As A New CEO, Should You Keep Or Restructure The Executive Team?

Several years ago, my firm was engaged to work with the incoming CEO of a large regional hospital system. In our first coaching conversation, she expressed a concern common among new CEOs. After just a few weeks on the job, she had already concluded that her current executive team lacked the experience and drive needed to lead a future-focused vision and strategy—one essential to keep the hospital system viable and competitive.

Our client stepped into an organization undergoing significant challenges, like many hospital systems. Among other things, it was grappling with rising competition, shifting regulations and pressure to grow while still upholding the highest standards of patient care. At the same time, the system was also under pressure to raise the funds needed to address long-overdue capital projects.

“Many people I’ve met since arriving, including board members, have told me that the existing team is the key to my success," the hospital CEO explained in one of our first sessions. "But I disagree. I’ve worked in other systems, and very few of my team members, some of whom have been there for up to 16 years, have the depth of experience or energy needed to take on the challenges we’re facing now.”

For her, the stakes were high, and her dilemma was also far from unique. So, should incoming CEOs simply retain the executive teams they inherit, or should they bring in new leaders who aren’t attached to past practices and outcomes and may be much better equipped to execute on current priorities?

The Case For Restructuring Your Executive Team

A new CEO often arrives with a mandate for change. When organizational performance has stagnated or strategy has drifted, a fresh strategic perspective can be precisely what’s needed. In such cases, restructuring the executive team poses risks, but it can send a powerful message that the organization is entering a new chapter.

Here are three additional considerations:

1. Building New Leadership Dynamics

Bringing in new leaders allows a CEO to shape the culture and team dynamics from the start. Most importantly, this move enables the CEO to recruit executives aligned with current values and strategic priorities. Given that alignment is necessary to accelerate decision making, ensure accountability and drive the performance factors critical to executing complex change initiatives, this move can be crucial to a new CEO’s success.

2. Establishing Trust And Buy-In

For a new CEO, earning the trust and commitment of the executive team is essential. If the existing team is skeptical or divided in their support, it can severely undermine the CEO’s ability to lead. Building a renewed and aligned leadership team—composed of individuals who have actively chosen to join under the new CEO’s vision—can accelerate the development of mutual trust and engagement.

3. Avoiding Legacy Constraints

Long-serving executives sometimes carry the weight of past decisions or entrenched relationships that can limit a CEO’s ability to pivot. A refreshed team may be less constrained by assumptions about how things should be done and more open to experimentation and innovation. For organizations seeking transformation—digital, operational or cultural—a clean slate can be the best way to accelerate change.

The Case For Retaining And Realigning Your Executive Team

While rebuilding a leadership team from the ground up can be strategic, it’s not without risks. For every success story, there is another story about a leader who moved too fast and disrupted valuable institutional continuity.

Consider these three points in the case for retaining and realigning:.

1. Retaining Institutional Knowledge

Existing executives understand the organization’s history, systems and culture. They’ve built relationships with key stakeholders, including employees, customers and partners. Replacing them can create a loss of institutional memory and slow progress at a time when the organization most needs stability,

2. Maintaining Stakeholder Trust

In sectors such as healthcare, higher education and public service—where trust and relationships affect performance—dramatic leadership turnover can unsettle staff and stakeholders alike. A CEO who replaces too many leaders too quickly risks alienating not only the executive team but the hundreds of employees who report to these leaders in various capacities.

3. Demonstrating Respect For The Organization’s Legacy

A thoughtful CEO knows that change doesn’t always mean replacement. In many cases, the most effective approach is to assess, realign and develop the existing team. Offering current executives the opportunity to grow under new leadership can signal respect for their past contributions while setting expectations for future performance. That said, the desire to retain an existing executive can be based on a false perception that they're irreplaceable, which is rarely the case.

Finding A Balance And Moving At The Right Pace

In the hospital system my firm worked with, the new CEO ultimately chose a hybrid path—retaining several experienced executives while recruiting selected leaders in key roles. The focus was not on wholesale replacement but on building a team capable of working collaboratively and in alignment with her new vision and strategic priorities. In the end, she replaced approximately half of the team during the first year. Her only regret was not moving faster—this is a common regret among incoming CEOs. In research conducted by Ty Wiggins, author of The New CEO, 65% of CEOs said "their top transition regret was that they did not move faster on building their top team," though 48% said "they made the first change to their team within the first three months."

If a CEO’s success has as much to do with their own vision and experience as it does with surrounding themselves with a high-functioning and aligned team, it is no surprise that time is of the essence when it comes to team restructuring. For incoming CEOs, the road ahead is clear: As you plan your first 90 days on the job, don’t assume it should only be an extended listening tour. Your first 90 days are a critical window in which to make strategic decisions about how to build a highly functioning executive team, and sometimes that means making decisions about who to let go.