This is the fifth in a series addressing the imperatives and challenges CEOs face through the entire spectrum of the role—from preparation for the job to exit. Here’s part one , part two, part three and part four.
There are four major challenges in the “closing” stage of the CEO life cycle:
Providing increased responsibility and coaching to prepare for succession
CEOs are keenly aware of the capabilities represented in their leadership team members and can offer a clear vision of suitability of candidates for succession. It is their responsibility to build the candidates’ leadership skillsets by setting up a series of increasingly challenging on-the-job experiences and coaching to improve their effectiveness. Delegating stretch work responsibilities and providing ongoing feedback helps ensure a qualified pool of succession candidates. Our recommendation is to start the process at least five years before the succession target date and involve at least two job rotations.
Some CEOs may want to avoid the topic of succession, lest they prematurely signal to the board that they are winding down their tenure, but this is far from the truth. Taking on responsibility for succession planning demonstrates that CEOs have the best interest of the company at heart and is a sign of confidence. For many CEOs, the process begins when they assume the role and succession planning remains a top priority throughout their tenure.
Working with the board to develop leadership criteria for the CEO role
Engaging in a meaningful dialogue with board members about criteria for the role can take several months and is best facilitated with a consultant experienced in succession planning and competency modeling. Gaining agreement on the assessment criteria will help avoid disagreements about selection decisions later in the process.
CEOs often guard access to the board in an attempt to maintain their position of power. While most leaders would like to name their successor, selecting the next CEO is clearly the responsibility of the board. Providing the board with ongoing access to senior management will be critical to helping the board fulfill its fiduciary responsibility.
Continuing personal and leadership growth, fighting complacency and protection of the status quo
Having spent much of their careers fighting through adversity to achieve the top job, CEOs will also grapple with the personal sense of loss in stepping away from such a powerful and impactful role. Since much of a CEO’s sense of identity is linked to work life, the prospect of giving up the job is daunting and requires introspection. Renewing a personal commitment to lifelong learning and personal growth will help weather this transition.
Successful CEOs are committed to a continuous improvement philosophy, constantly revisiting their vision for the company as the external marketplace shifts. Facilitating dialogue to drive innovation for the organization will remain an ongoing priority. This requires great effort in maintaining connection with customers to anticipate industry trends, identifying opportunities to drive change within the company and empowering leaders to execute the change.
Preparing for post-CEO life
In planning for the next phase in their career journey, CEOs can revisit their personal mission and values while starting to identify opportunities to serve on boards, teach, write and/or travel in retirement. They will also want to think about whether or not to stay on in an advisory role or in a formal role as chairman or board member in their present company.
Retirement from a CEO role may also involve relocation and changing the mix of activity from a career to a recreational focus. Like all life transitions, this requires planning and forethought. CEOs can engage their spouse or significant other in a discussion about how their relationship will change in the future. For many people, stepping into this next stage of life involves giving back to their family and community through increased participation in philanthropic activities. Taking the time up front to try out new roles will help ease the transition and set the stage for a fruitful and personally satisfying retirement.