Large organisations develop a path to the top spot that identifies junior or middle-ranking executives and then trains them in what is involved in taking more and more responsibility. The executive moves roles every two years. The roles will broaden his knowledge of finance, marketing, engineering and will involve an overseas position if it is a multi-national company. Before he gets to the final stage he will lead a division before competing with the other princes and princesses for the top role.
This process can identify great executives but its objective of taking raw material and processing to make a freshly minted CEO often has the wrong outcome. Businesses change so much that the existing CEO would no longer be a viable candidate because whatever industry it is will have changed so much. Financial Services, Energy, Construction, Pharmaceutical and Agriculture have regular upheavals in terms of structures, competitors and technology that the experience of the CEO has a limited shelf-life.
This grooming of the new CEO means that they understand the existing business but once they are crowned the challenge is that they are committed and invested in the existing structures. The Management version of Hogwarts that they have been through will mean that they understand all the spells and potions of modern Management but they will have lost the rough edges and the unpredictability that they possessed at the start of the polishing process. The CEOs will look the same (well groomed, good diet and exercise) and they talk the same MBA language - synergy, deep dive, customer focus innovation and agile are a selection of the management karaoke that is played out.
There are many examples of CEOs who have been trained, groomed and failed. Even selection from a competitor does not guarantee success. The person usually selected is similar to the incumbent CEO but does not know of any pent up challenges that will affect his ability to make a success of the role. Poor David Moyes of Everton was given a hospital pass by Alex Ferguson with a decaying and ageing squad that needed renewal.
The challenge is how to progress the people you identify and let them keep their rough edge because these will be the competitive edge. Perhaps a part of their education is to take over a failing unit and turn it around or create a business unit from scratch and demonstrate success. Peer review will not be helpful, he should be reviewed by those above and below. Was he able to influence them, persuade them and motivate them?
The last thing that a large organisation will need is a 'safe pair of hands' as the CEO. That type of captaincy will not be able to see the choppy waters ahead and realise that the company needs refresh and change.
