If a CEO is diagnosed with COVID-19, a board must be prepared to manage the unique consequences. Many boards have some kind of emergency CEO succession plan in place. But the current crisis sharpens the need to be sure that plan is updated and can be executed swiftly; it also raises some unique considerations for both boards and incoming CEOs.
Until now, boards have generally focused on planned CEO successions in the nearer or longer terms but the possibility of having to invoke this choice has remained somewhat remote for most boards. Until now. In the COVID-19 crisis, the possibility is urgent: prudent boards need to have one or more emergency CEO succession candidates who could step in immediately and lead the company through an unprecedented crisis.
We offer several considerations that will help boards ensure they have the best-equipped emergency CEO successor, should the need arise:
- Revisit your emergency CEO succession choice. Does the board currently have a designated candidate, and if so, is that person still the board’s choice?
- Understand the must-haves. Beyond the bare minimum, such as availability for several months, this is a situation in which familiarity with the organization and the board is crucial.
- Match the leader with the current challenge. Not every CEO excels at leading in a crisis. In a situation such as the current one, strategic wisdom and operating excellence, customary top-of-the-list CEO capabilities, need to be balanced with an even larger proportion of essential personal skills.
- Tailor communications to inform and reassure. Boards should take the lead in being ready to share information quickly, according to a clearly defined communication plan and with an understanding that precedents may not apply.
- Since there are legal implications regarding compliance and disclosure, we advise boards to include in their considerations consultation with their legal adviser on how to proceed under specific potential scenarios for emergency CEO replacement.
Considerations for incoming CEOs
Being considered a potential interim CEO by a board is usually a sign that someone is seen as experienced, knowledgeable, and a safe pair of hands. During the current pandemic, an interim CEO named to replace a leader unavailable due to illness is in a particularly fraught position. We offer some considerations that will help emergency CEOs inform and reassure different stakeholders:
Upon taking the helm.
Some new CEOs may be well known within the organization but it’s also possible the new CEO will be an outsider. A crucial first step is learning: consult with the board to determine strategic priorities, key issues, and a complete financial picture.
Settling into the role
There are several steps that emergency CEO appointees should take to sustain, as much as possible, cultural equilibrium and business continuity:
- Take time to look inward. Assess the personal strengths and weaknesses in the context of the new role, as well as the leadership style that will be most effective. Identifying and leveraging distinctive strengths he or she can bring to bear right now, as well as potential personal derailers and blind spots.
- Understand how decisions are really made in the organization. Gain a speedy understanding by having one-on-ones of who influences key decisions and where the power to accelerate or block decisions resides.
- Establish priorities based on what success will look like. Develop a more detailed understanding of what is expected in the immediate and longer term and, relative to that, what to tackle and in what order, even in the context of a situation that changes daily.
- Mobilize the top team quickly. A high-performing senior team is one of the most important assets to a new CEO. Develop a baseline understanding of the team’s individual and collective skills against the organization’s mission and strategic goals.
- Shape a supportive culture. The crisis is already upending working norms at most companies. Those with strong cultures are more resilient, and a new CEO can tap into cultural strengths to connect.
Boards and leadership teams are now preparing—and working—in ways that only a few months ago would have been unimaginable. We hope that these considerations for boards and incoming emergency CEOs offer useful support.
Lee Hanson, vice chairman, Heidrick & Struggles San Francisco and New York, Member of CEO & Board Practice.
John S. Wood, vice chairman, Heidrick & Struggles New York, Member of CEO & Board Practice.
Text edited for Boardview Magazine by Partners Merja Eskola and Tuomo Salonen from Heidrick & Struggles Helsinki.
The full version of this article will be published in Boardview magazine’s issue 1/2020 in June.