Inc. Magazine
The race to find future CEOs is stalling as leadership pipelines collapse. Companies are slashing middle management, delaying succession plans, and losing potential leaders. Burnout, shifting workplace values, Gen-Z’s resistance to traditional career ladders, and the rise of AI are all reshaping—and shrinking—the path to the top.
The CEO Pipeline Is Running Dry. Here’s Why
Author: Kit Eaton
CEO succession planning is a complex, layered process for any business. It necessitates careful planning, timing, and a little luck to find the right person, at the right price, with the right mindset to lead an existing company into a new future. Some companies look to home-grown leaders who’ve been steeped in company culture for years, while others seek external candidates who’ll be a new broom, bringing sweeping changes to organizations in need of a fresh approach. But according to a report in Business Insider, the traditional leadership pipelines in many organizations have collapsed—making the problem of finding new CEOs much harder.
The report quotes Shawn Cole, president and founding partner at executive search and consulting firm Cowen Partners (which describes itself as having clients including “both small and large, publicly traded, private, and non-profit organizations”), who pointed out that “the middle-management, VP-level successors are just gutted right now.” This is in part deliberate, Cole said, as companies are reevaluating their management structures: Amazon grabbed headlines recently when it announced it was going to dramatically cut its middle management ranks, for example.
But this process is disrupting the line of potential CEO candidates inside companies—not least because some businesses aren’t investing in developing their next generation of leaders. In other cases, company CEOs are simply holding on too long, Cole said, which means that “what would have been your successor has now left the company.” Other cultural changes in the workplace mean that staff who would previously have viewed their job as a long-term career, with aspirations of continual promotions, aren’t sticking around for the long term. Gen-Z in particular is in the spotlight for its shunning of traditional workplace norms, including the 9-to-5 grind—which means this disruption to CEO succession planning isn’t going to go away soon.
Separately, CEO burnout may be much more of an issue than it was in the past. In early 2024, research showed that most CEOs face exhaustion, burnout, and even early death. Which doesn’t do much to promote the attractions of being a company chief.
The impact of AI on the workplace is another variable making the succession process unpredictable. Reports say that companies are skipping over hiring recent graduates in favor of using AI systems. This shift could perpetuate short-term career thinking among young people, and possibly make traditional CEO development and succession processes more difficult in the future. Meanwhile, AI proponents have wondered if AIs will soon be sophisticated enough to actually act as CEOs all by themselves: Website builder HeyBoss just promoted its Astra agent AI system in exactly this way.
The report arrives against a backdrop of several high-level CEO succession stories. Berkshire Hathaway CEO Warren Buffett is perhaps the most prominent example. At the start of May, Buffett announced that he’d be stepping down from his role at the end of the year after decades in control, earning praise for the clever timing he used to announce the news, and for the fact he’d clearly identified his successor, Greg Abel, years ago—giving plenty of time for the change to sink in with shareholders.
JPMorgan CEO Jamie Dimon also spoke on the topic of succession at a recent investor day. Though he refused to name names, he admitted the company’s board was thinking about who’d replace him. Apple CEO Tim Cook also spoke about succession in December, saying in an interview he’d “do [the job] until the voice in my head says, ‘It’s time.’ ” What’s interesting about all these leaders is their age: Buffett is 94, Dimon is 69, and Cook is 64.
If Business Insider’s report is right, these leaders may represent something of a last gasp of the traditional CEO development chain—they’ve been in command through an era of significant workplace change. It might be hard to picture Gen-Z workers, known for embracing the idea of “unbossing,” or shunning management role promotions, envisioning themselves taking on CEO roles in several decades.
Credits: TCA, LLC.