The classic succession “horse race” pits two or three senior executives against each other in a battle over performance — the winner becoming the next chief executive officer.
Some executives and governance observers are uncomfortable with the horse race approach — which we define as an overt competition for the CEO role among several recognized candidates within an established time frame — out of concern about the potential impact that such a high stakes contest may have on an organization. Nevertheless, the horse race undeniably has been successful in helping many admired companies choose their next leader. Horse races at giants such as General Electric, Procter & Gamble, GlaxoSmithKline and Abbott Laboratories have produced a series of exceptional leaders.
Those who favor the horse race say that it is more than an effective method for choosing the most qualified leader from among several skilled executives. It can bring a variety of other benefits to the organization as well. First and foremost, companies employing the horse race signal an expectation that executives and employees will be held accountable for the company’s performance. When it is done right, such a system establishes a culture of leadership development in which future stars are spotted early and groomed in a succession of critical roles through which they attain the competencies and seasoning needed to lead a company.
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