you and your top team to not only face a difficult truth but also to take a brave step forward. Selecting a new CEO is one of the most critical decisions an organisation can make. It involves a careful balance between finding the right skills and ensuring a cultural fit.
The choice will be between internal and external candidates at first. Here’s a quick rundown of their pros and cons:
| Internal candidates | External candidates |
|
Pros: Familiarity with the company culture, a shorter learning curve, and the potential for continuity in leadership. |
Pros: New ideas, different experiences, and the potential for significant change. |
| Cons: Path dependency and conflict with the top team if not managed well. |
Cons: Longer onboarding time, potential cultural and business misalignment, and higher recruitment costs. |
In the end, the choice is yours to make – based on the context of your CEO’s leaving and the organisational culture, amongst others.
Meanwhile, make sure to keep in mind to:
If you promote an internal candidate, it’s essential to clearly communicate the reasons behind their selection over the others. This will help manage any feelings of disappointment among team members. If you decide to hire from outside the company, then you’ll need to address the elephant in the room: Can top team members aspire to become the CEO at any point at all? Once they understand the reasons behind your decision, they will be able to accept it faster and decide what to do next.
“Use every channel available! Video calls, written communications, town halls, you name it - all to get the message out. But always ensure it is clear, consistent, and resonates with everyone.”
So, you’ve found the new CEO. Congratulations! Now it’s time to spread the word. In the best-case scenario, the outgoing CEO communicates his or her departure and introduces the new CEO to the entire organisation. Meanwhile, the top team and the board should explicitly signal or even voice their support.
Use every channel available! Video calls, written communications, town halls, you name it – all to get the message out. But always ensure it’s clear, consistent, and resonates with everyone.
After all, effective communication is the backbone of a successful transition: in this case, it’s always better to overdo it than risk the chance to underdo it!
Cascade the message
The information you have on this big news needs to cascade down through every layer of the company. This is where your directors and managers come in to play a crucial role: They are the ones who will need to communicate about the change with their team members.
Imagine you’re a product developer – you’d want to hear about this big change from your direct supervisor, the person you confide in and interact with daily – not just the CEO!
This approach helps build engagement, trust, and transparency, fostering feelings of safety and preventing a circus of anxiety, restlessness, and a sudden rise in leave requests.
Prepare the new CEO for a great headstart
While all of this is happening, make sure you (the top team) also prepare the new CEO, preferably in collaboration with the outgoing CEO:
This phase is all about clear and purposeful onboarding, building trust, and making sure the new CEO feels supported and ready to lead. The backbone of all of this? Alignment, alignment, alignment!
“Try your best to minimize disruption and keep the whole thing moving forward smoothly.”
Did someone say alignment?
Yes, there the word is again. And here’s why: Alignment is the key to avoiding losing an entire year.
This entire process (CEO out, CEO in), with all its phases, revolves around maintaining momentum and direction. Underlying it all, is alignment: The more aligned the organisation, the less time and direction you lose.
Think of it like a well-oiled train, where you try your best to minimize disruption and keep the whole thing moving forward smoothly. The more the train has to slow down, or even deviate from its course, the more time it will take to reach the desired destination. In the same way, misalignment during organisational transformations causes chaos and disruption – leading to problems and delays which could’ve been avoided.
At LQ, our team of experts knows how to avoid the latter and keep your organisation running smoothly – even in the midst of a CEO transition. We work side-by-side with our clients to help you with creating and sustaining (!) alignment by analyzing the health of your organisation’s culture, creating team cohesion and aligned strategic goals, and overseeing the entire leadership transition.