Hajir Hajji started a quarter of a century ago as a stock filler on the shop floor of an Action branch in Amsterdam-Noord. Step by step she crawled up and got to know the company in all its layers. Since January 1 of this year, she has been CEO of the cheap stuff chain, which has since grown into a giant with 1,900 branches in Europe.
In the past, top people usually came from their own breeding. In the 21st century, people are quickly looking for successors, especially when things go wrong in a group, under the motto new brooms sweep clean. Fortunately, Philips has not gone that far. Frans van Houten will be succeeded by someone from his own company, although Roy Jakobs also worked for Shell and Reed Elsevier in the past. It is a tradition in Philips history that top people are recruited into their own company. Only exception was Cor – Let’s make things better –’Boonstra who started the major dismantling of the conglomerate from 1996 to 2001.
The idea is that a CEO without a past in the company is not set in stone and can provide new input. He or she is open-minded, has no prejudices and, above all, does not suffer from what organizational memory is called. By the latter is meant that a new man or woman does not hold on to old patterns because it ‘has always been like this’.
That’s why companies increasingly resemble football clubs that change trainers with every setback. It doesn’t help much, as is now apparent with Manchester United who has lost seven coaches after Alex Ferguson was at the helm for 27 years. Due to major cultural differences, external CEOs are less successful than internal CEOs, according to a study by the universities of Zurich and Milan and the Frankfurt School of Finance & Management.
It compared the performance of 1,275 new CEOs of 882 large companies over a period of 13 years. Financial data was supplemented with employee survey data. The conclusion was that outside CEOs often stumble due to a lack of feeling for internal networks and the balance of power in a company. This often degenerates into a power struggle. CEOs who are new to a company often suffer from an exaggerated urge to control, which leads to a negative spiral of increasing opposition and the further crumbling of authority. During crises in particular, the failure probability of an ‘external’ CEO is greater than that of an ‘internal’ CEO, the study shows. The conclusion has been confirmed by Australian research based on data on more than five thousand company results. Internal CEOs – especially during the corona crisis – performed better than their external colleagues. They were better able to implement necessary changes with limited resources.
In 2010, American consultant Jim Collins concluded in his bestseller Good to Great, Why some companies leap forward… and others don’t that companies with own-grown CEOs outperformed companies with CEOs brought in from outside.
Philips has looked to Action instead of Manchester United.