New CEOs – will you be let go?

by HCA15 Jul 2013

HR professionals are most likely to get the boot when a new CEO takes the chair, according to new research from RHR International, Harvard Business Review (HBR) has reported.

When a CEO from outside the organisation comes into power, 26% of their team is likely to be made up of new external hires, compared to an internal CEO’s 10%.

However, both keep a balance in terms of team members they have remaining, and those who they transition from elsewhere in the organisation – outsider CEOs will have 37% for both areas, and insider CEOs 45%.

While outsider CEOs are more likely to let go of HR professionals, CTOs, CIOs and others in tech-based departments, insider CEOs were found to lay-off CMOs, brand officers, unit leaders, legal officers, sales and strategists.

Although the figures suggest overhauls of senior teams to be commonplace when a new CEO takes charge, many CEOs have stated they wished they’d put the changes in place sooner.

“When they look back, and you ask them what you would have done differently, they almost always say, ‘I knew in my gut that was not going to work with that individual, and I wish I had trusted that’," Dr David Astorino, global practice leader for senior team effectiveness at RHR International, told HBR.

“By delaying the transformation of a particular function or business unit, they're now six months behind,” he said.

The higher turnovers in senior teams by outsider CEOs are intrinsically linked to the challenges they face. Astorino suggests that when an organisation takes on an outsider CEO, it is because of either a shift in culture that needs a large change, or an incapacity for the organisation to generate a CEO at all.

“So, either way, outsiders are often coming in to a tougher job. They're going to be driving change, and so they're going to need new people with new skillsets to drive the business forward,” he said.

As for removing HR professionals, Astorino believes this is due to the closeness a CEO should have to the head of their HR department, and as such they need to ensure a strong relationship and bond with whoever is in that position.

“When you're coming from the outside, the CFO role and the head of HR are the right and left wing of a CEO, they're the people CEOs come to trust most for obvious reasons,” Astorino stated.

Has your organisation recently experienced a change in CEO? Internal or external? How has it affected the organisation?


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