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How to break the acting CEO cycle


Great challenges usually represent great opportunitiess if you have the talent and time to work the transformation.

Perhaps the most striking example is the crisis affecting some state-owned enterprises.

Annual losses continue to mount at many SOEs while service delivery flounders. Difficulties are compounded by the fact that so many state agencies are run by acting CEOs.

An appointee with limited time for preparation and perhaps little leadership experience has a tough job turning any business around, though simply stemming some losses would be a good start.

Challenges are obvious enough. What about opportunities?

Positives are there all right, but first we need to face the brutal truth.

In most cases, SOE succession planning has been sadly neglected. Few internal candidates are ready for the next step up.

In the private sector, the solution would be clear. Executive search specialists would be hired, the profile of any incoming leader would be established and talent identification would start.

In-depth candidate assessments would begin. This would include alignment between the prospective candidate’s experience and the business strategy.

A private company’s board might be embarrassed by inadequate succession planning, but would grasp the nettle and outsource all talent acquisition and assessment functions to the experts.

As a result, the board would be presented with well-qualified candidates with the relevant experience, energy and drive.

What’s wrong with this approach?

Absolutely nothing. Unfortunately, it so rarely happens in our public sector.

Many SOEs seem reluctant to let go of talent acquisition processes, though it is unusual for internal capacity to be readily on call in this highly specialised field.

This anomaly is difficult to understand as state agencies often make use of consultants in other areas of specialised expertise.

One reason may be the belief that executive search companies focus exclusively on the private sector while managers outside the public domain are unwilling to take a state job.

These beliefs are wrong on both counts.

Many highly competent corporate performers are willing to make this move and the remuneration gap between the private and public sectors has narrowed considerably.

It is difficult to prise away a star performer from a top listed company, but a new wave of extremely able leaders is coming through, many with the credentials for SOE leadership.

The talent is there all right. We just have to harness it. Rigorous selection on core competencies is essential.

The key after that is time on the job.

Interim CEOs rarely have time to drive material change.

The moment a CEO starts a job, the clock starts ticking. A properly selected incoming CEO must hit the ground running and needs at least a year to understand the business, develop a strategy and build a team. Another year (at least) is necessary to implement strategy, harvest ‘low-hanging fruit’ and create momentum. A further year (minimum) is then needed to achieve results.

Simultaneously, initiatives have to be launched to build a culture based on strong values and commitment to the organisational vision and mission. Robust corporate governance is crucial.

Proper succession planning should also be instituted … but that’s another topic. For now, simply breaking the acting-CEO stalemate will be a huge step forward.



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