The variation among companies from different regions choosing the apprenticeship model is noteworthy. In Japan, in keeping with the country’s tight-knit ways, and where 80 percent of turnover events in 2012 were planned, 69 percent of new CEOs saw their predecessor stay on as chairman. By comparison, just 15 percent of new CEOs at companies in Europe were mentored by the previous CEO.
By the same token, the percentage of companies appointing their new leader as both chairman and chief executive stood as high as 48 percent 10 years ago. Since then, however, the proportion has declined significantly, leveling off at around 12 percent since 2009. As we have observed in past studies, the willingness to concentrate power at the top appears to be more prevalent in North America. Fully 20 percent of new CEOs at companies in North America were also appointed chairman in 2012, a significantly higher proportion than in any other region. In Japan, by contrast, no new CEO also held the chairmanship.
How Leaders Lead
Despite their widely varying backgrounds, nationalities, and career paths, virtually all new chief executives we have spoken to over the years agree on one thing: This job is different from all other executive posts. The sense of responsibility increases by an order of magnitude, and the decisions carry much more weight. Preparation is key, but not every new CEO is given that luxury. In any case, whether or not the succession is planned, the new CEOs must lead—moving quickly to gather together the best team possible, making clear to all stakeholders his or her vision for the company’s future, and serving as a model for how he or she expects everyone to behave.
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- Ken Favaro is a senior partner with Booz & Company based in New York. He leads the firm’s work in enterprise strategy and finance.
- Per-Ola Karlsson is a senior partner with Booz & Company based in Stockholm. He serves clients across Europe and the Middle East on issues related to organization, change, and leadership.
- Gary L. Neilson is a senior partner with Booz & Company based in Chicago. He focuses on operating models and organizational transformation.
- Also contributing to this article were Booz & Company senior manager Josselyn Simpson and specialist Jane Kim, and s+b contributing editor Edward H. Baker.