In the fall of 2024, two iconic American brands hit the wall in roughly the same quarter, and their boards reached in opposite directions. Nike turned inward, bringing back Elliott Hill, who had spent more than three decades inside the company before retiring. Starbucks went the other way and poached Brian Niccol from Chipotle, picking a leader who had never sold a single latte. Same crisis, opposite bets.
It was part of a record wave: U.S. public companies announced more CEO changes in 2024 than in any year since outplacement firm Challenger, Gray & Christmas began tracking. Boeing, Intel, Nike, Starbucks—one marquee name after another faced the same critical decision.
The choice almost always gets framed as a choice between an insider and an outsider. I will suggest an alternative axis. Instead, the right choice depends on who can best define and hold the company’s strategic center. Failing to address this coherently is a major source of disappointing successions.
When sustainable competitive advantage is no longer, you need a center
Every company organizes itself around a center: a primary source of value that everything else is arranged to serve. It might be a mission, a customer, a technology, an ecosystem, or the relentless erasure of friction. Strategy, in the end, is the discipline of choosing that center and keeping the whole organization coherent around it.
Companies rarely need rescuing because they suddenly got bad at what they do. They need rescuing for one of two reasons. The first is when an old expression of the center has stopped paying off. That could be because a once-durable advantage went transient, and the old business model no longer delivers. The second occurs when the center is still sound, but the company has drifted away from it. Call these a broken center and a lost center. They look similar from the outside. They demand completely different leaders.
So the real job description for the next CEO is some version of re-centering: confirming and re-anchoring a center that’s still valid, or moving the company to a new one. And the capacity to do that has almost nothing to do with how many years someone has spent in the building.
Choice 1: The pure insider
A safe-feeling move for boards is to hand the reins to a member of the senior team because the board believes they best know the company, its culture, and its people. The strengths are real: no learning curve, instant command of the wiring, and a powerful signal of continuity that calms a frightened organization.
If your diagnosis is a lost center, meaning that the organizing logic is still sound, but the company has drifted and stopped executing, then a respected insider who can rally people back to what made the place work is exactly right. If the center itself is broken, the same person is the riskiest possible choice, because they’re the least able to see that the thing they may have spent a career defending now needs to move. Knowing the center intimately is not the same as being willing to relocate it.
Choice 2: The insider-outsider
Satya Nadella is the canonical case. He had been at Microsoft since 1992—a deep insider by any measure. But he came up through the server and cloud businesses, not the Windows franchise the company was centered on. Its mission said it all: “A computer on every desk and in every home.” Nadella had an insider’s relationships and credibility and an outsider’s detachment from the old center, which let him declare Microsoft “mobile-first, cloud-first” and move the company’s center from Windows to the cloud in a way no Windows lifer ever could have. Indeed, the computer left the company’s new center entirely, as Nadella defined its purpose as “to empower every person and every organization on the planet to achieve more.”
The pattern generalizes: the executive who grew up outside the dominant center, in a non-core business, an adjacent geography, or a function no one fought over often makes the ideal re-centering leader, because they carry the culture without being captured by the center that has to change.
If your center is broken but your people and culture are still assets worth keeping, this is the profile to hunt for, and the one boards often overlook, because nobody’s résumé is labeled “insider-outsider.”
Choice 3: The pure outsider
Sometimes the center is still powerful, but the mechanisms to realize it have eroded. Sharon Price John arrived at Build-A-Bear in 2013 from the toy and footwear world. The company was indeed centered on its customers, with the mission to “add a little more heart to life.” It created spaces in which children and their families could create beloved furry friends of their own making. The center was still powerful, even then. Unfortunately, with malls becoming less popular, time becoming scarcer and the systems growing increasingly outdated, the company struggled. An outsider could see what the lifers couldn’t: the customer center was sound, but the channel was broken. Moreover, the prevailing belief in the firm was that it was a workshop that happened to have built a brand. John realized that it was a brand waiting to be unleashed from its roots as a workshop. She protected the center and rebuilt around it.
Alan Mulally landed at Ford from Boeing and did something different. He pulled a sprawling, incoherent company back to a single operating center, the discipline behind “One Ford,” that its own veterans had never managed to hold.
The instinct to look outside when you’re in trouble has support. Boards reach outside far more often when performance is poor, and McKinsey has found that externally hired CEOs are more likely to make bold strategic moves. But here’s what boards romanticize away: the variance is brutal. As reported in Fortune, Spencer Stuart’s analysis of 950 S&P 500 CEOs found that insiders and outsiders perform about the same on average—but outsider outcomes are far more spread out, with bigger wins and bigger failures. The outsider’s signature risk is re-centering the wrong thing: dismantling a center that was actually creating value because they couldn’t see what made the place special. The best ones guard against this.
It’s no accident that Niccol’s opening move at Starbucks was “Back to Starbucks”—an outsider who correctly read a lost center, not a broken one, and returned the company to itself rather than reinventing it. At Nike, Elliott Hill is explicitly mimicking legendary founder Phil Knight’s commitments to strong, personal relationships with athletes and the experience of competition, after his predecessor let the company drift from that compelling center.
A diagnostic to consider
Three questions to consider.
- Do we have a coherent center? If not, look for someone who can tell a compelling story about what the center should be and have the courage to follow through with tough choices, such as divesting businesses that no longer fit.
- Is our existing center no longer relevant (for example, have we accomplished the mission we were centered on)? If so, an insider-outsider who knows the company but isn’t captured by the previous center may be a good choice.
- Is our existing center still relevant, but the existing business model is not? In this case, you may want someone who “gets” the center but can bring fresh thinking to how it is delivered.
The binary of inside vs. outside feels decisive, which is appealing. But the boards that get this right aren’t really choosing between inside and outside. They’re choosing who will be the custodian of the company’s future center.