Curing sick businesses: changing CEOS in turnaround efforts

Executive Overview Many argue that the surest route to business turnaround involves CEO replacement, yet little guidance is available for deciding exactly when CEOs should be replaced and who should succeed them. This article offers suggestions for decision makers (i.e., board members and corporate executives) who must deal with a business's continuing poor performance by determining whether the current CEO or a replacement should lead a turnaround effort. First. CEO change should be cost-justified. Next, decision makers must determine whether the business is having difficulty adapting to the niche, market, or economy level of its surrounding environment. Finally, a new CEO possessing appropriate predispositions and skills should be selected, with (a) type of adaptation difficulty and (b) severity of problems guiding this selection decision.