Sample this: A CEO's time to leave an organisation comes and a new one takes over but the process is muddled by internal company politics like the CFO being passed over for the post and the absence of goodwill in both the incoming and the outgoing CEO, especially in cases where the outgoing boss is being bundled out due to non-performance or other such issues.
The company is listed on the stock exchange and this information becomes known to the market. What follows is a free-falling of the value of the company shares and t>veryone suffers. This is how a first time transition between county governments could unfold if not managed and coordinated properly.
The elections of the new county goverments in the just concluded 2017 general elections has presented kenyans, with a new constitutional experience. It is the first time that county govemnents are transiting from the first crop of governors to newly elected one whether re-elected or newly elected. As is expected with a new experience, this transition has left Kenyans guessing and second-guessing on what should or should not happen.
In corporate leadership, this type of transition at the C-suite level is more often than not characterised by a well- coordinated and structured handing over in a defined transition period, mostly a month or two. In politics however and where public resow-ces are concerned and the complication of a first time experience, there were bound to be hiccups.
While the county government handover was supposed to be guid-ed by a law that fulled to pass in the ~ Parliament, the changeover could benefit from lessons in effective suc-ession at the C-suite level.
Literature on effective CEO transi-tions exist and the most cited include that from Havard Business Review ( HBR), US HR firm Russell Reynolds Associates and the Canadian HR Council. About four strategies are cross-quoted in these sources and they include the following:
One, there must IJe·a transition plan a11cJ the executors should include the board and senior management. An article appearing in the HBR notes that in the US, presidential candidates typically name a transition team and begin planning for a new administra-tion months before a single vote is cast on election day, because· they want to be prepared in the event they win. In corporate life, however, too many CEO transitions are infonnal or impro-vised. In a 2010 survey conducted by the executive search firm Heidrick & Struggles and Stanford's Rock Center for Corporate Governance, half the companies surveyed reported pro- viding no fonnal transition plan for a new leader.
Secondly, some critical questions must be answered and HBR talks of three variables which are: first, is the new CEO from inside or outside the company? Second, will he or she take on that role immediately or spend time as a "designated succes- sor," working along side the outgoing CEO while typically carrying the title of president or chief operating officer? Third, whether or not the transfer of power is immediate, will the outgoing CEO continue to be a presence in the company, as chairman of the board or as an adviser?
Thirdly, most succession planning experts agree that there must be an intensive knowledge sharing. The Canadian HR membership asrocia- tion, HR Council proposes that the outgoing and incoming CEO meet frequently for in-depth discussion re-garding the operating styles, histories and expectations ofboard members and senior management, as well as other stakeholder constin1encies, in-cluding investors, creditors, customers analysts and regulators.
Muriithi Ndegwa OGW, HSC, MKIM.
KIM Executive Director/CEO