The CEO of WJH Company announced his retirement to his board one year in advance. The board decided to start the search immediately and chose an executive search firm to help them through the process. In the meantime, the CEO informed his executives and employees that he would be retiring within the year. He let his executives know that if any of them were interested in the position they should let the search firm know. Four of his executives stated that they would be interested in pursuing the CEO position. So, as the search continued, the search firm vetted the internal candidates and also found some external candidates.
The board ended up interviewing all four of the internal candidates and five external candidates. After the interview they reviewed each candidate and selected two internal and two external individuals to move on to the next round of interviews.
This is where this story becomes interesting! One internal executive that was selected to move onto the next round of interviews went to the CEO with a question. He explained that he had received an offer from another company for the same position that he is in now but for more money and benefits. He was wondering if the board would still interview him even if he took the new position with the other company. The CEO was shocked, and told the executive that he didn’t want to lose him, so he would think about it and get back to him.
In the meantime, the internal candidate also called the board chair to explain his situation and ask the same question. The internal candidate explained that the other company wanted him to start in four weeks, and they were interviewing in five weeks – would they still consider him even if he took the other position? The board chair, similar to the CEO, was shocked and called an emergency board meeting.
At the board meeting the board chair explained the situation and all of the board members were extremely confused. After they talked about it, some of the board members exclaimed, “what just happened??”.
Issues in this Story
While this situation may not be exactly common, there are some good lessons to learn in this story. So what issues do you hear in this story?
- Was the internal candidate really interested in the CEO role or was he just looking for more money?
- Should the board still interview this individual even if he is leaving their company?
- Should the CEO have done anything he could to keep that person at the organization?
- Is it fair to give that person more compensation just because he threatened to leave? You have to think about is it fair to all of the employees, and is it fair to the other executives who applied for the position with him?
What You Can Do
Hopefully you never find yourself in a similar situation, but here’s what you can do if you do.
- Make sure you’re clear with your internal candidates about the expectations of the CEO role and the timeline for the CEO search.
- Make sure you are being as fair as you possibly can. Especially fair when compared to the other executives who have raised their hand for the search.
- Make sure you know how motivated your internal candidates are to fill the role. In this situation was he really interested in becoming the CEO or did he just want more money?