February 9, 2025
Volatility is the baseline: Why CEO turnover is rising and how boards must rethink succession planning
Dan Russell, Senior Partner, Global Head of Assessment at RHR International
CEO turnover is rising, bringing chaos for organizations that do not thoughtfully invest in their leadership strategies. CEO departures have increased over the past couple of years due to a number of factors: retiring baby boomers ushering in generational shifts; added pressure within the financial, retail, and entertainment sectors; and complexities and rapidly shifting economic, technological, and political landscapes. At the same time, expectations of the role have changed; people now desire shorter tenures and greater work-life balance.
Cultivating a healthy pipeline of CEO and senior executive talent can take a decade. Without proper planning and investment, CEO succession can throw a company into crisis mode. Consequently, proactive CEO succession plans have grown significantly more important on the corporate priority list to ensure smooth transitions.
- Volatility is the new normal, and the upcoming leaders have been baking in it
Today’s CEOs and senior leaders are operating under unprecedented pressure. Boards expect transparency, candor and a learning orientation for incoming leaders, along with the ability to cut through noise and focus on what actually matters to the organization’s continued growth. Simultaneously, as volatility continues to rise, decision-making cycles are shorter and public visibility into leadership actions has never been greater and more accessible. The combination of these factors results in intense pressure that’s felt most acutely across the retail, entertainment and financial services sectors.
In response to this pressure, leaders are searching for better ways to make decisions and execute faster, taking advantage of the rate at which technology is advancing. Some are heavily investing time and money to incorporate AI into their processes, but the most thoughtful leaders are taking their time experimenting with AI to evaluate where it’s most valuable. Even as organizations become more adept at leveraging this technology in their decision-making processes, they also must become more confident using their intuition. The staggering pace and truly unprecedented decisions they are being asked to make further fuel their appetite to lean on external tools to take measured, thoughtful risks.
For emerging CEOs and senior leaders, this volatility is not an interruption of stability, but a baseline from which they operate.
- Why succession planning is evergreen and what boards must unlearn
Many CEOs are stepping away earlier, emphasizing the point that succession planning must be a long-term, continuous process rather than be treated as a simple handoff.
Still, many boards remain loyal to outdated assumptions about what CEO readiness looks like. For example, succession discussions of the past revolve around a single “heir apparent” or default to candidates that resemble (or directly contrast) the sitting CEO. The actual key is shifting the focus from who to what. State-of-the-art succession planning starts with defining what the next CEO needs to accomplish within the future-facing context of the organization, rather than mirroring the past.
The charismatic visionary CEO of the 2010s with disruptive ideas has become a moment of the past, but it still has influenced the next era of leadership and made room for a new set of expectations for the role. The CEOs of today and the future must continue to make good decisions and galvanize people around a shared agenda that focuses on maintaining agility and resilience, all while continuing to operate under extreme pressure. They are incredibly purpose-driven problem solvers with a greater focus on scanning the external landscape, recognizing the implications of market trends and embracing the need to continually evolve and innovate. These leaders foster multidisciplinary approaches to opportunities across their organizations, balanced with cultivating their individual resilience and the resilience of those around them. The importance of these components will become more vital in the future and set a higher bar.
While elite academic credentials remain a common thread among top leadership, today’s CEO candidates reflect a notable shift toward functional and geographic diversity. In RHR’s work with companies of all sizes around the world, boards are increasingly looking beyond traditional Ivy League pipelines, prioritizing operational readiness and specialized experience over prestige alone. In a volatile market, a candidate’s track record of navigating disruption has become as critical a differentiator as their pedigree.
- Coaching for uncertainty through the leadership transition and beyond
The most common mistake organizations make in the transition process is waiting for a crisis to occur. In reality, effective CEO transitions begin the moment a new CEO is named, and remain an intentional and ongoing process to ensure leadership continuity is not left to chance in a world where mayhem is the baseline.
Collaboration is key; great CEOs and boards partner closely with their CHROs to create and execute evergreen processes for all critical leadership positions. It begins by identifying the type of leadership required for the future based on the specific needs of the company and assessing candidates against that profile while providing development support and feedback to help them grow into the role while still in their current one. From ongoing talent reviews and leadership assessment to career pathing, the best prepared organizations are those that treat succession planning as a continuous cycle. Steady leadership investment allows companies to respond when disruption occurs, such as an unplanned vacancy or an unexpected opportunity that requires strong leadership.
As my colleague Deb Rubin says, relying on a future CEO to simply “emerge” from the organization is like riding on the highway in a go-kart. You might make it, but the odds are against you.
Despite preparing to exit, outgoing CEOs still have a critical role in this process. When engaged productively, they help build leadership by focusing on strengthening the organization rather than preserving an individual legacy and casting a shadow over the transition. The legacy of founders and board members does not lie solely within their own performance; it relies on the readiness of the person who takes your seat. Preparation is a combination of ambition, education and situational context.
About the Author
Dan Russell is a senior partner and head of Assessment at RHR. In this role, he combines deep psychological expertise with commercial acumen to design and scale executive succession programs. Dan has advised Fortune 100 companies across industries in North America, Southeast Asia, Australia, and Europe. His expertise spans leadership assessment, succession planning, talent strategy, and advanced people analytics, including predictive modeling and machine learning.
Prior to RHR, he had senior roles with global firms including Deloitte and Aon. Dan holds a master’s degree in industrial and organizational psychology from Virginia Tech and a bachelor’s degree in psychology from Austin Peay State University. He is a Chartered Coaching Psychologist and Associate Fellow of the British Psychological Society, an active member of the Society for Industrial and Organizational Psychology over some 30 years, and a Professional Certified Coach with the International Coaching Federation.
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