The promotion paradox

Consider an exceptional sales director. They know the market, understand customers, make decisions quickly and have a reputation for getting things done. They have spent years being rewarded for their energy, commercial instinct and willingness to intervene when something is not working.

Now give them responsibility for the whole enterprise.

Suddenly, being the person with all the answers is not necessarily helpful. The CEO needs to create an organisation in which other people can make good decisions. They need to think beyond sales and balance competing priorities across finance, operations, people, and strategy. They need to allocate resources, manage stakeholders and decide which problems are worth solving.

The job has changed. The behaviours that made the person successful may not.

This is the promotion paradox: people are often promoted because of proven strengths, while the new role may require them to use those strengths differently.

Research by McKinsey into the transition from functional leadership to the CEO role illustrates the challenge. In its analysis of 599 CEOs, fewer than 15 percent had reached the top job after serving primarily in a functional role such as CFO, CMO, CTO or general counsel. The research also found that functional leaders moving into the CEO role often need to broaden their experience beyond their original discipline, developing the general-management perspective and decision-making instincts required at enterprise level.¹

The lesson is not that functional leaders cannot make excellent CEOs. But the transition demands something more than functional excellence.

The behavioural shift becomes clearer when you look at what changes. A functional expert is rewarded for optimising their function. An enterprise leader must optimise the organisation.

That sounds like a semantic distinction until the two objectives conflict. The best answer for finance may not be great for the business. The best answer for marketing may not be right for operations. The CEO must decide which trade-offs create the greatest value for the organisation.

There is another shift, from having answers to asking better questions.

Senior executives are often promoted because they know their subject exceptionally well. But CEOs need to know which questions the organisation needs to answer, which assumptions deserve to be challenged, and which issues do not deserve management attention at all.

That requires a different kind of intelligence.

There is also a shift from personal performance to creating performance through others. High performers often succeed through their own expertise, energy and execution. At enterprise level, that model no longer scales. The CEO cannot personally solve every problem, review every decision or rescue every underperforming function.

Their job becomes creating the conditions in which other people can perform.

Perhaps the biggest shift is from solving problems to deciding which problems matter. A functional leader can spend a career becoming better at solving problems. A CEO must decide which problems deserve attention in the first place.

That is judgement.

And judgement is considerably harder to demonstrate on a CV than experience.

This creates an interesting paradox in succession planning.

The person who looks most ready for the next role may still need to adjust some of the behaviours that have served them exceptionally well to date.

The brilliant operator learning when to step back from operating.

The world-class salesperson broadening the lens beyond commercial considerations.

The accomplished finance leader balancing financial rigour with a wider set of enterprise considerations.

The excellent strategist recognising when analysis has done its job and a decision is required.

None of these is a criticism of the executive. They are examples of the natural adjustments that broader leadership responsibility can require, and an important consideration in succession planning.

There is also an international dimension.

The broad shift from functional expertise to enterprise leadership is universal. But the way that shift needs to be expressed may vary according to the organisation, ownership structure, and cultural environment.

A CEO in a family-owned business may have a different relationship with ownership and authority from an executive running a publicly listed multinational. A leader in a highly hierarchical culture may be expected to exercise authority differently from one working in an egalitarian environment. Expectations around consultation, delegation, and challenge can also vary across markets.

That means there is a danger in defining the "ideal CEO" too precisely.

The better question is not simply whether someone possesses a universal list of leadership qualities. It is whether their behaviour is appropriate to the organisation they are being asked to lead.

One of the more subtle succession questions arises when someone has been exceptionally successful in their current role. The board then needs to consider not only whether those strengths will transfer, but how they may need to evolve.

When assessing an internal successor, therefore, the obvious question is: can this person do the next job?

A complementary question is: what might this person need to do differently to succeed in the broader role?

How will a CFO broaden an already strong financial lens into an enterprise-wide one?

How will a commercial leader balance growth with the wider interests of the organisation?

How will an operations leader create space for others to exercise judgement?

How will a high performer increasingly create performance through others?

These are behavioural questions.