How to identify the next CEO: Choosing the next company leader is all about culture
Audra Christie is a human resources executive and certified executive coach who began her career as a financial analyst at the Federal Reserve Bank of New York. She later took on leadership positions across multiple industries, including working at the world’s largest company, Walmart.
That opportunity led Christie and her family to Arkansas so she could lead human resources in merchandising and international divisions. It was a dramatic shift in scenery, which meant trading the bright lights of Times Square for the five-and-dime feel of Bentonville City Square. Christie was given a nine-month onboarding opportunity, and on day three she was assigned a “culture coach.”
She says the biggest gift she received from the retailer continues to pay dividends today as she coaches C-level leaders across North America and touts the value of a culture coach.
“It’s hard to transition into the world’s largest company if you don’t have a culture go-to leader to ask the awkward questions you have when you are new,” Christie says. “The culture coach translates what’s being said and, just as importantly, what’s not being said.
During this onboarding period, I was deliberately educated on the history and evaluation of the culture and knowing the moments where I could comfortably fit in and stand out.
My (coach) also opened up his network to me to build relationships quicker and assimilate into the culture. It’s an invaluable way to create a level of confidence for someone new.”
Through her company, Mindset Change Coaching, Christie now specializes in helping newly appointed leaders transition into their first C-level position and claim their executive presence. As companies evaluate their succession planning strategies following a turbulent year filled with the stress of a pandemic, remote work, caring for and teaching kids at home, racial injustices, protests and a contentious presidential election, Christie says a focus on culture is more important than ever.
“Most corporate cultures aren’t staying the same these days,” Christie says. “When you are hiring a CEO, you want that person to be a culture-add based on their experience, expertise and what they can bring as a dynamic leader. That helps build upon a culture, so it doesn’t stay stagnant. That helps lead the organization forward.”
The unexpected nature of COVID-19 has put a spotlight on the importance of succession planning so companies have skilled leadership at the ready to navigate times of crisis. The pandemic has had five important effects, according to the Center for Executive Succession at the Darla Moore School of Business, University of South Carolina. It has:
• Focused corporate boards on the criticality of talent management.
• Taken off succession blinders.
• Shown a need to develop talent to capabilities and not profiles.
• Shown a need to expand how companies interact with candidates.
• Revealed that board meetings can be done virtually and at a fraction of the cost of in-person gatherings.
Eric Douglas Keene, an Ohio native who runs Keene Advisory Group and is managing director of board and CEO Services at New York-based RSR Partners, says boards need to be especially proactive these days to ensure there are enough candidates in the C-suite talent pipeline.
That’s because a booming stock market has given some leaders the flexibility to step away from corporations to pursue other interests. The pandemic has prompted people to search for work they consider more fulfilling. And the social justice movement has moved some leaders to direct their energy toward causes that can help minority communities.
Keene, an advocate for increasing the diversity of boards and C-suites, recommends boards expand their definition of what “qualified” means as they cultivate talent pipelines, internally and externally.
“Instead of emphasizing prestige of education (at Ivy League schools) or popular companies worked for, understand the demonstrated accomplishments of a candidate and the situation in which they occurred,” he says. “During a succession process, leaders can be identified early, especially within the organization, and their capabilities can be developed over time.”
Keene also is having more conversations with boards and corporate leaders about the importance of moral quotient, emotional intelligence, empathy and desire for leaders who can influence a team through humility, grace, transparent communication and compassion.
Artie Isaac has chaired CEO peer groups with Vistage Worldwide since 2011. He, too, says the pandemic may cause some companies to focus more on finding leaders who demonstrate emotional intelligence and a passion for developing relationships.
While those skills always have been important, the health crisis and a dramatic shift in how people work – including increased expectations around child and family care – have made them even more sought after.
“I think you’ll see executive competence and executive humility,” Isaac says. “I don’t believe any of us in the workplace, in the community or in families are going to get away with ‘might makes right.’ Emotional intelligence skills are going to get a lot more attention and be embraced by those who power through.”
Sharing a cultural vision
He became CEO in 2010. He thinks it would be a mistake for CEOs not to prioritize identifying a successor, not just because they will retire one day, but because unexpected events like a death or illness could occur.
Knowing there would come a day where he would want to spend more time with his family, Schertel began the succession process by promoting Dr. Linda Lehmkuhl to chief medical officer in 2015. She became CEO in 2019.
Lehmkuhl joined the veterinary practice about a year after Schertel did. Being able to work closely together for all those years and know each other on a personal level built up trust between the two.
“When you can develop your successor and work with them over a number of years, you increase the odds of success,” Schertel says. “I found out that we had similar problem-solving skills. We also came to similar conclusions around data that was put in front of us. We also had the same vision of the culture of our organization. Those factors told me she could be the future leader.”
Alex Shumate and his successor, Traci Martinez, also worked together for more than a decade at Squire Patton Boggs.
Martinez became managing partner in January and Shumate remains active as a senior partner.
Throughout Shumate’s 30-year run leading the firm, he made it a point to develop future leaders. That included establishing an advisory group made up of the heads of the various practices at the firm so he would be aware of the firm’s rising stars.
Martinez stood out for a number of reasons. She was a well-respected lawyer who demonstrated leadership by serving on the firm’s global board, was active in the community and mentored others. She also was active in the firm’s hiring processes and specialized in labor and employment law and human resources.
Known to have a warm personality, Martinez also made it known that firm culture and diversity initiatives were important to her. All that, combined with demonstrated skills in recruitment, retention and talent development, including among millennials, elevated her to the top of the firm’s list as Shumate’s successor.
So far, the transition has gone off without a hitch. His focus now is on client relationships while firm leadership matters are up to Martinez.
Still, the two communicate often and meet regularly for breakfast or lunch.“We work well together and it’s important for the firm to see that,” Shumate says. “It gives everyone great confidence we made the right decision that will benefit the organization for many years to come.”
Laura Newpoff is a freelance writer.