Kwak mentions two questions that most companies don't bother to ask when looking for an outside CEO:
There are two important questions they tend not to ask, however. First, was Apple successful because of Johnson, or was he just along for the ride? Yes, he was the main man behind the Apple Store (although, according to Walter Isaacson’s book, Steve Jobs was really the genius behind everything). But was the success of the Apple Store just a consequence of the success of the iPhone?Based on these questions there are a couple of points I want to pick up.
Second, even if Johnson was a major contributor to Apple’s success, how much of his abilities are transferable to and relevant to J.C. Penney? There’s a big difference between selling the most lusted-after products on the planet and selling commodities in second-rate malls. When someone has been successful in one context, how much information does that really give you about how he will perform in a new environment?
Related to the first question companies rationally realize that picking the wrong strategy can be absolutely disastrous. A new CEO provides an opportunity for a new direction and new vision for the company.
The mistaken conclusion from this observation is twofold. First, the ability to pursue a strategy has much more to do with the long investment of the company in its personnel and internal organization than it does with the man at the top. This is the great man myth in action and is a major problem with American corporations which tend to be biased towards top management, leading to erosion of talent at the bottom and a need to promote people who have a strong comparative advantage in their current position but that need to be promoted to be retained due to wage differentials (someone being a spectacular salesman/programmer/administrator has nothing at all to do with whether they would be successful in a more senior position; different skill sets requiring different aptitudes; compressed pay scales at the bottom and exponentially increasing salaries above median income mean that specialization in front line positions is a career killer in most fields). We see this in frequent complaints about the inability of businesses to find skilled workers at lower levels (of course they're in short supply, we no longer invest in training them or with providing them with adequate wages) and with the disproportionate incomes going to top positions (this problem is present in non-profits as well, though there is the problem with non-teachable assets like social network connections for fundraising or for opening the door to large accounts).