No One Goes Easily: 5 Truths About CEO Transitions
During a recent presentation to a diverse group of CEOs from across the country, I posed the following question: how many of you became CEOs through a planned succession process? The responses? One CEO raised her hand halfway and said “sort of.” The rest of the group gave the following responses:
- “The old CEO left and there was no one qualified internally to succeed her.”
- “He was fired and I was hired.”
- “The Board wanted someone from outside.”
- “We had a financial crisis, I was hired on an interim basis to replace the CEO, and then I stayed.”
One relatively new CEO told me that his organization had operated for two years without a CEO while the Board conducted a national search. Several other CEOs who had been in their position for many years, were planning for their retirement and hoped to make the transition without launching any new initiative the next few years.
The fact is that most CEOs don’t go easily. A CEO may be dynamic, decisive, and successful, but the entrance and exit of a CEO is often very challenging and gut-wrenching, even if the best of circumstances. Here are some thoughts about the process:
- When a CEO also has a significant ownership stake in a company the ownership role is most often at the forefront. This means that the role of CEO is more complicated for colleagues and any transition will have multiple levels of resolution in any transition.
- CEOs are in a unique situation where they typically feel they are at the center of the action, yet have few people with whom they can honestly discuss their concerns. This increases the likelihood of errors and isolation of the CEO, making CEO support groups, like Vistage, a great option. CEOs seek the same interpersonal connection as anyone else, but there are more organizational and cultural obstacles for them.
- CEOs usually have a lot riding on the outcome of their decision. The may have considerable power, but the risk side is huge. A CEO client once told me that he found Las Vegas boring compared to the gambling of his daily life as an executive.
- There is no real training to be a CEO, only mentoring. Sometimes the mentoring is purposeful, many times it is the careful study of others from a distance. The latter is more typical, but is lacks the intimacy of true mentorship.
- Most CEOs don’t like planning for their own succession. They know that it sounds like a good idea, but very few like preparing for their exit from a position of power unless it is inevitable.
The issue of succession for CEOs, like other executives, deserves a careful rethinking, especially with the many delayed transitions due to the recent recession and other events. Keeping the above in mind could help us all incorporate the benefits of purposeful change with a recognition of dedicated leadership that has served us well.