Tuesday, March 13, 2007

Clues from Strategic Planning: Identifying a successor to the CEO

The strategic planning process is a great place to learn about the members of the management team. After a couple of sessions with a team, I can generally tell who is likely to do a good job on implementation, who understands your strategy, and who is going to have the best information about certain strategic issues. All of these are important traits in a CEO, but anyone who says "A CEO must have trait A, trait B and trait C" probably doesn't understand how much the existing management team can affect the leadership needs of different companies.

Here's a thought process you may find useful: every management team needs good implementers, good strategic thinkers (planners), and good idea people (creatives). While every manager has some of each of these skill sets, the best at each of the three will likely have less of the other two. This is because the mindset of, say, a good implementer, is about doing, while the mindset of a good planner is about thinking ahead. Neither is necessarily better than the other (although some are better for certain functions in your organization). Strategically, these three management approaches need to be present, in strength, in your top management team.

When thinking about who will succeed your current CEO, you want to watch your team for evidence of one of these three strength areas:

Implementers will be very effective working on action plans, and will generally have all their homework done, well and on-time. Action plans written by Implementer types will have lots of steps, most of which are specific, concrete actions.

Planners will likewise be very prepared for your meetings, but are likely to analyze more. An action plan written by a Planner type will have many more preparation and analysis steps.

Creatives will bring a lot of clever ideas to the table - but many of them will be impractical. Creative types tend to turn in homework that is incomplete but peppered with brilliant insights, and their action plans often contain just a few really critical steps.

I won't tell you that one of these makes a better CEO than others - because different companies, at different life stages, can benefit greatly from each of these. What I will tell you is that it will pay to be aware of these three styles and strengths in your own management team, especially when you are doing your strategic planning. An effective CEO always brings one or more of these skill sets to the company, and being aware of how that mixes with the rest of the management team can help you in your selection process.

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