Succession Planning

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When Is an Outsider CEO a Good Choice?

On average, CEOs recruited from outside the company perform about the same as those who come up through the ranks, the authors’ research suggests. But there are certain circumstances in which outsider CEOs tend to do better: CEOs recruited from outside the company outperform those who come up through the ranks at companies with a recent history of poor performance.

The author studied CEO succession in 90 single-business organizations over 30 years in the U.S. airline and chemical industries.

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