March 24, 2024

When the CEO Quits: How to Prepare and Respond

When the CEO Quits: How to Prepare and Respond

A record 1,914 CEOs left their jobs in 2023, a whopping 55 percent increase from the previous year, according to a report conducted by Challenger, Gray, and Christmas. That figure far surpasses the previous record of 1,640 CEO exits in 2019. And the trend isn’t abating. In January 2024, another 194 CEOs said goodbye, up 73 percent from the number who left their posts in January 2023.

That means companies across the US are scrambling to fill a leadership void when a CEO leaves or unexpectedly resigns. And if the trend continues, it means that every company should be preparing for the sudden need to find a new chief executive.

Here, we outline the most important steps a company should take when the CEO quits.

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March 28, 2023

Firing a CEO: The 4 Questions Every Board Should Ask When the CEO Needs to Go

Firing a CEO: The 4 Questions Every Board Should Ask When the CEO Needs to Go

So you’ve made the decision that a change needs to happen at the CEO level, and heaven knows it’s painful! You rely on the CEO as quarterback of the team. It feels like the chief executive is indispensable. But you signed up for service on the board of directors. You know that while corporate governance is a general and varied responsibility, the shareholders trust the board to choose the right CEO. It is, perhaps, the board’s most important decision.

Of course, you’ll go through a permanent search that will be thorough, even if internally focused.

But what happens if you need to fire the CEO and find a new leader right now? Having a CEO exit with no CEO succession plan in place can create a leadership vacuum. The resulting instability within the organization can cause major issues and harm company performance.

The need for a new Chief Executive Officer, the right Chief Executive Officer, is urgent.

After a CEO dismissal, the first thought for many public companies is to look around the boardroom table to see who’s brave enough to be named interim CEO for Sarbanes Oxley compliance.

But, where’s the guts in just appointing a placeholder to keep the seat warm?

The modern world now presents you with a far more robust choice: a true interim CEO. A veteran executive who’s been there, done that. Who is expert at jumping into companies going through points of change. And who is accountable for action and results.

When considering whether to bring on a placeholder versus a true interim CEO until you can hire and onboard a new permanent CEO, here are the questions to ask at your next board meeting.

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September 29, 2022

CEO Turnover: Why the Bosses Are Leaving & Who’s Replacing Them

CEO Turnover: Why the Bosses Are Leaving & Who’s Replacing Them

Millennials and Gen Z employees might get all the press for their “Great Resignation” but they aren’t the only ones who are leaving their jobs in droves. CEOs are too. The Great CEO Turnover, which peaked in 2021 and early 2022, has leveled off a bit. But it certainly doesn’t mean that your CEO is planning to stick around for the long haul.

Outplacement firm Challenger, Gray & Christmas compiles a monthly report on the CEO turnover rate. The July 2022 report shows that CEO changes at U.S. companies fell to 58 in July, down 45% from the 106 CEO exits recorded in June. It was the lowest monthly total since the early pandemic departures of April 2020.

However, departing CEOs are hardly a thing of the past.

When Deloitte and independent research firm Workplace Intelligence surveyed 2,100 employees and C-level executives in the United States, United Kingdom, Canada, and Australia, they found that an eye-popping 70% of top management are seriously considering quitting for a job that better supports their well-being. And 81% of the top execs say that improving their well-being is more important than advancing their career.

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January 18, 2022
Robert Jordan

Executive Matchmaking and the Sacred Trust of Ownership

Robert Jordan | CEO, InterimExecs
Executive Matchmaking and the Sacred Trust of Ownership

When you own the company, it’s nothing like being an employee. You might as well compare lifting up a hundred pound weight versus a feather.

Through the years I’ve owned or been a shareholder in a number of companies. So when I initially started a career taking on interim assignments – in my case helping companies prep for sale and ultimately exiting to a financial buyer or strategic investor – I approached every company as if it was my own.

Only in running and owning a company can you know firsthand the sleepless nights.

Pondering everything. Like cash flow.

Hiring and retaining your best people.

Making payroll.

The questions are endless: how do we compete better? How do we win ridiculously large contracts? What do we do if the market goes down? How do we make our marketing viral?

Ownership is not for everyone and it is easy to feel….well, alone.

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May 7, 2021
Greg Voutsos

Great Interim Executives Are Partners

Greg Voutsos | Head of Operations & Client Engagement
Great Interim Executives Are Partners

When smart owners hire managers with the intent of working together for a long time, it’s easy to call their relationship – if it works – a partnership. It’s not a partnership in the legal sense and it’s not a partnership in the investment sense, where partners share costs and gains.

But in great working relationships between employer and employee, each looks out for the other. Each invests to build and maintain a good relationship and share the gains of working well together and advancing the mission and economic and social health of the organization.

The problem with rampant outsourcing is that it leads to thinking on the part of employers and contractors that relationships are reduced to a transaction. Pay me X and I’ll perform as ordered. Stop paying me and I’m gone.

The logic is the same whether it’s one contractor or ten thousand. While it is transactional in the letter of the contract, it is not in the spirit of one.

The danger of a purely transactional mindset is that loyalty goes out the window. Loyalty from a boss to an employee and loyalty from an employee or manager to the organization.

In organizations with a strongly transactional bent you can bet that any corporate talk about integrity is a watered-down concept at best.

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March 19, 2019

Warfare at the Top: CEO vs Chairperson Battle Royale

Warfare at the Top: CEO vs Chairperson Battle Royale

We just experienced possibly the largest wave of CEO departures in recent history. Was it due to falling profits? Poor succession planning? Or is there more drama behind the scenes? Think firings, hurt egos, politics, and personal infighting. Author Isabelle Nüssli uncovers one of the big reasons for turmoil at the top ― the fractious relationships between egos at the executive level, particularly between CEO and chairperson. Hence the brilliant title of her new book, Cockfighting: Solving the Mystery of Unconscious Sabotage at the Top of the Corporate Pyramid.

“When you read the news, usually the reason [given for the CEO leaving] was strategy misalignment or different leadership style or different chemistry, etc. But the story that is not put out to the public is that there was a relational conflict, which apparently is the case most of the time,” says Nüssli.

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June 25, 2018

Top Questions Companies Should Ask an Interim Executive in an Interview

Top Questions Companies Should Ask an Interim Executive in an Interview

We have spent years developing a methodology for matching companies and executives, but ultimately at the top of the list is chemistry between the executive, private equity fund, company owner, or management team. So once we suggest an executive or team to fit a company’s needs, the question usually arises: what questions should I be asking in an interview to see if it’s a good fit?

Here are a few recommendations so you will be armed with targeted questions for the interview process:

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May 3, 2018

How to Evaluate Executive Candidates

How to Evaluate Executive Candidates

“A man’s got to know his limitations.” Clint Eastwood’s immortal line as San Francisco detective Harry Callahan in the movie Dirty Harry stands true today when board of directors and management teams think about how to evaluate executive candidates. If you have been in management, ownership or board leadership long enough, sooner or later you’ve learned that no one has a perfect track record when it’s come to hiring.

So how do you increase your chances of success?

You’ve already taken the first step – by thinking of interim executives in order to mitigate your risk. You are making sure you have a clear roadmap and understanding of the leadership skillsets needed to get you where you want to go before committing to anything permanent too soon. That’s good.

Whether interim or permanent, there are questions to ask and ways to evaluate your organization’s fit with an executive leader.

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November 9, 2017

A New Approach to Executive Search Services for Fast Growing Companies

A New Approach to Executive Search Services for Fast Growing Companies

The project-based executive, also known as an interim executive has been around for 30+ years, having originated in the Netherlands, later expanding to the UK, the rest of Europe and finally reaching America around 2000.

The early model for interim engagements was invariably focused on turnaround and distress situations: an organization in pain would eventually decide they couldn’t solve the problem on their own, and would seek an outside resource, often through executive search firms, where the executive was never a permanent employee.

Interims have played a part since the early days of private equity funds, where fund managers would use executive search services as part and parcel of their post-acquisition ownership strategy. A fund would see big potential in a struggling company, and would realize big returns by bringing in an outside executive to turn the company around. Thus the early version of interim – interim 1.0 – was all about fixing what was broken.

The next phase in interim executive deployment launched in the US, arguably emerging out of the tech community.

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November 7, 2017
Olivia Wolak

Why an Interim Management Search is Not Like Hiring a Permanent Executive

Olivia Wolak | President, InterimExecs
Why an Interim Management Search is Not Like Hiring a Permanent Executive

Many owners and boards are new to the game of hiring an executive specializing in interim management.

As the gig economy has gained momentum, more companies are drawing on executive level resources for specific growth initiatives or to help troubleshoot inefficiencies or problems. Interims come in on a project basis as contractors, therefore not adding to permanent overhead.

Because the majority of companies have never written a contract for an interim, they draw on what they know – the playbook for searching and hiring a full-time exec.

Yet, interim management and permanent employment are two different worlds.

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