7 Making a Great Exit
At some point in the succession process, your successor will need to know that he is the “chosen one” who is being groomed to replace you. There is no magic formula to determine the right time.
In one case, the successor was chosen three years in advance. Everyone in the company knew who was going to be the leader and had time to adjust to the process. Although this case was a success, I would not recommend it for every company.
In another case, the successor was part of a threeperson “horse race” and was notified very shortly before becoming the CEO. Although this case was a success, I would not recommend it in all cases.
Although each situation is unique, there are some common factors to consider when you are making this choice.
Letting Your Successor Know He Is Your Successor
A key variable in making this decision is to know how many viable candidates are available who can potentially be developed for the job when you, the CEO, decide to leave. If multiple candidates are available, all are potentially qualified, and more data can help in making the right decision, waiting can definitely be in order. If a clear front-runner is known, no other internal candidates are close, and the person may well leave if not being assured of succession, then waiting can be a mistake.
After determining when your successor knows he is the chosen one, you will need to determine how to break the news to his colleagues.
From my experience, you may well be amazed at how many of your executives thought that they had a realistic chance at the top job! We all tend to believe what we want to believe. Although you, as the CEO, may have thought that you were sending clear and unambiguous signals concerning an executive’s future opportunities, you cannot assume that he was receiving the messages that you were sending!
When your successor learns about his selection, you should coach him on how to deal with each key stakeholder—on an individual basis. Some will be thrilled with the news, some hopeful, some threatened, some angry, and some disappointed. Go through a role-playing exercise where he discusses his appointment with each person. Give him your best advice in cases where you can guess their reaction better than he can.
Before your successor talks with each stakeholder, you, as the CEO, need to have a one-on-one conversation with each person. You need to be sensitive to their emotional reaction to this news. At some point in time, after the final decision has been made, you will need to let them know that the final decision has been made. You will need to do whatever you can to encourage them to work with your successor in a way that is in the best interest of the company. In some cases, you need to be ready for their anger, their disappointment, or even their decision to leave the company.
Finally, you, as the CEO, need to avoid the “buyer’s remorse” that is too common in the transition process. Once the final commitment is made, let it go. Realize that you will probably have second thoughts, but that these second thoughts do not have to be verbalized to key stakeholders. Do whatever you can to minimize your own ego—and maximize your successor’s chances for a positive transition.
Declaring Victory
At a certain point in the developmental process, you, as a CEO, need to make peace with the fact that your successor—though not perfect—is good enough.
If your successor needs to develop in terms of behavioral change, if she is given a fair chance, and if she follows the steps that have been described in this memo, she will become a more effective leader, have better relationships with key stakeholders, and be better prepared to become a great chief executive.
Who should get all of the credit for the positive change in your successor?
You? You should ask for absolutely no credit. In fact, you should suggest that your successor not credit you for ideas in the entire coaching process. If she ever even mentions, “The CEO said…,” it could imply a lack of ownership on her part—and a desire to just please you to get ahead.
Your successor? She should take absolutely no credit for her positive change and increased leadership effectiveness.
The key stakeholders? Both you and your successor should thank the key stakeholders for helping her succeed. They deserve it! The key stakeholders are the people who provided the feedback that helped your successor determine what to improve. The key stakeholders provided ongoing ideas and suggestions. The key stakeholders were supportive and gave your successor a chance. They deserve all of the credit.
By giving key stakeholders all credit for her personal improvement, your successor will begin her leg of the CEO relay race on a positive note. She has already been handed the baton. She has already been selected as the runner who is chosen to lead the team. She doesn’t need to prove she is great. She needs to make them great! She doesn’t need to take credit. She needs to give credit!
Making a Great Exit!
When your successor is ready to move into the role of CEO, you need to be ready to do something that can be even more difficult—you need to leave!
You will be tempted by board members to stay on the board or perhaps become the “non–executive chairman.” If you really want your successor to be the CEO, fight this temptation. I know of a few cases where this model has worked well. It usually doesn’t!
I don’t have to mention names. You know a long list of former chief executives who developed their successor and passed the baton—until hard times hit the company. Then—although they allegedly didn’t want to—they “felt the call” to replace their successor and had to return to “save” the company. This “comeback” phenomenon is especially likely to occur if you are either the founder of the company or the person largely credited with the company’s success.
If you really don’t want to leave—stay! Staying on as CEO is not immoral, illegal, or unethical. If you want to stay, and the company can benefit from your staying, knock yourself out! Go for it as long as you can. Be honest with yourself. Just ignore this book and skip the whole “develop your successor” thing.
One of the greatest examples of CEO succession that I know involved a CEO who actually left before he was scheduled to go. His successor was highly sought after, and as a sign of his true commitment to succession, he left the company early so his successor would know the job was his. This showed some real leadership!
In terms of staying, no matter how great you are, you are going to have to leave sometime. We all get old—and we all die.
My final suggestion is, show some class on the way out. Do whatever you can to make your successor a winner. Get over your own ego.
Try to avoid the “return from the grave” syndrome that is becoming far too common for CEOs. For example, don’t talk to the press—in a disparaging way—about your successor. Don’t fall into the trap of babbling on about “what I would have done” if one of your successor’s ideas fails. You would not have wanted your predecessor to have done this to you—don’t do it to your successor!
Even if other people don’t know what you have done, your successor will. And more importantly, you will.
If all goes well, you may have taught your successor a great lesson: how to successfully pass the baton of leadership on to her successor, who will then lead an organization that will continue to prosper in the future—an organization that all three of you will be proud of!