The General Line

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Russian companies haven’t yet learned how to develop leaders, select effective CEOs and create the conditions necessary for their smooth adaptation. This is the conclusion that Ward Howell Talent Equity Institute project manager Veronika Zagieva and Ward Howell analyst Alexandra Matveeva have come to based on their research on succession in major Russian organizations.

Source: HBR-Russia

Replacing a CEO is one of the most difficult processes for a company, and how this process occurs on the Russian market has been little studied. In 2014, the Talent Equity Institute (the research arm of Ward Howell, which specializes in the development of leadership capital) conducted the first major study on CEO succession in the country, covering 160 major Russian companies over the previous decade, from 2003 to 2014. The results confirmed our hypothesis: The transfer of power in Russian companies has its own unique characteristics that differ from those of European or American companies.

  • Russian companies promote internal candidates to the CEO position far less often than Western companies;
  • The tenure of Russian CEOs is less than half that of their Western colleagues;
  • How much the shareholders trust a candidate plays a bigger role than his management experience and knowledge of the company;
  • One fourth of Russian CEOs have work experience in the government;
  • A market for major CEOs in Russia is practically nonexistent. Once someone has served as a leader of a major company, it is difficult to find a comparable role after that.

That said, effective Russian and Western CEOs have a lot in common. The most effective CEOs tend to be younger than the average, have worked in their respective industries for longer and joined their companies before being appointed CEO. Finally, they less frequently change employers and careers.

*The HBR-Russia license agreement does not allow for the full version of this publication to be placed on our site.

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