Why your next CEO should not be as good as the last
There is a moment in many CEO appointments when a founder describes the person they are looking for and, almost without realising it, starts describing themselves, or their last CEO.
They want someone commercial, entrepreneurial, loyal, decisive and able to get things done. Someone who understands the family. Someone who will protect what has been built but still grow it. Someone who can command respect without creating unnecessary disruption.
None of this sounds unreasonable. In fact, it sounds like a very good brief.
The difficulty is that the business may no longer need the same things it needed when the founder, or the last CEO, was running it.
I have seen this repeatedly in founder-led and family businesses. A company reaches a point where the outgoing CEO has done an exceptional job, but the circumstances surrounding the business have changed. The instinct is often to find another version of the person who made it successful.
That can be precisely the wrong appointment.
When the business has moved on
The founder who built a £30 million business may have needed instinct, speed and an extraordinary tolerance for uncertainty. They may have known every important customer personally, made decisions over breakfast and solved problems by walking onto the factory floor.
As the business becomes larger, more complex and more professionally managed, the demands placed on its leader can become quite different.
There may be more people to lead, more shareholders to manage, more sophisticated financial reporting, greater regulatory expectations and a board that expects proper debate rather than decisions made by instinct. The family may also have become more involved, with different generations holding different views about what the company should become.
The next CEO therefore inherits the consequences of the founder’s success as much as the business itself.
This is where appointments can become surprisingly difficult.
A family may say it wants someone who will challenge the business, professionalise it and take it forward, while simultaneously searching for somebody who feels reassuringly familiar. They want change, but not too much change. Independence, but with loyalty. Fresh thinking, but without questioning too much of what has gone before.
The next CEO inherits the consequences of the founder’s success as much as the business itself.
There is nothing unusual about this tension. It is deeply human. When a founder has spent decades building something, the characteristics that made that person successful become intertwined with the identity of the business.
But success in one period does not necessarily provide the answer for the next.
The uncomfortable appointment
The strongest conversations about succession are often the ones where somebody eventually asks whether the next CEO actually needs to be different.
Not different for the sake of being different, and certainly not different simply because the previous leader has been there for a long time. Different because the business is now asking different questions.
Perhaps it needs someone who is less instinctive and more deliberate. Perhaps someone who can build a stronger senior team rather than remain the person everyone turns to. Perhaps someone who is comfortable with shareholders but not dependent upon their approval. Perhaps the business needs a CEO who can establish greater discipline around decision-making, investment or accountability.
Sometimes the required difference is even more fundamental. The outgoing leader may have been a brilliant operator, while the next stage requires somebody who can think more broadly about capital, succession, markets and the future ownership of the business.
That can be uncomfortable for a family.
There can be a tendency to judge the new candidate against the old CEO, even when the old CEO is no longer the right benchmark. The question becomes, “Would this person be as good as Dad?” when perhaps the more useful question is, “What does the business need from its leader now?”
That is a very different conversation.
The right successor is not necessarily the person who can recreate what came before, but the person who can make sense of what comes next.
None of this diminishes what the founder has achieved. Quite the opposite. Sometimes the greatest acknowledgement of a founder or CEO’s achievement is recognising that the business they created has become something different from the business they originally built.
That is particularly important in founder-led or family-owned businesses because succession is rarely just an executive appointment. The incoming CEO is stepping into a history, a set of relationships and a collection of expectations that may never appear in a job description.
They are also stepping into a business where the previous leader’s personality may still be present long after their formal authority has gone.
The challenge is finding someone capable of respecting that history without becoming trapped by it.
This is why CEO succession deserves more thought than simply asking who has the strongest CV or who looks most like the person leaving. The best appointment may initially feel slightly unfamiliar. They may bring characteristics that the business has not previously needed. They may ask different questions, see different risks and have a different way of making decisions.
That can feel uncomfortable at first.
It can also be exactly what the business needs.
The question is not whether the next CEO is different from the last one. It is whether they are different in the ways that matter for the next chapter of the business.
That is often where the real succession conversation begins.
About the author
David Twiddle is Managing Partner and Founder of TWYD. His work involves spending time with founders, family business owners and leadership teams as they consider the people and decisions that will shape the next stage of their businesses.
Much of his work sits around moments of transition, particularly when a business has outgrown the leadership approach that served it well in the past. He brings an experienced, independent perspective to the conversations that families and founders sometimes find hardest to have.