We have all heard the adage ‘always be looking for your successor’, and one job of a company's board, is to have a plan in place, when and if a CEO moves on. However, there are still unforeseen reasons why this could happen, just like with all things, and an estimated 43 percent of large cap company CEO successions are unplanned.
No matter, a transition like this is a vulnerable time for the company: uncertainty for employees, a sense of loss of leadership and direction, skepticism among customers, senior execs potentially turning their attention away from normal responsibilities whilst vying for "the top job", and in terms of the company’s valuation, it’s reported that investors are two times more likely to sell shares then buy them during this time.*
Communication is vitally important throughout the transition. Here are three things to keep in mind:
1. Over communicate in this period – to your employees, to your customers, to your shareholders.
Even when there is no news, it’s better to say 'there is no news', than to say nothing. This is especially important in this situation. Whether the immediate plan is for an interim CEO to takeover, for the incumbent to continue on, or something else, the Board should be clear about the strategy and the plans until a successor is announced. Town halls with Q&A at the onset are helpful, and consistency and continuity around the ways you communicate with stakeholders is key during this time. The Communications and People teams should keep their ears to the ground on concerns and issues and flag them appropriately in the time of transition or surface them when the new leader is on board.
2. Create the best on-boarding plan.
The new leader needs information:
The current strategy - vision, values and goals
The key people
A sense of the culture
The ‘norms’ of communicating in and for the current structure
State of business performance and any KPI's
And of course, a well rounded schedule including employee town halls, time for PR/media/investor announcements, and other key internal and external meetings. Give the new CEO plenty of opportunity to meet with the right people, ask questions, and find out what’s working well and what could be better.
3. Prepare comms.
As soon as possible, the Chairman, Head of Comms, Head of People/HR and new CEO should work on the key communication points for the announcement.
Reports indicate CEO's spend over 40% of their time on internal comms and when he/she joins, this will be much higher. The most important communication tip to remember: to listen.
It also never hurts to brush up on a bit of media training – particularly if the new CEO is entering a new industry with different channels than he/she is used to. No matter if the company is public or private, there will be a host of external comms events when the successor is publicly announced. There is also a checklist of tactical items to prepare including: photos, bio, pitch list, changeover documents, etc. Depending on the business, there may also be specific customer or partner communications which would be useful to prep.
Anticipating the questions he/she will get, and coaching on how to answer these is also helpful. Reminding him/her: it's more than ok to say you don’t know yet. In fact, it's usually more respected. Be open and honest.
Change can be stressful, but effective communication can help bridge the gap for a new leader and the company's stakeholders to ensure a successful transition.
*FTI Consulting Study
Ashley Walker is Founder & CEO at Culture Engineers, and has managed communications and change through several CEO transitions.