Recognizing a Bad CEO
Gilbert Mlongoti Sinjani, Member
This is a great question. My question to you is: what role is (s)he coming to perform?
Transformational (leading change) or transactional (business as usual)?
Irrespective, you can consider the values of both the incoming CEO and those of the firm
(value dynamics). Remember that a firm takes on (to a great extent) the values of its CEO, which form the firm's values and culture. Values (from cultures and beliefs) drive behaviour which drives performance.
The values of the CEO can be determined from past performance (consider the culture created in the firm, business unit, or department (s)he is coming from) versus the firm (s)he is coming to. If there is a close relationship then (s)he is likely to perform well in a transactional setting, otherwise (s)he will perform well in transforming the firm.
The board should determine this before selecting a CEO whether from within or without of the firm.