Nearly half of boards start a CEO transition and find nobody ready. Jason Baumgarten, CEO of Spencer Stuart, runs one of the largest CEO search practices in the world, and he sees the same gap: a candidate can’t explain why a result happened. Fred Voccola, CEO of Simpro, scaled his prior company, Kaseya, to $1.6 billion in revenue, and he says the failure is the same: being in the room when the numbers moved isn’t the same as knowing why.
Quick Answer
I’m Glenn Gow, and after interviewing board members, search leaders, and successful founders on the Scaling Executive Podcast, the pattern is consistent: boards do not reward CEOs who got lucky when the numbers moved. They reward CEOs who can trace every major result back to a specific decision, workflow, or leading indicator. If you cannot explain why revenue, margin, or retention improved, a board reads you as unready no matter how good the number looks. That decision-level fluency is the readiness criteria every board already applies, whether or not anyone writes it down. Build it now, and you become the internal candidate a board trusts instead of the one it passes over.
What boards actually check before they call you ready
Most succession plans fail at the same question, and I hear it from nearly every board-side guest on the podcast: a board is not grading your resume when it decides who is ready. It is grading whether you can answer, under pressure, why a result happened.
Jason put it plainly: “Why did the stock go up? Why did the revenue go up? Why did the profit margin go up? Why did your customer NPS go up? Why did your employee satisfaction go up? Do they know why? Can they connect the dots between what they’re doing and the outcomes they’re seeing? Or are you just getting the luck factor of the executive was there when good things happened and another executive was there when bad things happened.”
Boards want safety, not exception, when they staff a leadership transition. I coach CEOs to hear the difference themselves: a candidate who says “I hit my number” fails that test every time. A candidate who says “I moved our contract renewal conversation up two weeks after the churn data showed a pattern in month four, and margin followed” passes it.
The outcome measurement trap that keeps you off the shortlist
Fred watched this trap catch executive after executive across two decades of running companies at scale. Boards and CEOs alike default to outcome measurement because it is easy to track and easy to defend in a meeting.
“Most are asking their leaders, tell me how we’re doing. And then after six months or nine months or a year, well, I didn’t get the result, so now I have to fire you. That’s not managing, that’s not providing help. That’s not holding accountable. That’s saying it’s a binary, you win or you fail. And that’s why many, many executives rely on simply outcome measurement and replacement of teams instead of deconstructing the workflows, deconstructing them to the leading indicators so you could actually help,” Fred said.
I have watched boards accept outcome measurement for years, then discover during a transition that nobody ever asked the internal candidate to explain the workflow while it was running. Succession fails the moment it’s needed, in my experience, because nobody built the explanation muscle ahead of time.
Why functional experts stall before the board table
Roger Jansen, CEO of Exponential Health, spent his career watching talented specialists mistake departmental success for enterprise readiness. He led a workforce of over 26,000 employees at Spectrum Health and redesigned the human resources function there, and he saw the same failure repeat inside almost every company he touched.
“I see way too many organizations isolating finance in one area and human resources, operations, they all have their own teams and they all think those teams are their teams versus realizing the executive team is their team and they don’t get that because of that team doesn’t function well. The rest of the body can’t follow,” Jansen said.
Jim Schleckser, CEO of The CEO Project, names the second half of this failure: the executive who never fires themselves from their own gift. “As we grow the business, we have something that we’re excellent at. Marketing, engineering, sales, name it, whatever your gift is, and everybody has a gift. And eventually, you really should hire somebody to replace yourself in that job. There are people as good as you. And what happens is for the cost of let’s say a VP of sales, we actually get a CEO because you’re not doing the CEO job if you’re out making all the sales happen. So it’s the cheapest CEO you’re ever going to hire,” Schleckser said.
I have watched CEOs delay this exact hire for a year past the point they knew they needed it, because giving up the thing they are best at feels like giving up control.
Two boardroom philosophies on how ready executives operate day to day
Fred and Jim split hard on what a ready executive actually does once they have the title. Both built real companies. A board will ask you, directly or not, which one you are practicing.
Fred rejects the advice to hire great people and step back. “And I do not believe any executive worth his or her weight that is not, they cannot be successful if they’re not in the weeds. The biggest mistake that people make is they think now I’m scaling, now I can orchestrate instead of being what’s called hands dirty in the business,” he said.
Jim argues the opposite: ready executives are functionally lazy about anything below their pay grade. His 70% rule sets the standard. “So we have a rule we call the 70% rule. And the idea is if somebody 70% as good as you are at a task, delegate it immediately. The benefit to your point about scaling people is delegation is actually development. This is how we grow people. Is we throw in some deep water with some life preservers around so we don’t drown them. And they get better,” he said.
He extends the same logic to perfectionism. “If it’s 80% good, you go, fantastic, go. What happens is we’ve got this little perfection bug in our brain that goes, you know, if you change this and change that, then it’d be 97% good and that’d be perfect. And you know what you did? You just took it off their plate. It’s better to have somebody 80% right with 100% commitment, then 97% right with 50% commitment,” Jim said.
| Approach | Core belief | What it produces for the CEO |
| Fred’s hands-dirty model | You must know the weeds of every workflow to catch problems early | Deep operational control, with a ceiling on how fast you personally can scale |
| Jim’s 70% rule | Delegating anything a subordinate can do nearly as well builds the bench | A faster pipeline of ready successors, at the cost of some short-term polish |
A ten-person company usually needs Fred’s discipline. A four-hundred-person company usually needs Jim’s discipline, or it stalls under one person’s calendar.
The trust test that decides whether a board keeps you informed
Krishna Srinivasan, CEO of Live Oak, tracks a different readiness signal: how fast an executive shares bad news. “A very important adage is bad news cannot wait. And because when bad news waits, that’s when trust is broken. And so bad news cannot wait, and keeping them incredibly part of the journey as to the good news and bad news,” Srinivasan said.
Shannon Swift, CEO of Swift Solutions, has watched boards remove a CEO with no advance conversation about the exit timeline. “What I’ve seen in the past multiple times is a board removing a CEO without having that conversation. And I was actually in a board room when that decision was made, the CEO was not present. And I knew that the CEO had a definite plan on when he was going to exit out, but hadn’t communicated that with the board. And so there were a lot of assumptions made, but no conversations that were had,” Swift said.
I ask every CEO I coach the same question after hearing a story like Swift’s: how many days would bad news sit on your desk before your board heard it? Most take longer to answer than they would like.
Why family and private-equity transitions break the same way
Andy Unanue, Managing Partner at AUA Private Equity Partners, has run this transition from the inside as a former Chief Operating Officer of Goya Foods and now from the outside as an investor.
“I think the biggest challenge we all face in that situation is getting to the understanding that you can’t do everything and that you aren’t syndicatable or replicable, right? You need to be able to go from managing a business by doing to managing by managing and getting the right people and delegation,” Unanue said.
Colby Durnin, CEO of CREDE, sees the same pattern from the acquisition side, where the founder who built the company is rarely the person who should scale it. “It really comes down to finding the right folks and making sure that they’re buying into what you’re looking for overall. And sometimes that means removing folks from the top, because you’re looking for the next generation, not necessarily the group that you just bought or that CEO. Oftentimes if that person could have done it, they would have done it themselves,” Durnin said.
I tell CEOs preparing for a sale or an investment round to put their own successor candidate’s name in writing before the term sheet stage, not after a new board asks who’s next.
The big brand delusion that wrecks external successions
Greg Schott, Board Member of Cofluent and Pendo.io, has watched boards reach outside the company for a recognizable name instead of a decision-maker, and pay for it. “What I see happen over and over again is they start teeing up all these great candidates with big names from big companies. And they hire somebody and it turns into a colossal failure and they can’t quite figure out why. And usually the problem that I see happening is that you mistake success at a certain level of scale for what it’s going to take to be successful taking it from your current X to Y. A lot of folks, they’ve worked within the machine as opposed to actually create the machine,” Schott said.
I ask boards to score internal candidates on one thing before they glance outside the company: has this person built a system others can run, or have they only run someone else’s?
Build the leadership engine before the board asks for a name
Chris Rolls, CEO of TTC Global, treats succession as infrastructure, not a one-time event. “The coaching of them, mentoring. I tell the team, you don’t just need to build a leadership team, you need to build a leadership engine because you’re always having to replenish those leaders as you scale up the organization as well,” Rolls said.
Krishna describes the trait that engine is built to produce: self-actualized talent. “The best founders learn to adapt and grow themselves with the stage of a business. The constant open discussion with the founder is what skill sets would truly augment their superpowers so that they can be in this for the long haul, for the long run. So first and foremost, founders are self-actualized about their talent sets. And what incremental talent do they need to constantly bring on board is a really important trait,” Srinivasan said.
I tell CEOs the same thing: start mapping your team’s results back to the decisions behind them a year before any board asks you to. Board succession runs on that discipline quarter after quarter, long before anyone calls a vote.
FAQ
What percentage of boards don’t have a ready CEO successor?
Close to half, according to the board-side guests I’ve had on the podcast, including Jason. The shortage isn’t a talent problem. Glenn Gow sees the same root cause across nearly every case: no one on the internal bench was ever asked to explain the reasoning behind their results before the board needed an answer.
What is the most common mistake in succession planning?
Boards and CEOs measure the scoreboard instead of the decisions behind it. Jason built his evaluation process around five specific metrics: stock price, revenue, profit margin, customer NPS, and employee satisfaction. Glenn Gow tells CEOs the test is simple: pick any one of those five and explain, in one sentence, the decision that moved it.
Why do leaders not have a succession plan?
Most leaders postpone it because naming a successor feels like admitting they are replaceable. Andy faced this directly moving from operating Goya Foods to investing in other family companies, and he says the leaders who struggle most are the ones who never stop believing they alone are “syndicatable” to the business. Glenn Gow tells CEOs the discomfort of stepping back is a sign they are doing it right.
What are the 5 D’s of succession planning?
The classic framework covers death, disability, disqualification, departure, and divorce, the five events that most often force an unplanned leadership change. Glenn Gow flags a sixth risk boards underweight: a CEO who is technically present but has never taught anyone else the reasoning behind their decisions. Plan for that sixth risk with the same seriousness as the other five.
What are the major challenges faced in succession planning?
The biggest challenge is that boards default to comfort over competence. Roger calls out the sourcing-talent-vs-sourcing-friends problem: teams hire people they like instead of doing a deep dive into who actually fits the system. Glenn Gow tells boards that skipping that deep dive is what turns a comfortable hire into a costly one, whether the candidate came from inside the company or outside it.
How do I know if I’m ready to be a CEO succession candidate?
You are ready when you know your own weaknesses well enough to hire around them, and know your strengths well enough to double down on them. Jay Rosenzweig, CEO of Rosenzweig & Company Inc, argues that scaling an enterprise is impossible without shoring up your personal gaps with complementary teammates. Glenn Gow adds one more signal: you know this the moment you can name the specific person on your team who is nearly as good as you at your own job.
Should a board hire from inside or outside for CEO succession?
Insiders usually outperform external hires from bigger companies, because insiders already understand your specific machine. Krishna describes board members as answering to two masters, the company and their own fund’s LPs, which can push a board toward a familiar outside name under pressure. That tension is exactly what makes a board’s choice of successor so difficult, and Glenn Gow tells boards to weigh it explicitly before they default to a recognizable resume.
What do boards look for in culture fit during a CEO transition?
Boards look past the resume to the person’s fit with company norms. Shannon often repeats a line in her own hiring work: people get hired for what they know and fired for who they are. Glenn Gow tells CEOs to run their own top team through that cultural screen now, before a crisis forces the question.
How often should a CEO update the board on bad news?
Immediately, not at the next quarterly meeting. Colby treats board members as unofficial sounding boards he calls the moment something starts bothering him, rather than saving it for a scheduled update. Glenn Gow has seen the CEOs who wait the longest lose the most trust when the news finally surfaces.
What is a leadership engine, and do I need one?
A leadership engine is a standing system for developing internal successors, not a one-time hiring push. Chris runs his through structured coaching cohorts for next-generation leaders inside TTC Global. Glenn Gow recommends starting one the moment you promote your first VP, not the year before a board asks who is next.
Can a family business successfully pass leadership to someone outside the family?
Yes. Andy points to a specific milestone: the moment a family or founder-led business pushes decisions down to non-family managers and lets them own the outcome. He calls that a success, even though many founders instinctively read it as losing control. Glenn Gow tells family CEOs to expect that instinct and push through it anyway.
How long before a planned exit should a CEO tell the board?
At least twelve months, and ideally longer. Glenn Gow coaches CEOs to put a written timeline in front of the board the same month they start seriously considering an exit, not the month they sign paperwork. Waiting past that point is the same silence Shannon describes costing CEOs the board’s trust.
What You Do Next
Nearly half of boards face a transition with no one ready, but you do not have to be part of that half. Start mapping every major result your team produced this quarter back to the specific decision or workflow that caused it, the same discipline Jason Baumgarten and Fred Voccola describe boards actually testing for. If you want help building that discipline into your leadership team before a board ever asks for a name, schedule a working session with Glenn Gow and I will map out where your succession pipeline has the biggest gap.
