Churn Should Be for Butter: Why Companies Keep Whipping Through New CEOs

“Poor CEO succession has destroyed many a company.”
– Jamie Dimon, JPMorgan Chase CEO

In the past twelve months alone, 22 companies in the S&P 1500 have replaced their CEOs. That’s just the tip of the iceberg. Behind those numbers lies a much bigger story of churn, mis-hires, and the enormous cost of getting succession wrong.

Leadership transitions are now one of the greatest risks to organizational stability. When the right person is in place, change can spark transformation. When the wrong one is chosen, momentum collapses, culture fractures, and shareholder confidence erodes.

So why do so many organizations, including those with world-class boards and HR teams, keep missing the mark?

The High Cost of Getting It Wrong

Replacing a CEO is never cheap. Studies suggest that the total cost of a failed CEO appointment, factoring in lost opportunities, severance, and disruption, can climb into the tens of millions. But the greater cost is harder to measure: the stalled strategies, the demoralized teams, the investors who begin looking elsewhere.

McKinsey has found that nearly half of new CEOs underperform in their first 18 months. That is not a statistic any board chair wants to explain to shareholders.

Why Succession Plans Fail

On paper, many companies believe they have a solid succession plan. They identify a few rising stars, groom them for advancement, and keep an emergency shortlist. Yet when the actual moment of transition arrives, those plans often fall apart.

The failures stem from several common mistakes:

1. Overconfidence in Internal Candidates. Boards often assume their best operators will become effective CEOs. But operational excellence is not the same as strategic vision.
2. Narrow Evaluation Lenses. Too much weight is placed on résumés and pedigree. Too little is placed on leadership character, cultural fit, and adaptability.
3. Reactive Timing. Succession is often triggered by crisis: illness, sudden resignation, or underperformance rather than proactive planning.
4. Board Dynamics. Politics and personal loyalties can cloud judgment, leading to “safe” choices instead of the right choices.

The result: leaders who fit the job description but not the moment.

The “Hit the Mark” Problem

The best leaders align with an organization’s trajectory. A company in turnaround needs resilience and clarity. A company in hypergrowth needs adaptability and bold vision. A company in transition needs diplomacy and cultural stewardship.

Too often, organizations choose leaders who look strong in the abstract, but are misaligned with the specific journey ahead. That’s how “qualified” leaders become failed leaders. They weren’t wrong in general, they were wrong for this time and this place.

How to Get Succession Right

The solution? A smarter, focused process that recognizes what’s really at stake.

1. Broaden the Search. Don’t assume the next leader is already in the building. External recruitment expands the horizon, surfaces candidates you would never find otherwise, and removes the blind spots of internal politics.
2. Define the Future, Not Just the Role. Ask: what will this company need to thrive in five years, not just what it needs to function today? Hire for trajectory, not just stability.
3. Evaluate Beyond the Résumé. Look for hidden traits: resilience, values in action, ability to inspire teams under pressure. These are the traits that separate steady operators from transformational leaders.
4. Scenario Testing and Deep Assessment. Put candidates in simulated challenges. Watch how they think, how they communicate, how they treat people, and how they prioritize. That’s where true leadership traits show themselves.
5. Independent Perspective. A trusted external partner can cut through bias with better evaluations and precision targeting to reduce the risk of a costly misstep.

A Lesson From the Headlines

We don’t need to look far to see the fallout of leadership misfires. The business press is filled with examples of companies that cycled through multiple CEOs in just a few years, each one brought in to fix the mistakes of the last. Each mis-hire eroded trust, made cultural recovery harder, and left the board explaining why their “succession plan” hadn’t worked. Let’s not even talk about tanking share prices. 

Contrast that with organizations that invested in precise, disciplined recruitment. Their transitions look seamless, their strategies move forward, their stakeholders remain confident. The difference is process.

What This Means for Today’s Boards and CHROs

If you’re sitting on a board, or leading the HR function of a major company, the question is not whether leadership change will come. The question is when and whether you’re truly prepared for it.

Leadership succession is obviously much too important to leave anything to chance. As someone once famously said, the best way to predict the future is to make it. That goes especially for preparing for your next successive leader.