We've recently discussed as a team the impact of internal promotions to CEO versus external hires into the role. When is either a positive or negative signal?
Academic research is inconclusive on the subject. (1/n) gsb.stanford.edu/sites/default/…
Academic research is inconclusive on the subject. (1/n) gsb.stanford.edu/sites/default/…
Our general take is that the more unique the corporate culture - and assuming it is virtuous - the more an internal promotion makes sense.
In this case, outside CEOs are less likely to be accepted by the existing culture and more likely to want to do things their way. (2/n)
In this case, outside CEOs are less likely to be accepted by the existing culture and more likely to want to do things their way. (2/n)
In contrast, external hires make the most sense when the culture is bland/destructive, the strategy is broken, or the company is missing a key set of skills.
Ex here is $CMG where Brian Niccol brought in operational and tech expertise after CMG's foodborne illness crisis. (3/n)
Ex here is $CMG where Brian Niccol brought in operational and tech expertise after CMG's foodborne illness crisis. (3/n)
How do you think about internal/external CEO appointments? Is each case unique or are there good rules of thumb?
In general, we think that the wrong "sort" of appointment increases uncertainty of outcomes, but doesn't necessarily mean success/failure is inevitable.
In general, we think that the wrong "sort" of appointment increases uncertainty of outcomes, but doesn't necessarily mean success/failure is inevitable.
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