What Makes an Effective Next Gen CEO?

By Prof. Enrique N. Soriano

Last week’s story of a failed CEO highlighted the cost of misjudgment. This article focuses on what effective next-generation CEOs do differently, particularly in family-owned enterprises where leadership transitions carry personal, emotional, and reputational consequences.

Across my work with multigenerational businesses in Asia, one pattern consistently emerges: successful next-generation leaders make a deliberate shift—from operator to strategist.

Many successors step into the CEO role believing they must prove themselves by working harder, knowing more, and staying deeply involved in daily operations. This instinct is understandable. It is also limiting.

That mindset belongs to an operator.

The CEO role demands something fundamentally different.

A CEO’s core responsibilities include setting the organization’s overall vision and strategy, making major corporate decisions, overseeing financial and operational performance, building and leading the executive team, managing key stakeholders—including the board, lenders, regulators, and the public—and ensuring long-term growth and profitability.

Ultimately, the CEO is accountable for the entire organization’s success or failure—not only today’s results, but tomorrow’s resilience.

This accountability changes how time, attention, and judgment must be deployed.

The higher one rises in an organization, the less valuable personal execution becomes—and the more valuable judgment, foresight, and alignment are. The CEO’s role is not to solve every problem personally, but to ensure the right problems are addressed early, by the right people, in the right sequence.

Effective next-generation CEOs distinguish themselves in three ways.

First, they institutionalize foresight. Scenario planning, stress-testing, and contingency discussions are embedded into regular management processes. Risk is not treated as an occasional agenda item, but as a permanent strategic discipline.

Second, they learn from the past without being imprisoned by it. Previous crises—financial shocks, supply-chain disruptions, leadership breakdowns—are analyzed for patterns and implications. History becomes a source of insight, not nostalgia or denial.

Third, they manage people to execute, rather than attempting to execute personally. Strong CEOs surround themselves with capable professionals, many of whom possess deeper functional experience than they do. They invite dissent, listen carefully, and resist the temptation to equate control with leadership.

This transition is particularly difficult in family businesses, where trust is often confused with familiarity and authority with lineage. Letting go of operational control can feel like weakness. In reality, it is a mark of strategic maturity.

The most effective next-generation CEOs also learn to separate identity from role. Being the founder’s child or successor does not grant immunity from uncertainty. If anything, it demands greater humility, discipline, and preparation.

They understand a simple but powerful truth:

The higher the position, the greater the obligation to prepare quietly.

These leaders do not wait for disruption to validate their concerns. They prepare before certainty arrives. When shocks occur—as they inevitably do—the organization responds with discipline rather than panic.

The transition from operator to strategist is not optional. It is the price of leadership at scale.

For next-generation CEOs navigating complexity, uncertainty, and heightened expectations, the real question is no longer whether they are capable operators.

The real question is whether they are ready to become strategic leaders.

***

Prof. Enrique M. Soriano will further explore board-level accountability and governance standards in his upcoming webinar, “Director Duties: What It Means in Practice in Family Enterprises,” on March 4 at 10:00 AM.

He will also continue examining next-generation leadership and governance themes in his Governance Masterclass at Vivere Hotel, Alabang, on March 28, 2026. For reservations, please contact Christine at +63 917 324 7216.