{"id":7231,"date":"2025-08-27T16:42:16","date_gmt":"2025-08-27T16:42:16","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=7231"},"modified":"2025-08-27T20:42:35","modified_gmt":"2025-08-27T20:42:35","slug":"the-ways-ceo-succession-planning-goes-off-the-rails","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/the-ways-ceo-succession-planning-goes-off-the-rails\/","title":{"rendered":"The Ways CEO Succession-Planning Goes off the Rails"},"content":{"rendered":"

By Daniel Butcher<\/a><\/p>\n

When a president or CEO is planning a move for any reason, the processes around succession planning and leadership transition can get dicey.<\/p>\n

Academy of Management Scholar Donald Hambrick<\/a> of Pennsylvania State University, who published an article in Academy of Management Review<\/em><\/a> on this topic, said various things can go wrong between the time that a CEO considers retirement and before and after actually hiring his or her successor.<\/p>\n

\u201cOne of them that doesn\u2019t get talked about very much is where there\u2019s nobody in the second level of executives who, by virtue of disposition or motivation, really has what it takes to be a CEO,\u201d Hambrick said. \u201cYou would like to think that you\u2019d pick the next person from that set, but sometimes there\u2019s nobody in that set who\u2019s equipped to do it.<\/p>\n

\u201cYou don\u2019t necessarily want to replace them just because they don\u2019t look like they\u2019re CEO material, because they\u2019re often tremendous executives at what they do,\u201d he said.<\/p>\n

Intel found itself in exactly that situation. After the company\u2019s board of directors announced CEO Pat Gelsinger\u2019s retirement and revealed that he was stepping down from the board, it didn\u2019t name a successor. Rather, it appointed two executives as interim co-CEOs to replace Gelsinger, who had spent his entire career at Intel lifer, but was CEO for only three years.<\/p>\n

\u201cIntel is still without a real CEO after [several] months, and a lot of it is because in their cast of characters at the second level, they had a bunch of great executives doing their thing, but nobody who was CEO stuff,\u201d Hambrick said. \u201cAnd so they\u2019re trying to figure out what to do about that.<\/p>\n

\u201cI assume that they will eventually have to go to the external market and recruit an outsider, which, by the way, is not necessarily the end of the world,\u201d he said. \u201cOutsiders have a bad rap. They are high-risk, high-reward. They can be tremendous. They can be problematic.<\/p>\n

\u201cBut I\u2019ve done research on the performance of outsider CEOs, and they aren\u2019t uniformly a bad story at all.\u201d<\/p>\n

***<\/p>\n

A sample of Hambrick\u2019s AOM research findings:<\/em><\/p>\n