Jim Collins, in Good to Great found that the best performing CEOs are the ones that are promoted from within, not external ones. Ben Horowitz tackles the question of why internal candidates fail sometimes.
He breaks down executives into two types: 1) “idea people” and 2) “execution people”. Your CEO needs to be an idea person, but he truly needs to surround himself with execution people. The problem comes when it’s time to replace the CEO. What do you? If you promote an execution person, the company can become slow and bogged down, because the type 2s tend to like a lot of information and take time to make decisions, whereas a 1 is ok with making decisions on the fly.
You can do what GE did, which was to promote Jack Welch from two levels below to succeed his superiors. This will inevitably cause turnover from those who were passed up, which is ok in the case of a highly diversified company like GE, however this could be the death of a tech company.
The answer is that there is no good answer. What individuals can do though is realize what kind of leader they are and work hard to perfect the other skill.