Always Calibrating and Thinking Ahead: Designing Dynamic, Future- Oriented CEO Succession Planning

This is what a sitting CEO recently said to us as we talked with him about leading in the present environment. Clearly, the challenges leading as a CEO today are massive. The question boards face is how to adjust their succession process to prepare potential CEOs to meet this augmenting reality and lead through the future. 

To discuss this, one of our managing partners and a CEO succession expert, Gabi Carvalho, sat down with the former Chief People Officer of Mastercard, Michael Fraccaro who has recently joined Egon Zehnder as a Senior Advisor. The two know each other well and have worked together on several projects, including the succession of Mastercard’s former CEO, Ajay Banga to the current CEO, Michael Meibach. Their conversation sheds light on the pressing challenges of CEO succession, punctuated by their learning and observations as to what could improve succession processes and produce more future-oriented outcomes. 

Michael: Well, it’s great to be here and wonderful to have been in partnership with you for so many years. The old CEO development model was built on a predictable architecture — P&L leadership, major business unit ownership, geographic rotation, maybe a stint as CFO or COO — and it produced a fairly static CEO specification anchored in strategic vision and financial acumen. That model is no longer fit for purpose.

What has changed is both the external environment and the internal pipeline. Externally, the pace of technological and geopolitical disruption has compressed the time CEOs have to demonstrate results. The 24-hour news cycle means every decision is scrutinized in real time. Activist investors have shortened board patience. Internally, years of restructuring have hollowed out the development pipeline — there simply hasn’t been sustained investment in growing the next generation.

At its core, much of the turnover we're seeing points to a preparedness gap — and at the center of that gap is often a specification problem. Too many boards are still assessing candidates against criteria built for a more stable, more predictable version of the CEO role. That's not a criticism; it's a structural risk that's easy to miss when the business is performing and the incumbent is strong. At Mastercard, we worked hard to avoid that trap by treating succession not as an event but as a continuously running system — one that kept forcing the question: is this candidate ready for the world we're moving into, not just the one we're in today?

Michael: The organizations winning in this space have moved beyond thinking about leadership development as only programs. The best ones are integrating those programs into a broader experience architecture — one that's deliberately designed around how leaders actually grow.

That means engineering crucible moments alongside the formal development work — stretch assignments that are genuinely uncomfortable, not safe career moves. Turnaround stewardship. New market entry. Regulated-industry exposure. Public policy engagement. These test whether a leader can anticipate trends, influence stakeholders they don't control, and operate without a script. Well-designed leadership programs and executive coaching absolutely have a role here — particularly in helping candidates process and extract meaning from those high-stakes experiences, building the reflective capacity that separates good leaders from great ones.

Two tactics I'd highlight as underused: board and advisory exposure before the candidate is in contention, so they understand governance from the inside rather than the outside; and shadowing the incumbent CEO on high-stakes engagements — customer meetings, government dialogues — so candidates get an honest feel for the pace and trade-offs of the role.

The shift isn't away from structured development — it's toward integrating it with formative experiences that develop not just the what of the CEO role, but the how.

Michael: That really gets to the heart of what is expected of CEOs today. The CEO identity has fundamentally shifted. We spent decades selecting for the smartest person in the room — the oracle with all the answers. What we actually need now is a leader defined by agility, emotional range, and the willingness to move forward without certainty.

There is no playbook for the crises CEOs are navigating. What distinguishes those who lead well is a cultivated capacity for humility and vulnerability — the ability to build teams that complement their gaps, not just execute their vision. That’s a different developmental ask, and boards need to create the conditions for it: structured time to pause, reflect, and interrogate their own motivations and identity.

And let’s be direct about the personal dimension. The CEO role is a 24/7 investment with significant consequences for family and personal life. Candidates who have genuinely reckoned with that reality — not just intellectually but emotionally — are fundamentally more durable. That reckoning is part of readiness.

Michael: The single most important design principle is this: you are building for the future, not the present. Organizations consistently under-invest on this. They model the CEO specification against what’s working today, then wonder why their internal candidates feel underprepared when the context shifts three years later.

The specification needs to be reviewed annually — not as a bureaucratic exercise, but as a genuine strategic question: given where the business is heading, what does the CEO of 2029 actually need to be capable of? That answer should drive both assessment and development investment.
On scalability: as you approach a succession event, the goal is not to identify one heir apparent. It’s to build a real slate with genuine optionality. That requires continuously benchmarking internal candidates against the external market — not to replace them, but to calibrate your honest read of their relative standing.
And throughout, watch how candidates perform under stress. Not competency assessments — real pressure. How they behave when they don’t have the answers, when the data is ambiguous, when stakeholders are demanding certainty that doesn’t exist. That is your most reliable signal. All of this help show boards who may be best able to lead most adaptively into a still largely unknowable future. 

Michael: The most persistent mistake is treating the CEO specification as a static document. Businesses change, competitive threats evolve, and the specification must keep pace. When it doesn’t, you end up assessing candidates against criteria that are already outdated by the time a succession decision is made.

The second is the CHRO’s role being underutilized. Too often, the CHRO is positioned as a process manager — scheduling reviews, maintaining the succession chart. The stronger model is the CHRO as a genuine strategic partner to the Chair, the board, and the CEO: providing frank assessments of candidate readiness, surfacing development gaps before they become succession risks, and pushing back when the process is drifting toward comfort candidates rather than the right ones.

Third, boards underestimate their own role in pressure-testing candidates. It’s not enough to observe performance in curated settings. Boards need direct engagement with potential successors under conditions that reveal how they handle ambiguity, scrutiny, and accountability at the highest level. That visibility cuts both ways: it develops the candidates, and it sharpens the board’s judgment.

The organizations that get this right share one discipline: they stay in motion. Constant calibration. Forward-looking specification. Honest benchmarking. They don’t treat succession as a milestone; they treat it as a management system.

Boards who keep the process current, set their sights on the future specification, and are willing to keep calibrating and looking ahead, these are the ones who will be best equipped to appoint the CEOs the world will need.     

Michael: Here's a thought I'll leave you with: most organizations spend more time on financial scenario planning than they do on leadership scenario planning. We model what the business might look like in five years under different market conditions — but we rarely apply that same rigor to the question of what kind of leader that future scenario actually requires. Succession health shouldn't be measured only by whether there's a name in the box. It should be measured by whether the development system is actively building for the scenarios the business is most likely to face. That's a higher bar — and a more robust one.