We share with you a post published in ‘Business Revie’ in which you can learn more about Claudio Fernández-Aráoz:
“In our opinion large companies’ excessive tendency to hire leaders from outside is one of the biggest problems with succession practices. This propensity incurs three major kinds of costs: underperformance at companies that hire ill-suited external CEOs, the loss of intellectual capital in the C-suites of the organizations that executives leave behind, and for those companies promoting from within, the lower performance of ill-prepared successors.
A landmark study that Rakesh Khurana and Nitin Nohria of Harvard Business School conducted years ago sheds light on the first kind of cost. Khurana and Nohria examined the impact that different types of CEO succession had on operating returns in 200 organizations over a 15-year period. They compared four scenarios: (1) an insider promoted in a firm doing reasonably well; (2) an insider promoted in a firm doing poorly; (3) an outsider hired in a firm doing reasonably well; and (4) an outsider hired in a firm doing poorly. (…)”