Potential Pitfalls: Role of Outgoing CEO in Hiring Replacement

In my last post, I started a series on the most important job for a nonprofit board: hiring an Executive Director or CEO. I shared a story about a rigorous search process that resulted in a great CEO for the organization. Several years later, board members were still happy with their choice and the individual I interviewed outlined what was done well – and some changes that could be made in the future.

In this second part of the series, I recount three stories – from one individual – which examine if and how an outgoing CEO should be involved in the search for their replacement.  

Three Stories: How NOT to Include the Outgoing CEO

By a Dedicated Board Member, Somewhere in the USA

Pub 8 a drawing
Ways an outgoing CEO can participate in the search for a new CEO.

As a board member, I have been part of searches and hiring for many CEO-level people. One of the questions and potential pitfalls is how you involve the outgoing CEO. I can think of three cases – all different – where I don’t think the outgoing CEO was included in the right way.

At one end is the CEO who says “I don’t want anything to do with it.” In the second situation, the CEO is officially only tangentially involved but really cannot stay out of it and begins to manipulate and nip around the edges – and advertently or inadvertently — undermines the candidates, especially the finalist. The third example is one in which the outgoing CEO was very involved in the search process.

Uninvolved CEO Means Missing Insights into New Hire

In the first case, the CEO had a strong personal feeling that the outgoing CEO should have no involvement and provide no information. That was an extreme. We could have used some quiet reflection and inside information from him. The replacement CEO had some serious deficiencies that showed up later. He failed and had to be replaced after two years – in what was expected to be an eight- to ten-year run.

If the original CEO had been more open, we may have picked up on some of those deficiencies. The hiring was done out of a community with which the original CEO was very familiar. Furthermore, he probably could have helped identify a stronger candidate pool by being more involved. I understood his principles in wanting to back off, but I think it was not helpful in the situation that we were in.

Interfering CEO Undermines the New Hire

In the second case, the outgoing CEO was supposed to have limited participation, but, in fact, was pulling strings and doing things in the background to promote his own candidate and undermine others. This outgoing CEO had been really strong. He had developed the organization in fantastic ways. I think he wanted to protect his legacy and had mentored someone into a position to take over. Essentially, he had a hand-picked successor in mind and had made promises to this individual. When his candidate did not even make it into the finals, he could not get over it.

The outgoing CEO had voluntarily resigned and understood the process. But he could not keep his hands off of it. He ended up being a negative force. He set up resistance to and disrespect for the new CEO.  It was difficult for the new CEO to take charge and be a leader and be admired. I don’t know what the co-chairs of the search committee could have done differently because the former CEO was simply behaving badly.

Totally Involved CEO Has too Much Influence

The third example was one in which the outgoing CEO was directly involved, served on the search committee, had a vote in the decision, and participated in vetting the candidates. In that case, the search committee deferred to the former CEO more than we should have. We stopped talking because he felt strongly about one candidate. Two of the committee members made the decision early on that they were just going to defer to the outgoing CEO. So, once he made the decision, they fell into line and there were just two of us who felt differently. Our view was backed up by the staff view but we did not listen to them.

I don’t know whether the alternative candidates would have been any better, but the candidate did not work out. He was let go after a year or so.

Lessons Learned: Use the Outgoing CEO But Don’t Have Them on the Search Committee

Generally speaking, I don’t think the outgoing CEO should serve on the search committee. Instead, the committee should consult with the CEO about what the organization will need going forward, what the challenges are, and what kind of person could best take on those challenges. A mature CEO can have good insights into the qualifications needed as no one knows an organization better than the CEO at the end of their term. Taking advantage of that and at the same time not putting them in the middle of the process is a tricky but necessary balance. An advantage to this method, is that the outgoing CEO becomes a resource to the candidates. The candidates can talk to them openly, can ask them questions without feeling like they are jeopardizing their candidacy. The outgoing CEO can also help in integrating and orienting them. Usually outgoing CEOs need to disappear. Incoming CEOs don’t want them around confusing things. But they can provide all kinds of great advice and mentoring in the initial stages as the new person gets to know the organization.

I also think if you do the work ahead of time to develop clear and prioritized criteria — experience, qualities, and credentials, you can keep it analytical and the process does not become personal or politicized. This needs to be done before you meet any real people. Then if a CEO pushes a candidate, you can say “This person does not meet our criteria.”

When you get down to the final person, someone on the committee needs to be doing some of the vetting. If you only use references given by the person, it is hard to get the real story. It is always good to talk to someone who was the boss of the person and someone who reported to that person to see how they manage up and down. In the third situation, we might have identified the issues with better vetting – even though the outgoing CEO was pushing for the candidate.

And trust your gut. If something feels wrong, it probably is wrong. At least that has always been my experience. If something did not feel quite right, once I started poking at it, usually there was something to it. In the case where the vote was 3 to 2, we should have kept talking especially since the staff agreed with the two dissenting votes.

 

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