Every CEO transition is high stakes for a board and its company: An effective succession plan can mitigate turbulence and ensure a steady course forward, while a poorly executed one risks missteps that ripple across the organization. At our recent Boardroom Summit, Verisk CEO Lee Shavel and Matt Paese, DDI’s SVP of Leadership Insights, shed light on what it takes to make succession planning a lasting success.
Shavel, a CEO with diverse experience in financial and data analytics industries, shared his own journey through Verisk’s succession process, highlighting three key lessons that directors can apply to their own processes.
1. Avoid naming a front-runner too early.
One common mistake in succession planning is appointing an heir apparent before fully understanding the business’s future needs. “It’s dangerous to name a front runner or have an implicit front runner if you think the business might change,” Paese cautioned.
When Shavel was up for consideration, he wasn’t necessarily the obvious choice. His background was in finance, not insurance, and he’d only been with Verisk a short time compared to his peer—a well-regarded internal candidate with deep roots in the business. “I didn’t join Verisk with the expectation of being the CEO,” says Shavel. “It was a possibility, but…an unlikely possibility given that I had not grown up in the insurance industry.”
What shifted the board’s decision was a change in the company’s strategic direction. Verisk had recently made several acquisitions and expanded into non-core sectors, creating volatility and leaving investors questioning the value of these new endeavors. Shavel’s outsider perspective and strategic insight suddenly became valuable, and the board began to see him as the leader to guide Verisk through a complex transition. “If the business was performing well… it may have absolutely been the case that my colleague would’ve been the better candidate,” Shavel noted, highlighting the critical importance of context in choosing a CEO.
The takeaway? Boards should avoid prematurely designating a successor and instead remain open to assessing potential candidates as business needs evolve.
2. Focus on trajectory, not just credentials
In a thoughtful succession process, candidates don’t just participate in interviews—they’re put through developmental experiences that simulate the real demands of the top job. For Shavel, this took the form of a CEO simulation conducted by DDI. Shavel recalled the experience as both challenging and enlightening: “It was intended to simulate and test how you’re responding to a complex and really kind of a time management exercise more than anything else.”
The simulation allowed the board to observe each candidate under pressure, navigating real CEO responsibilities, from building a strategic business plan to handling hypothetical media interviews. “We saw two very different individuals with very, very different profiles,” Paese shared, underscoring how developmental experiences can reveal capabilities that traditional evaluations might miss.
This approach also fostered a productive, collaborative relationship between Shavel and his competitor, who had previously served as Verisk’s CFO and remained supportive throughout the process. “We had a really good balanced element, but we’re both driven, ambitious, competitive people,” Shavel said. By focusing on executive development rather than a “horse race” atmosphere, Verisk’s board diffused potential tension and kept the process constructive.
For boards, the lesson here is to create rigorous development opportunities that assess a candidate’s trajectory. “CEO candidates are like a hockey puck; it’s trajectory that matters,” Paese noted. By observing how candidates absorb feedback and adapt, boards can better gauge whether a candidate’s growth aligns with the company’s needs.
3. Growth predicts growth.
If you see a candidate taking their growth seriously in the months and years prior to placing them into a role, said Paese, you can predict that their growth will likely continue once in the role. “Shavel started his development two years prior to taking the role, continued the same development path through his first two years as CEO, and it continues today.”
Shavel shared two key pieces of feedback he received: first, to be more concise in his communication—”boiling that down and simplifying it”—and second, to work on his “resting face” to appear more approachable during conversations with his team. “I’ve learned to have to smile while I’m listening to people,” he joked.
Despite his initial self-doubt about inspiring others, Shavel’s senior team soon observed a transformation. Paese recalled a conversation with two of Shavel’s senior leaders who said, “Lee’s the most inspirational leader we’ve ever worked for.” The feedback wasn’t just flattering; it was a testament to Shavel’s adaptability and openness to change.
Shavel’s journey illustrates the importance of continual growth, even at the highest level. “You realize that influencing the culture is the biggest lever that you have to affect the organization,” Shavel said, adding that his role was to guide decisions rather than dictate them.
Verisk’s succession process was a powerful example of how to develop a CEO with the right skills and vision. When boards consider their next leaders, they should not only ask who the company needs today, but who it might need tomorrow. As Shavel’s experience proves, with the right process in place, the best leaders often reveal themselves when given the chance to grow.
