5 Steps to Successfully Navigate a CEO Succession Process

At some point, every company faces a transition in leadership.

At Hallam-ICS, our first CEO transition occurred in 2001 when our founder, David Hallam, retired. Twenty-five years later, we experienced our second CEO succession.

Thoughtful CEO succession planning is critical for long-term business continuity, leadership development, and cultural stability. While every organization approaches the process differently, we wanted to share several lessons from the approach we used at Hallam-ICS during our five-year CEO transition process.

With only two CEOs in our company’s 45-year history, we don’t claim to be experts in succession planning. However, the process reinforced several principles that we believe are valuable for organizations preparing for leadership transition.

Our goal wasn’t simply to find “the next CEO.” It was to ensure we had an aligned leadership team that deeply understood our culture, our clients, and the unique responsibilities of leading a 100% employee-owned company (ESOP).

Shifting our mindset from “replacement” to “development” proved to be one of the most important decisions we made.

When Should CEO Succession Planning Begin?

The short answer is, earlier than you think.

We started our CEO succession process five years before the planned transition. Starting early allowed us to prioritize leadership development and teambuilding.

5 Steps In an Effective CEO Succession Process

1. Create a CEO Succession Committee

In founder-led companies, it’s common for the founder to select the next CEO directly. In non-founder transitions, a more structured and collaborative approach is typically more effective.

We formed a CEO Succession Committee consisting of a cross-section of company leaders. The committee met regularly over multiple years, evaluated candidates, and ultimately made a recommendation to the Board of Directors for approval.

While I remained involved, the decision was not mine alone.

This shared governance model reinforced accountability, strengthened trust in the process, and was aligned with our team-based leadership.

2. Establish Leadership Requirements and Selection Criteria

Before evaluating candidates, it is important to clearly define what the organization needs from its next CEO.

Rather than a traditional job description, we defined a clear set of leadership competencies and attributes that aligned with our business strategy.

One important lesson we learned was the need to look forward rather than backward. It can be tempting to search for someone who resembles the current CEO, but succession planning should focus on what the company will need in the future, not simply what worked in the past.

The committee also defined how candidates would be evaluated, helping to ensure the process remained objective, consistent, and adhered to agreed-upon criteria. Creating objective criteria early helped reduce the risk of the process becoming driven by familiarity, popularity, or organizational comfort.

Leadership transitions naturally create uncertainty, and clear expectations helped provide stability throughout the process.

3. Identify and Evaluate Candidates

Early in the process, we considered searching for both internal and external candidates. However, our research and discussions with other ESOPs reinforced that cultural fit is critical for employee-owned companies. Most recommended we start with internal candidates.

We advertised the position internally, interviewed all applicants, and selected four candidates to participate in a muti-year development process.

Through group training and individual assignments, each candidate received exposure to key areas of the business, including operations, finance, strategic planning, client engagement, and people leadership. This wasn’t an academic exercise. It involved real responsibilities, meaningful challenges, and honest feedback.

Our approach was not without risk. There was some initial awkwardness in this group approach, and we were mindful that those not selected might choose to leave.

At the same time, we believed there was significant long-term value in developing multiple strong leaders rather than focusing exclusively on a single successor.

In hindsight, that investment strengthened our overall leadership team and reinforced the importance of collaboration throughout the process.

4. Select the next CEO

Ultimately, the committee was responsible for recommending a final candidate to the Board of Directors.

This was not an easy decision. We had four highly capable leaders who were also our colleagues, teammates, and fellow employee-owners.

Focusing on our defined selection criteria and engaging in open, thoughtful dialogue, the committee selected Vin Calio as Hallam-ICS’s next CEO. The Board of Directors approved the recommendation.

5. Implement a phased leadership transition

Rather than treating leadership change as a single event focused on a single individual, we designed a phased transition process.

Before becoming CEO, Vin served in an expanded operational leadership role as the Chief Operating Officer (COO) for an eighteen-month period. This allowed him to work closely with all regional offices and every service line while gaining broader operational and strategic experience across the company.

At the same time, the other three candidates remained with Hallam-ICS, forming a strong and aligned leadership team.

A thoughtful transition process benefits everyone involved. Employees gain stability, clients experience continuity, and the incoming CEO develops a deeper practical understanding of the responsibilities of the role before fully stepping into it.

Leadership Transition and Stewardship

At Hallam-ICS, we often talk about Stewardship. David Hallam captured it well in his Founder’s Vision:

Stewardship means that we each understand that this company is not “mine”, but that we are each entrusted, for a time, with the responsibility and benefits of this renewable resource. We will organize and perpetuate our ownership with a constant awareness that we must pass the company on in better condition than we received it.

CEO succession is one of the clearest examples of Stewardship. Done well, it’s not just about selecting the next leader. It’s about strengthening the organization, reinforcing its culture, and ensuring sustainable growth and success that is not dependent upon one individual.

About the Author

Keith Flaherty is a graduate of the University of Vermont with a BSEE and an MBA. Since joining Hallam-ICS in 1988, he has served as an electrical engineer, Manager of Integration Services, CFO, and CEO. Throughout his leadership, he has focused on understanding and meeting the needs of each individual client while fostering a culture built on technical excellence, stewardship, and employee ownership.

Read    My Hallam Story   

About Hallam-ICS

Hallam-ICS is an engineering and automation company that designs MEP systems for facilities and plants, engineers control and automation solutions, and ensures safety and regulatory compliance through arc flash studies, commissioning, and validation. Our offices are located in Massachusetts, Connecticut, New York, Vermont, North Carolina and Texas and our projects take us world-wide.