Early last October, the CEO of DuPont stepped down after struggling for months against a strong U.S. dollar and weak Brazilian agricultural markets. A board member and veteran U.S. executive took over as interim chief as the company looked for a replacement.
Weeks later, United Airlines announced that their new CEO had suffered a heart attack and would be on medical leave indefinitely. Another interim appointment: the firm’s general counsel took over as acting CEO and announced he would remain in that position until the former CEO’s return.
These are just two of many scenarios in which an interim CEO appointment may be necessary. A range of events—death, firings, scandals or acts of God—can lead to the appointment of an interim chief. And there is no standard for who will take the reins between permanent CEOs. At DuPont, it was a board member; at United, the general counsel; and in other instances, it will be someone from elsewhere in the company—or even outside it.
Some interim chiefs are lame ducks—for example, a board member who steps in for a while to show the world that someone has a hand on the company’s rudder. Other interim chiefs will be charged with executing a turnaround, and still others will come from executive management and may want to stir the pot, create change or even contend to be a permanent replacement.
What do all of these scenarios—indeed, any interim CEO appointment—share in common? The devil is in the dynamics: Each one carries distinct organizational and psychological implications for the company at which it takes place, as well as the people involved, which will largely define the job at hand for the interim chief. What kind of platform does the acting chief have to create change? Is he or she a contender to take over in full? What are the limitations, personally and professionally, for the person who is trying to get things done in this interim position? These are some of the questions that will help a board and an interim chief define the role of a particular interim appointment.
It falls on the appointee and the company’s board to be clear about their intentions for the interim chief’s role, to understand what the resulting mandate will be and to develop a plan to manage the transition from start to finish.
“When I was appointed Target’s interim CEO, I had the benefit of strong support and clear guidance, which helped me succeed in moving the organization forward. The clarity and my collaborative working relationship with the chairman of the board, Target’s leadership team and the full board of directors ensured our collective success in driving the business and preparing the enterprise for new leadership,” says John Mulligan, COO of the retailer Target.
Mulligan provides an excellent example of an effective interim chief. He took the job in May 2014, moving up from his CFO post upon the previous CEO’s resignation. He and the board were abundantly clear about his role as acting CEO—he was there to lead the company until they found a new chief. Thanks to this clarity during the leadership transition, Mulligan performed very well and returned to the CFO spot after four months at the helm—before being promoted to COO.
The need to name an interim CEO arises for a slew of reasons, and each appointment is different. That said, circumstances are almost always sudden and unexpected, investors and other stakeholders are often spooked and it is a challenge for any acting chief to excel.
The performance of an acting chief is as dependent on governance as it is on the effectiveness of the individual interim CEO. Accordingly, boards and their appointees should take immediate steps to understand the unique dynamics of an appointment—and the resulting roles and expectations of the interim CEO—and remember that the ingredients for a successful acting chief don’t stop at finding the right appointee.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
