Golden Eagle Health Diagnostics, Inc. has faced a challenge to find a new CEO in six months. The situation is of significance because a chief executive officer (CEO) succession and selection plan should be an ongoing process. It is so since the absence thereof can create essential problems for the company. Thus, the given executive brief is going to design a CEO succession and selection plan for Golden Eagle and explain what specific qualities potential CEO candidates should have.
Designing and Executing CEO Succession and Selection Plan
To begin with, one should comment on the necessity of utilizing a strategic and ongoing approach toward CEO succession and selection. It is so because this position is essential for the company’s performance, and the board of directors should be ready to find a new CEO within a limited timeframe. Since Golden Eagle does not have an existing plan, the following information will explain the key components that should be inserted in the process under analysis.
The first thing to consider is to determine whether the company needs an inside or outside candidate. The two variants are working options, but insiders seem more suitable here because of a few aspects. On the one hand, an inside employee is preferred since Golden Eagle is performing well, and a new CEO is necessary not because the company fails to meet its strategic goals (Nili, p. 3). On the other hand, an outside candidate will need more time to start acting because they are less familiar with the company compared to insiders (Larcker and Tayan, p. 9). Consequently, it seems more suitable to find a new CEO among the Golden Eagle’s employees.
The next step is to create a viable pool of candidates based on their abilities and potential. Firstly, it is reasonable to make sure that a new CEO is “a good fit culturally with the board and the company” (Katz, p. 2). It relates to the fact that a candidate should not welcome or prioritize values and objectives that are conflicting with the ones that are promoted by the board. It is another sign that an inside candidate is better. Secondly, a new CEO should have a long-term vision of the company’s development. According to Katz, short-term thinking was one of the reasons that contributed to the financial crisis, and that is why this feature is a must-have in the modern world (p. 2). The information above stipulates that Golden Eagle requires an individual who shares the company’s values and knows how to achieve strategic goals. In other words, the company should look for qualified and competent individuals. Thus, the new candidate should specialize in health care diagnostic equipment, be familiar with a digital medical market, and know how to cooperate with the investors.
At the following stage, it is rational to consider how to determine whether a candidate has the competency mentioned above. While Golden Eagle needs a new CEO in six months, it is impossible to utilize long-lasting and comprehensive programs to identify and even train suitable individuals. According to Katz, however, the most effective approach is to evaluate candidates’ past performance (p. 2). This information can indicate, for example, that a person has successful experience in dealing with various issues or that their past performance reveals cases of professional inefficiencies.
At the same time, analyzing past performance should not be the only criterion to consider. The previous steps help eliminate the individuals with inadequate experience and unsuitable skills, but it is also necessary to predict whether a candidate is likely to make a difference for Golden Eagle in the future. Charan stipulates that standard interviews between directors and the final candidates cope with the task (p. 12).
These interviews act as a last-resort stage because they help the board rank the candidates. If all the previous steps have drawn attention to the individuals’ strengths and weaknesses, the interviews show whether the persons’ advantages have been adequately presented. It relates to the fact that people tend to exaggerate their abilities, and personal conversation can reveal it. Thus, the board of directors should rank the candidates based on their communicative skills. It is so because effective communication and collaboration between the CEO and the board can enhance the company’s performance (Katz, p. 3). Furthermore, personal conversation is useful because it demonstrates whether a candidate has leadership qualities, critical thinking, and problem-solving skills that are necessary to a successful CEO. In addition to that, interviews show whether a candidate can be independent, or they will be a board of directors “puppet.” Weak CEOs should not be welcomed because they usually become a target of aggressive shareholders. As a result, such a CEO will start promoting the interest of specific shareholders rather than that of the whole company. Consequently, the interview is the final stage to determine a suitable CEO.
Specific Qualities of a New CEO
As has been mentioned, the new CEO candidates should have a set of required skills and abilities. It refers to leadership, market competency, communicative skills, and others. In addition to that, Nili emphasizes “operational ability, strategic outlook, congruence with the corporate culture, and a high level of social and emotional intelligence” (p. 3). This information shows that attention is drawn to both personal and professional qualities, meaning that a CEO is not all about business, but also about personal relationships. As far as my personal opinion is concerned, I think that it is impossible to state which group of skills and abilities is more significant for this position. However, I am sure that the absence of any of them will result in essential problems for an individual. Consequently, a person who wants to become a CEO should have perfect communicative skills, leadership abilities, market and industry proficiency, as well as a capacity for critical thinking.
A CEO succession and selection process is an essential phenomenon for every business because it makes the company’s performance smooth and effective. As for Golden Eagle Health Diagnostics, Inc., the process is a challenge for the firm because it is necessary to find a new CEO in six months. However, the company can cope with the task if it draws attention to the key components that have been highlighted by the given executive brief. Thus, Golden Eagle should find a new CEO from among the existing employees because these individuals are well familiar with the company’s culture and values. Furthermore, it is reasonable to analyze the candidates’ past performance and competency to understand whether they have sufficient experience and abilities to run the company. The board of directors can reveal this information through interviews. Finally, it is necessary to emphasize that an individual should have both perfect personal and professional skills to become a successful CEO.
- Charan, Ram. “The Secrets of Great CEO Selection.” Harvard Business Review, 2016, pp. 1-14.
- Katz, David A. “Advice for Boards in CEO Selection and Succession Planning.” Harvard Law School Forum on Corporate Governance and Financial Regulation, 2012, pp. 1-7.
- Larcker, David, and Brian Tayan. “CEO Succession Planning.” Stanford Graduate School of Business, pp. 1-18.
- Nili, Yaron. “Board Challenges: The Question of CEO Succession.” Harvard Law School Forum on Corporate Governance and Financial Regulation, 2014, pp. 1-4.