Leadership

Time for an Untested CEO?

By / Jan 5, 2015 (iStock/Thinkstock)

“Leapfrog” CEOs are popular at companies eager to innovate. But creativity doesn’t have to wait till the next executive hire.

When it comes to CEOs, people who aren’t on the familiar path to become CEOs are all the rage.

That’s the conclusion of corporate consultant Roselinde Torres, who wrote about the trend late last month at the Harvard Business Review. More corporations—Google, Yahoo!, Burger King, General Motors, and Microsoft, to name just a few—have named CEOs who have spent relatively little time rising up the ladder. Instead of picking people with proven track records and a willingness to wait their turn, boards are shaking things up by installing relatively untested leaders.

Boards want CEOs who understand signals in today’s unpredictable environment and are comfortable acting on them.

Why? To an extent, Torres argues, boards have come to think that more chaotic times are a poor fit for steady-at-the-wheel leadership and traditional succession planning. Instead, she writes, they want “CEOs who understand signals in today’s unpredictable environment and are comfortable acting on them—abilities that directors hope will more than offset candidates’ relative inexperience.”

It’s too early to say whether the “leapfrog CEO” approach, as Torres calls it, is a successful strategy. Critics have some material to work with, though—Mary Barra’s tenure at GM thus far is shaky at best, and Microsoft’s Satya Nadella acquired a notable case of foot-in-mouth syndrome not long after taking the reins—ironically, for suggesting that women bite their tongues and wait their turn when it comes to promotions and better pay.

Even so, there may be something to the idea that a person with a fresh perspective about a company in particular—and leadership in general—can make improvements. But the problem isn’t with the leadership ladder. It’s with how we think about leadership ladders.

Consider how Torres describes the predicament in which a company opts for a relatively untested leader. In some cases, a long-tenured executive has  delayed retirement, and once that person is gone, “business conditions are even more complex and the environment is even more uncertain. Believing that the company needs a change of course and a new kind of leader—one with more relevant experience and a more future-oriented perspective—the board passes over senior executives, who have ‘aged out’ of consideration, and chooses a less seasoned leader.”

That’s not an issue relating to the experience of executives, though. It’s a groupthink problem, and that can occur regardless of the amount of experience an organization’s leader has.

The groupthink problem is twofold—it’s a function both of the leadership style of the executive and to the ways the entire organization cultivates future leaders. To the first point, we know that research suggests that leaders often unthinkingly keep their thumb on the scale when it comes to making decisions in groups, which can lead to bad decisions. To the second point, we know that many nonprofits tend not to focus on grooming future leaders, inevitably causing problems when leadership vacancies emerge.

Being more mindful of cultivating descent, along with creating more opportunities to cultivate leadership skills, are sensible day-to-day leadership activities. They can also help organizations from making a CEO decision that may sound like a “brave” and “innovative” move in the press release but in reality turns out to be a hail-mary pass. Indeed, Torres’ own recommendations for fast-tracking CEOs actually involves some slowing down—giving potential “leapfrog” candidates a big project as a proving ground, or making time to diversify the leadership opportunities for senior staffers.

I tend to think that association leaders are particularly well-positioned to avoid the problems that a leapfrog CEO is meant to resolve. Association executives are often inherently “outsiders,” experts in leadership but not necessarily products of the organization’s industry; and with smaller staffs than most corporations, the proverbial wearing of many hats forces everybody to stretch. As Donna Dunn told AssociationsNow.com last summer, “someone who isn’t actively involved may have an ability to see things that might not otherwise be seen by someone who has been raised in the industry.” The trick is to keep the leadership on your side while keeping that fresh perspective—and to encourage them to keep that fresh perspective as well.

What does your organization do to make sure all levels of leadership don’t lose sight of changes in your industry? Share your thoughts in the comments.

Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. More »

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