When a CEO takes the helm, there are two schools of thought regarding turnover in the top management team. Some argue big changes in the executive suite are necessary, because CEOs can more quickly put their stamp on the firm if they bring in their own people. This “sweep-out effect,” as scholars call it, enables a new CEO to enact operational and cultural changes with a clean slate, unencumbered by executives beholden to the previous regime or the status quo.
Taking the opposite view, some analysts suggest that because incoming CEOs have so much on their plate, they’re making a mistake if they don’t tap into the internal knowledge and expertise possessed by incumbent executives. Indeed, studies have shown that too much change after a new CEO’s appointment can be disruptive, dragging down firm performance.
A new study offers a more nuanced appraisal of the dynamics in post-succession C-suites, investigating