Wharton Aerospace & Defense Report

The Challenge Of Succeeding A Successful Chief ExecutiveDecember 03, 2009

General Dynamics' longtime CEO, Nicholas Chabraja, recently and turned over leadership to Jay L. Johnson, a seasoned veteran himself. Nonetheless, analysts say Johnson has "big shoes to fill," a common problem when taking over for a popular and successful chief executive.

When Chabraja took over the giant defense contractor 12 years ago, the company had sales of $4 billion, 29,000 employees and two focused businesses. One made tanks and the other nuclear submarines, according to an article in The Washington Post.

Chabraja grew the Falls Church, VA-based company to almost $30 billion in sales in 2008 and about 93,000 employees in businesses as far-flung as building Navy ships, armored vehicles, and business jets to managing cyber-security information technology for the Pentagon. He did all this while meeting or beating Wall Street expectations consistently, year-after-year, according to the article.

Chabraja was known to run the company at a strategic level and monitor operations from a distance, according to the Post. He got involved in a business only if he thought there as a brewing problem.

"He's like the Jack Welch of the defense industry," Cai von Rumohr, an investment analyst with Cowen and Co. in Boston, told the Post. "It's going to be a big transition. [Johnson] has not been as visible. He's a bit of an unknown."

Wharton management professor Adam M. Grant, who has closely studied transitions when a relatively unknown executive replaces a well-respected and successful chief executive, noted that research suggests several key steps for effective succession.

New leaders stand to benefit from highlighting how their own values exemplify those of the organization. "This is because employees are more likely to identify with leaders who hold similar values and are viewed as representing their organization’s most central, distinctive, and enduring principles," said Grant.

But at the same time, it is critical for new leaders to differentiate themselves from those they are succeeding. "This prevents them from living in former leaders’ shadows, enabling them to carve out a unique identity, role and contribution," he said. Establishing both similarity and uniqueness can allow leaders to achieve what the prominent American social psychologist Marilynn Brewer calls "optimal distinctiveness," striking a balance between fitting in and standing out.

Grant also noted that it is critical for new leaders to articulate a compelling vision for the organization’s future that will resonate with key stakeholders, such as employees, managers, customers and shareholders.