This story really happened:
A mid-sized company is in trouble. The investor knows better and decides to hire a somewhat controversial rock-star CEO from his own network. This CEO had led a large corporation very successfully during Germany’s boom years.
Shortly after taking over, the new CEO realises that the company is in far worse shape than anyone assumed. Market, technology, customers, competition: there are problems everywhere.
He does what we all do: he trusts his instincts. He brings in old colleagues. He hammers away at lean production and costs. He knows a lot about mass production, but little about make-to-order manufacturing.
What he misses is that the processes don’t work. He launches a huge number of initiatives, but he’s pressing buttons that aren’t connected to anything. A year later, the company files for insolvency.
“Failing up” is a term from organisational psychology. It describes how candidates with strong networks or a charismatic presence are often protected or recommended despite poor performance.
And don’t think search consultants are immune to this attribution error!
What people from large corporations are often accused of:
No consequences for failure. Mistakes aren’t systematically recorded or sanctioned. Instead, underperformers are moved to other departments or roles where their incompetence is less visible.
Self-promotion without real added value. Candidates who blame their failures on external circumstances. Quote: “The project failed because of the circumstances.”
Systemic distortions. Visible traits such as self-confidence or extroversion are mistaken for competence, even when performance is lacking. That favours narcissists and “difficult” personalities who are particularly good at selling themselves.
How do you deal with it?
I don’t believe in a general mistrust of people from large corporations. I’ve seen impressive careers in private equity and in mid-sized companies from candidates with a corporate background.
Which three criteria are non-negotiable in critical phases?
- Fit with the context and evidence of real impact, ahead of a formal track record
- Proven crisis experience: does the person have hands-on crisis skills? Can they do what’s needed themselves?
- References from periods of stress, not from the growth years
On top of that, you need a measurable 100-day agenda during the probation period, and then, if necessary, the courage to part ways.
Would you trust a former corporate CEO with your restructuring mandate, and why?
