WJM Case Study: Choosing a New CEO

Situation

The CEO of a $3.5B, publicly traded company contacted WJM Associates and requested a meeting to discuss the Board of Director's goal to begin a CEO succession planning process. After 8 years of exemplary service provided by the existing CEO, the Board looked to partner with a firm to assist them in consulting, assessing and coaching select internal candidates. The identified candidates all reported to the CEO and were long term employees of the company.

The CEO and VP of Human Resources met with WJM to present and discuss in detail their goals and aspirations regarding this initiative.

WJM's Pre-Project Approach

In addition to a comprehensive review with the CEO and VP of HR, WJM met with Board Members - Executive Compensation and Development Committee - to discuss and build upon agreed position specifications and desired outcomes. Additionally, role clarity, timing as well as confidentiality issues were discussed and agreed to by all meeting participants.

Based on best practices, WJM recommended an external CEO search to the Board which they explored and conducted through their own due diligence.

Objectives

  • Assess executives on the short list.
  • Create a developmental plan for each.
  • Select an Executive Coach for each.
  • Coach each executive towards the goals of the developmental plan.
  • Monitor the success of the coaching through periodic check-ins with key stakeholders (midpoint and endpoint).
  • Enable the Board to make an informed selection of the next CEO based on comprehensive assessment and development objectives of each executive.

WJM Associates' Approach

The WJM Account Director consulted with the CEO, the Board and the VP of HR to confirm and slightly modify the desired competency model for the new CEO. The model highlighted the core skill sets anticipated to be successful in the position for the next 5 - 10 years. 360° assessment questions were formulated based on these competencies.

A WJM Ph.D. industrial psychologist administered the assessment tools. Each executive took the online MBTI and 16 PF assessment instruments. The Consultant also conducted 360 interviews for each of the senior executives, 8 - 10 executives each, which consisted of peers, subordinates and the CEO.

The Consultant prepared a detailed Leadership Proficiency Evaluation™ (LPE™) for each executive. Each LPE™ included the interpretation of the assessments and 360 results, and general observations gathered during the Consultant's meetings with each executive. The Consultant met with each executive to discuss and interpret the LPE™ as well as inform each of them that an abbreviated LPE™ would be shared with the CEO, the Board and the VP of HR with their approval. None of the executives objected.

WJM's Account Director and the Consultant met with the Board to deliver top-line LPEs™ for each executive, answer questions and provide additional detail, interpretation and clarity. The current CEO was not present during these meetings to ensure objectivity.

Based on the developmental needs of each executive, the WJM Account Director provided a selection of 3-4 executive coaches for each executive. Each executive met or spoke with each coach on his short list to evaluate and eventually select for best fit.

Once coaches were chosen, each executive began a 6-month executive coaching engagement. In addition to customized developmental goals, the coaching focused on a set of developmental needs, highlighted in the LPE™, specific to the role of the CEO:

  • Strategic Leadership
  • Change Leadership
  • Inspirational Leadership
  • Values Guardian
  • Developing Organizational Talent
  • Global Leadership
  • Personal Leadership Characteristics
  • Organizational Knowledge

WJM provided direction to the CEO in terms of providing support and feedback to the executives during the assessment and coaching process. The coaches also provided helpful input to the CEO regarding his role during the coaching engagement.

The CEO needed to understand the overall process and be comfortable in his role. The CEO was involved in the formulation of the coaching agreement, agreed with developmental goals, provided specific and constructive feedback to each executive throughout the process, and met or spoke with each coach for a mid-point and end-point check-in. During the process, the CEO evolved into an advocate of development and coaching.

WJM's Account Director's role during the process:

  • Ensure that expectations were being met.
  • Ensure that the engagement proceeded as planned.
  • Be a resource for the CEO and the executive coaches.
  • Be updated periodically by coaches on non-confidential matters and update the VP of HR accordingly.

Results

The President of the company's largest division, in addition to working with his primary coach, also received communication training through a second, specialized WJM coach. Also, a finance professor was brought in at the suggestion of the primary coach to work with this executive to further enhance his financialfluency and acumen. The executive also attended executive development programs at Harvard and INSEAD.

This executive was selected to become the company's next CEO. Initially he was promoted to President and COO of the overall company and several months later was nominated by the Board to become the next Chairman, President and CEO.

Another division President decided that he preferred to stay in his current role. The executive's business unit is considered the growth engine of the company and he expressed his interest in staying in the position to further lead and execute the division's growth plans. Although this executive opted out, he still continued through the assessment and coaching process.

Lessons Learned

Appropriate and timely upfront communicationtools and meetings need to be coordinated with theexecutives going through the assessment and development process as part of a succession. Typically the CEO with the support of the VP of HR sets the stage for this type ofengagement.It is important to articulate the goalsand desired outcomes of the program to each executive to ensure there is no ambiguity or misunderstanding.

Have a thorough vetting process to build a sound short list. When building a short list for succession planning purposes, an organization needs to take into account unresolved issues, ambition, values and goals of the executives being considered.

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