The Book Corner - Review

The CEO Within by Joseph L. Bower

The CEO Within: How Inside Outsiders Are the Key to Succession Planning

By Joseph L. Bower
HBS Press, 2007

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This book is about CEO succession– how it works and how it can be more effective. Succession management, or human capital development as it has come to be known, is clearly an increasingly important subject of investigation. Several books, including my own, Growing Your Company’s Leaders (with J. Conger), have developed the broad challenge of developing leaders throughout the organization. Bower’s focus is on the very top of the pyramid and suggests that the “right” leader for an organization, like Jack Welch, can create $150 billion of market value while the wrong ones can cause the company to lose their place in the market.

Bower reports that most companies (more than 60 percent) do not have a process for CEO succession. This is surprising in that other research suggests that about half of major companies have detailed succession planning efforts throughout the organization and “best practice” firms almost always have a detailed process in place. Bower is not clear about the breadth of his sample, since he includes a number of references to privately owned companies, his number may be valid. Clearly, the job of selecting successful CEOs is one that many firms do poorly.

The key to successful CEO succession, according to Bauer, is developing what he calls “inside-outsiders.” These leaders view the world through the lens of an objective outsider without the constraints or emotional baggage that comes from a long tenure in the heart of an organization. However, these leaders must have the knowledge and power base of an insider and should be able to leverage their experience with the firm’s employees, suppliers, and customers while building on their own experience in creating a future for the firm. This is good advice that is well-developed in the book. Bower describes the attributes of the” inside-outsider” and suggests ways to recruit, nurture, and promote this special type of leader. I wish that the author had given credit to two Harvard Business School colleagues, John Kotter and Jim Haskett, who developed similar insights in their 1992 book, Corporate Culture and Performance.

Bower is the Donald Kirk David professor of business at the Harvard Business School and has taught there for more than 40 years. He has served on numerous boards and has been involved in nine CEO successions. Bower’s experience and board level access are clearly important aspects of this book. He has written a number of important HBS cases, which he references extensively and effectively throughout the book. In fact, the author is somewhat like George Bernard Shaw who once said, “I like to quote myself because it adds spice to a conversation.” Bower cites 18 of his own publications in the endnotes.

The CEO Within is pragmatic and useful and an easy read. Bower successfully makes the case that “inside-outsiders” are the key to CEO succession planning.

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Operations Management
CEO Performance
Ethics / Corporate Social Responsibility