Leader's Playbook

4 days ago
4 min read

April 2026

In This Edition | Leader’s Playbook: Choosing the CEO: Why It Goes Wrong

and How to Get It Right

Jay Redman — Choosing the CEO:Why It Goes Wrong and How to get it right

Jay Redman Senior Consultant

Guttman Development Strategies

Key Insights:

• Ensure the hiring profile incorporates the key

behavioral requirements needed for success

within the organization’s culture

• Use behavior-based interviewing techniques

that accurately uncover competence

• Incorporate assessment tools that are

valid predictors of success on the job and

measure the interpersonal behaviors and

‘soft skills’ required

Selecting a new CEO is a momentous event in any organization’s life. It’s also something of a high-wire act.

Make a misstep by selecting the wrong candidate, and the consequences can threaten an organization’s strategic health and vitality for years to come. Yet, as momentous a decision asCEO selection is, the failure rate is surprisingly high: anywhere from 40% to 70% of new CEOs fail within 18 to 24 months.

A multibillion-dollar retail giant in the Northeast sought to replace its CEO, who announced his retirement after 30 years. Not an easy decision! First, there were strong viewpoints on the subject from the board of directors, the current CEO, the senior team, key players in the company’s upper ranks, and even customers.

In addition, several members of the senior team were potential successors. Third, the top team was a strong, horizontal, high- performance team. It operated as a mini board of directors, with members functioning more as owners than as functional leaders. Trust and relationships were strong on the team, and it employed a put-it-on-the- table approach to resolving issues, managing conflicts, making decisions, and providing feedback. Good luck finding the

right fit to lead this hard-charging, cohesive team of owners! Fourth, the industry was rapidly changing, and the CEO and board knew that what had gotten them here wouldn’t take them here. Finally, replacing a top leader with a 30-year track record of success was no easy task.

Not wanting to slip from the high wire, the CEO and board retained an outside search firm to guide them. Unfortunately,

there was an issue. It seemed the firm favored outside candidates, and, frustrated, the CEO reached out to GDS

to help. One of his key requests was to ensure that both internal and external candidates were given equal and fair

consideration for the role.

We also partnered with the search firm to add behavioral and cultural factors to the role profile that the search firm

had created. Like many others we have seen, the search firm’s profile focused on the functional and technical aspects

of the position, rather than on qualities such as cultural fit, interpersonal skills, values, and key leadership behaviors. These are the most common causes of new CEO failure in the first two years. It is rarely due to deficient functional or technical skills.

Avoiding the One-dimensional Selection Trap

To avoid this one-dimensional selection trap, it’s essential to pay careful attention to patterns of interaction and pinpoint the “soft skills” required for success. In the case of the retail giant, the CEO would need to be adept at influencing others--especially important for interaction with the board of directors and the tenured team already in place --and at

trust and relationship building, collaboration, conflict management, assertion, giving and receiving feedback, sharing decision-making, and leading change--all essential qualities given the leadership team’s high- performance culture and ways of working.

To accurately assess these “soft skills,” they must be grounded in specific behaviors. And to do so, we developed a set of behavior- based interview questions to probe candidates. A useful technique for launching these questions is to ask candidates how they previously handled a situation that required the relevant skills and then ask: What did they do to resolve it? Why did they handle it that way? Were there any other ways they could have handled it? What did they learn from that experience? As you descend each rung of our questioning ladder, you gain greater insight into the candidate’s values, assessment and decision-making capabilities, and behaviors.

To ensure a more objective selection process, we also provided and administered validated assessment tools that

measure an individual’s values, key competencies and behaviors needed for success, along with the “derailers” that can undermine an individual under pressure or stress.

In the case of the retail organization, because it approached the selection challenge with a more nuanced approach, one that went beyond technical and functional skills to address the interpersonal competencies, the torch was successfully passed to a new CEO. He was successfully onboarded and, after two years at the helm, has become a significant contributor to his organization’s success.

Selecting a new CEO might not be rocket science. But it might be as difficult. Stay focused on a candidate’s technical, functional, and interpersonal skills, and you’ll likely cross the CEO selection high wire successfully and make it safely to the other side.