Hiring a CEO vs Promoting a CEO
There have been many quality posts around the Internet talking about what is better alternate for a Company to make progress during organization's life-cycle. Selection of CEO is the crucial process to make sure company's progress and direction are on the right track.
I believe it's up to the board of Company to decide based on hundreds of complex criteria whether to promote a CEO from internal staff or to hire a new one.
I am not in the management branch but have been experiencing some of such situations closely these days and I believe there are pros and cons in both the cases and which I can sum up in following points. These thoughts are completely based on my experience and could be wrong in certain criteria.
Pros of Promoting a CEO from inside:
- A positive wave in the next line of managers that hard-work will pay off and they can get a promotion if they can prove themselves.
- He/She would know the existing processes and flows in them and would be easily able to identify the weak-links easily and can cure with their expertise. Existing domain, business and organization culture knowledge would help internal CEO.
- Will increase the confidence in the every level of employee and make them believe that everyone will have equal chance of getting promoted to next level if they can perform.
- Would be able jell up easily with existing team and would be able to guide them in showing them new path or direction.
Cons of Promoting a CEO from inside:
- Sometimes if he/she is not able to bring up the new ideas it could washout the bringing in new person.
- Acceptance of new CEO from within would be a question when he/she has been picked up from the 2nd line of management.
- Must be able to see the processes as outsider to be able to evaluate the organization in a correct manner. This could not be counted as a one of cons but still if this is missing it could be a big hit.
Though selection of the person who can be the Chief Executive Office is really an important and crucial decision to be made by board.
Pros of Hiring a CEO from outside:
- Would be able to bring new ideas based on their experiences from different work culture where they have been working.
- Will be able to see things as an outsider easily and so will be able to provide corrective actions whenever required.
- Could bring a positive energy into existing workforce when they were not able to see any light of hope with existing process or management. Would be able to bring in best practices from the other organizations he/she might have worked with and very much helpful if he is having past experience in similar domain.
Cons of Hiring a CEO from outside:
- Would be difficult to reach till the roots of processes and knowing that what to find from where and from whom.
In any case be it outsider or insider, new CEO would be under great pressure to bring organization to the next level as that would what board members might have expected and that's why the change might have occurred.
There is no universally accepted answer to this question and it depends and changes from case to case. There could be lot of debates and dilemma on the question and here are some more articles discussing about similar topic:
Please feel free to put your thoughts via comments for this post.