Planning for success: checklist for a CEO transition

Planning for success: checklist for a CEO transition

Planning for success: checklist for a CEO transition



13 Feb 2023

13 Feb 2023

CEO transitions can be daunting for any organisation because there is a lot riding on success. A smooth process protects your brand and competitive edge—while getting it wrong can damage your reputation and business.

CEO transitions can be daunting for any organisation because there is a lot riding on success. A smooth process protects your brand and competitive edge—while getting it wrong can damage your reputation and business.

When managing and planning for transition, keeping both the outgoing and the incoming CEO aligned with the board is critical. BoardClic’s CEO evaluation promotes full transparency, identifies strengths that underpin value and highlights your executive’s capacity to strategise and lead. An objective evaluation is a powerful tool when managing transition. To try BoardClic’s CEO evaluation, request a free demo today.

This article covers how to plan for a transition and includes a checklist to help you find the right candidate and keep momentum in your business during the change.


Why plan for executive transition?

Because getting it right is difficult. McKinsey and the Center for Creative Leadership found that 40% of new CEOs fail in their first 18 months. And DDI Global Leadership Forecast found that just under half of executive transitions flop. The good news is that you can boost chances of success by up to 25% by promoting talent internally with a robust transition plan.


A CEO transition plan helps you:

  • Identify suitable candidates to replace the current CEO

  • Establish processes to prepare an incoming CEO to take over


The transition checklist

☑️ Engage the CEO AND the board

Where once the CEO usually controlled succession planning, often now the responsibility is shared with the board. CEOs need to look for leadership skills and interest in strategic direction among staff members, because they “are responsible for refining their executive team and ensuring its sustainability,” according to Tony Kirschner, a partner at executive search firm Leaders International. Having said that, the board also needs to be active, particularly if the current CEO is uncooperative.


☑️ Adopt a leadership development mindset

If your organisation does not have a tradition of succession planning, CEO transitions can be a delicate matter. Board members may be concerned that by broaching the subject, they appear to be undermining an incumbent. Similarly, a CEO that refuses to accept they will ever need replacing can prevent effective transition planning.

However, the simple fact is that every CEO will move on at some point, and companies with a solid plan are the ones best placed to successfully transition leaders.

If the board focuses on spotting and preparing next-generation leaders, finding that perfect candidate will be much easier. Plus the new CEO will be well-acquainted with the processes and relationships they need to be successful.


☑️ Make a contingency plan

A transition plan works best when a CEO retires, decides to leave of their own accord with standard notice, or reaches the end of fixed tenure. We all know that is not always the case. If a CEO is removed, has to leave immediately, takes ill or dies, you will not have time to complete the usual transition plan.

This is why it is important to include continuous development for potential leaders in your strategy. You should also have a contingency plan where a trusted senior board member or external executive steps in as interim CEO while you search for a permanent replacement.


☑️ Set your goals and timetable

To keep all stakeholders on the same page, you should set goals for the new CEO. This helps fine-tune the transition plan to meet the requirements of your specific business.

Set timelines for introducing the new CEO to new concepts, targets and ideas. What do they need to work on in the first days, weeks and months of their transition? This creates a roadmap to follow to ensure all aspects are covered. It might look something like this:

  • First week: Start to develop relationships with the board and set expectations.

  • First 30 days: Introduce company culture and practices. Consider how to get early wins.

  • First 60 days: Work on developing the new CEO’s vision and align it with the organisation.

  • First 90 days: Refine vision as it relates to communicating with stakeholders.

  • First 6 months: Communicate vision, set development goals.

According to the Harvard Business Review, many transitions fail because boards set one-dimensional or generic expectations of the new leader that only emphasise financial and operational goals and not specific cultural, political, and personal ones.


☑️ Update your strategic plan

If you choose a candidate whose vision differs from your current strategic plan, you should update and align your plan. If you select a new CEO with a different view of the company’s future, chances are this was one of the main reasons they were offered the job.

Alternatively, the incoming CEO’s vision may already align with the company’s. In any event, take this opportunity to ensure that all parties are in sync when it comes to where your organisation needs to go. Given changes in technology, demographics and market forces, it makes sense to reassess your strategic plan from time to time anyway.


☑️ Create a transition task force

A transition task force can help prepare the ground for the new CEO. The team should manage everything from crafting the job description to keeping key stakeholders in the loop.

With major changes like a new CEO can create unrest, often caused by leaks and rumours. The task force should keep stakeholders informed of what is happening and why it is happening to mitigate potential concerns.

If you have a solid transition plan, the task force can begin building excitement for the upcoming leadership change. The outgoing CEO will have built strong relationships, and these contacts need assurance that someone capable will fill these shoes.


☑️ Draft an exit announcement

A CEO resignation letter can also aid a transition by mitigating worries from internal and external stakeholders. An endorsement from a well-respected predecessor helps encourage acceptance. The exit announcement should show a continuation, rather than the end of one era and a break before a new one begins. Stakeholders want to hear that the two leaders have worked together to make the transition as smooth as possible.


CEO transition checklist template example

Here are a couple of more detailed transition checklists:

Try our demo
Experience our platform in action with a demo version of BoardClic Board Evaluation