The Ways CEO Succession-Planning Goes off the Rails

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Published on: August 27, 2025 at 4:42 pm

When a president or CEO is planning a move for any reason, the processes around succession planning and leadership transition can get dicey.

Academy of Management Scholar Donald Hambrick of Pennsylvania State University, who published an article in Academy of Management Review on this topic, said various things can go wrong between the time that a CEO considers retirement and before and after actually hiring his or her successor.

“One of them that doesn’t get talked about very much is where there’s nobody in the second level of executives who, by virtue of disposition or motivation, really has what it takes to be a CEO,” Hambrick said. “You would like to think that you’d pick the next person from that set, but sometimes there’s nobody in that set who’s equipped to do it.

“You don’t necessarily want to replace them just because they don’t look like they’re CEO material, because they’re often tremendous executives at what they do,” he said.

Intel found itself in exactly that situation. After the company’s board of directors announced CEO Pat Gelsinger’s retirement and revealed that he was stepping down from the board, it didn’t name a successor. Rather, it appointed two executives as interim co-CEOs to replace Gelsinger, who had spent his entire career at Intel lifer, but was CEO for only three years.

“Intel is still without a real CEO after [several] months, and a lot of it is because in their cast of characters at the second level, they had a bunch of great executives doing their thing, but nobody who was CEO stuff,” Hambrick said. “And so they’re trying to figure out what to do about that.

“I assume that they will eventually have to go to the external market and recruit an outsider, which, by the way, is not necessarily the end of the world,” he said. “Outsiders have a bad rap. They are high-risk, high-reward. They can be tremendous. They can be problematic.

“But I’ve done research on the performance of outsider CEOs, and they aren’t uniformly a bad story at all.”

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A sample of Hambrick’s AOM research findings:

Author

Daniel Butcher

Daniel Butcher is a writer and the Managing Editor of AOM Today at the Academy of Management (AOM). Previously, he was a writer and the Finance Editor for Strategic Finance magazine and Management Accounting Quarterly, a scholarly journal, at the Institute of Management Accountants (IMA). Prior to that, he worked as a writer/editor at The Financial Times, including daily FT sister publications Ignites and FundFire, as well as Crain Communications’s InvestmentNews and Crain’s Wealth, eFinancialCareers, and Arizent’s Financial Planning, Re:Invent|Wealth, On Wall Street, Bank Investment Consultant, and Money Management Executive. He earned his bachelor’s degree from the University of Colorado Boulder and his master’s degree from New York University. You can reach him at [email protected] or via LinkedIn.

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