Chief executives always find themselves in a difficult situation when thinking of their own successors. This is understandable since successful CEOs do extremely well in terms of business performance or task orientation. Most also have a strong people orientation, which means they usually listen to and inspire their team members.
In reality, though, we cannot expect to find a replacement for a capable executive by considering only his or her business performance. We need to look into their personalities to learn more about their true selves to predict who will be the right people for the top job.
One of my clients, a listed manufacturer, is currently facing a succession issue. The current CEO, who has held the position for many years, recently raised this concern with me. Earlier I had conducted a leadership study and assessment for the company of 20 top executives including the CEO himself. These 20 people form a unique profile that contributed to their success over the years, as I will explain.
As normal practice for analysis, I base my approach on the Five Factor Model or so-called Big 5 personality traits which are Agreeableness, Conscientiousness, Emotional Stability, Extraversion, and Openness to Experience. Under each item in the Big 5, there are 21 facets in total that can be presented as follows:
- Agreeableness consists of Cooperation, Concern for Others, and Diplomacy.
- Conscientiousness can be broken down to Achievement, Initiative, Persistence, Attention to Detail, Dependability and Rule Following.
- Emotional Stability comprises Self-Control, Stress Tolerance, Self-confidence and Emotional Self-Awareness.
- Extraversion comprises Sociability, Leadership, Influence and Energy.
- Openness to Experience comes from Adaptability, Innovation, Analytical Thinking and Independence
The group profile of the 20 top executives, analysed based on all 21 personality traits, reveals some unique characteristics:
- As a group, they always aim for high business performance since they are high on the achievement score, which means they enjoy challenging goals and competing against standards of excellence.
- Creativity is medium-high, together with their tendency to volunteer for work and not to back off easily when facing obstacles. As such, they encourage the whole company to move forward with outside-the-box thinking and an intention to do the work by themselves.
- These executives prefer working in a fast-paced environment which helps support high business performance but also discourages them if things become slow.
- Working independently is considered their strength. However, at times they may face problems with teamwork since they have relatively low degrees of cooperation, diplomacy and self-control. They typically express themselves straightforwardly, even bluntly, which can have consequences for relationships.
- They are generally outstanding in terms of persuading customers and team members while inspiring team members as well. This combination allows these top-20 executives to acquire customers and generate high sales turnover.
- Following the rules is not their strong point. For a manufacturer, this can be considered a weak point since, in a production environment, complying with the process is important in order to ensure safety and on-time delivery.
- As a group, they are not quick adapters, so a company change management programme could cause problems for them. They have a tendency to resist change and are not inclined to analyse the pros and cons of alternatives and identify options. They may be inclined to prefer things to be "black and white", where policy just needs to be implemented.
- Generally speaking, they are lower than average in terms of emotional stability. In pressure situations they may worry too much, which can result in some unpleasant behaviour as they strive to get the job done.
- At times, some of these executives may slip in their commitment and cannot deliver work on time. For a manufacturer, this is not a good sign since deadlines are critical in a production environment.
The tale of two candidates: The CEO has told me that even though he heads a listed public company, it is a family-founded business, and he and most board directors believe an internal candidate should be the next CEO. An external candidate is not an option.
Currently, there are two candidates, both from the top-20 group I have just described. I can't name them, so I let's just call them Khun Metha and Khun Suwan. Both men have worked for the company for many years. Suwan reports directly to the CEO while Metha is a direct report to Suwan.
Since both are family members of this well established and recognised listed firm, they have delivered exceptional business performance over the years. Initially, it was expected that Suwan would take the helm first and Metha may follow, depending on his future performance.
However, during the last couple of years Suwan has started to show signs of slowing down because he wants to create a better work-life balance. He's also been speaking his mind quite often, to the point where the CEO is questioning the original succession plan on which he and most of the board members had seemed to agree.
This is where I get involved in the difficult situation the current CEO is facing. In the next column in two weeks I will take a closer look at the candidates and possible outcomes.
Sorayuth Vathanavisuth is a former chief executive of the Thailand Management Association (TMA). His areas of interest are leadership development, talent management and executive coaching. He can be reached at sorayuth@sealeadership.com