When to Hire a CEO Internally - If your organization is on a good path when your leader leaves, with solid revenue, promising projects, and bright prospects, an internal CEO is more likely to stay the course. Internal hires will be able to use their knowledge of the company, its history, and its current trajectory to ensure the positive path is maintained. If developed internally, leaders will have the necessary traits to be successful. A transparent succession planning process will mean other senior leaders and members of the organization accept this internal hire as the best fit for the role and will be likely to support their decisions.
When to Hire a CEO Externally - However, if your company has a future that is uncertain or, worse, trending in the negative, an external hire can be a breath of fresh air. They can offer new ideas and perspectives to help turn your company around, and they likely wonâ€t be married to a failing strategy. They will be able to make tough cuts to keep a financially-faltering company afloat. Your company will pay more for their novelty, but if your company is at risk, you may not be able to afford not to go external.
Either way, choosing a new CEO is an important decision that cannot be made lightly. Your company will need to make a decision based on the unique balance of timing, finances, industry, and availability. Before hiring a CEO, consider leveraging the expertise of an external succession planning consultant to help you make the right choice and to navigate the process that follows.