What’s next for BrewDog as a new ‘captain’ steps in? - ​Jamie Livingston

Internal musical chairs can be a good thing; it’s a softer landing for Watt and with Arrow, they get a leader who knows the business inside out having most recently served as BrewDog’s COO.

To make this transition as clean as possible, the company will need to make sure there are clear lines around who will be responsible and accountable for what in the new structure. Moving from CEO to NXD can be a difficult transition – especially with an internal successor – as employees often naturally defer to the ‘old lines of authority’. BrewDog will need to be very deliberate about how it manages this.

Over the years BrewDog has developed a reputation for having a distinct culture. An internal successor, in this case James Arrow, is more likely to maintain this and be accepted by the organisation, as opposed to an external appointment which would have been at high risk of ‘organ rejection’.

Company chairman Allan Leighton said “few have accomplished” what Mr Watt has – and he’s right. James Watt brought BrewDog to the dance – taking them from a small startup to one of the biggest names in brewing, turning over more than £300m.

However, perhaps different skills are required for the next phase of their journey, with new challenges like further expansion into China on the horizon.

Watt is a big character who very much represents the brand and culture in the market – and he has courted controversy along the way. It’s been fascinating to see how he’s seemed to be able to ride out all the challenges he’s faced, from the BBC disclosure investigation around the “culture of fear” within the business to his backtracking on living wage for staff. I wonder whether as an NXD his ability to ride out storms will be put to use.

BrewDog appears to have done the right thing in having a succession plan in place. Too many organisations leave CEO succession planning until it’s too late. It’s a process that should ideally be thought about years in advance, with internal candidates placed on tailored development plans that give them the best chance of making the step up.

Being clear on the plans and ambition of the organisation moving forward allows for an appropriate search and assessment process. Best practice would normally see internal candidates benchmarked against the best talent in the external market. Should the internal candidate be selected, it gives all key stakeholders (investors, board, colleagues etc) and not least them, the confidence that they are the right person for the job and not just the best available internally.

It remains to be seen what has prompted Watt and BrewDog to take this step, and how long the succession plan has been in place, but what is certain is that Arrow will be facing far more public scrutiny than most new CEOs.

Jamie Livingston is founding director and CEO of Scottish executive search specialist Livingston James Group, which became the first business of its kind in Scotland to enter employee ownership last year.