With the tenures of CEOs averaging about six to eight years, and having been as low as four to five years, the message to executives from the first day on the job might be, “This is temporary; be prepared to leave.” Yet many executives who find themselves stepping down for any number of reasons are caught unaware.
“It was a huge surprise,” recalled Jacques “Jac” Nasser, who resigned as CEO of Ford Motor Company in October 2001, two years after he had assumed the position. At the time, the automaker faced a souring economy, and Nasser had rolled out an aggressive plan to cut costs and improve efficiencies.
“I was so focused on the dayâ€”toâ€”day and doing what I believed needed to be done, I didn’t see it coming,” Nasser admitted. One minute he was running the company; literally the next, he was not.
David Neeleman’s departure as CEO of JetBlue Airways Corp. in May 2007, the airline he had founded, came six months after a glowing assessment of his performance from the board of directors. The trouble for him, however, stemmed from an ice storm in February 2007 that stranded passengers onboard planes for hours and disrupted the airline’s operations for days. As CEO, Neeleman took responsibility: publicly apologizing to irate passengers, offering vouchers for future travel, and unveiling a customer bill of rights. Three months after the storm, he was asked to relinquish the CEO post; a year after that, in May 2008, he resigned as chairman.
“It was horribleâ€”really shocking. I felt like I was suckerâ€”punched,” Neeleman described.
Although no one may know for sure when they might have to step down, CEOs would do well to prepare themselves intellectually and psychologically for what is often the inevitable result of taking the job at the top. To keep from being blindsided, CEOs might heed the advice of others who have gone through the upheaval.
Based on our conversations with CEOs and other senior leaders, the process of enduring a setback and staging a comeback on one’s own terms can be encapsulated by four Rs: rehearse, reflect, be resilient, and reboot. Understanding these four steps can help CEOs increase their selfâ€”awareness, gain a better sense of balance between who they are versus what they do, and prepare themselves mentally and emotionally for the second act of their careers.
There are life events for which we prepare ourselves mentally. We literally rehearse in our minds what we would say or do in the event of certain “what if” scenarios: for example, a serious medical diagnosis for ourselves or a loved one; or a phone call that informs us a parent is gravely ill or has died. We steel ourselves, believing that the more we are prepared ahead of time, the better we will be able to handle the upset when it occurs.
Yet this rarely happens in our professional lives. We assume that we will enjoy the status quo of our success and never have to consider the downside. For CEOs, however, such thinking can lead to significant upset when the time comes that they have to leave. By rehearsing what life after this leadership role might look like, CEOs can look beyond their current jobsâ€”even when things are going wellâ€”and consider what to do in their “second acts.” Becoming mentally and emotionally prepared is as simple as asking, “If I found out tomorrow that I am no longer the CEO, what would I do? How would I want to live my life? What would make my Act II significant for me?”
Rehearsing what comes next is only possible when CEOs have a healthy division between who they are and what they do. “I never allowed myself to get caught up in it,” commented Harry M. Jansen Kraemer Jr., who served as CEO of Baxter International for nearly six years, starting in 1999. “There are so many things you don’t control. When I was appointed CEO, I knew the average CEO is in the job three or four years. I said, ‘I’m going to enjoy this. I’m going to do the right thing and do the best I can. And what happens, happens.'”
When the time came for him to leave Baxter, he was able to explore a variety of options. His decision was not to pursue another CEO position. Rather, he took on a variety of activities as an executive partner for private equity firm Madison Dearborn Partners, a professor at Northwestern University’s Kellogg School of Management focusing on valuesâ€”based leadership, and a member of several forâ€”profit and notâ€”forâ€”profit boards. Kraemer found that his values had not changed, but his priorities did.
By rehearsing what comes next, CEOs can avoid becoming so wrapped up in their positions that they cannot bring themselves to imagine anything different, which can affect their senses of selfâ€”worth. When the power and prestige that comes with running a large company suddenly goes away, the impact can be felt not only by the executive, but also the spouse.
“It was my net worth, not my selfâ€”worth” that was impacted, said Jamie Dimon, who is now the CEO of JPMorgan Chase, recalling when he was fired as president of Citigroup in 1998. His wife, Judy, echoed the sentiment, commenting, “I never defined Jamie by his job, and he never defined himself by his job.”
Dimon took the time to “try on” new opportunities, as he called it; asking himself how it would feel to have a particular job. As a result, Dimon and his wife were able to evaluate the career opportunities that arose, with knowledge of what Dimon wanted to do and the impact on the family, including their three schoolâ€”aged daughters.
CEOs may find it helpful to reflect upon their priorities. What matters in their lives now? If they lost their jobs, would those priorities change? What might they do differently in order to lead a life not only of success, but of significance? As a result of their life experiences, have they redefined what success means to them at this point in time? These questions are important at any time, but especially in the midst of transition.
When a CEO is fired or asked to resign, the result is often a shift in priorities. What had seemed so important is suddenly less so. The path aheadâ€”regardless of the desired destinationâ€”feels more selfâ€”directed.
For Durk Jager, being asked to step down as CEO of Proctor & Gamble solidified his decision to retire from the corporate world. At the age of 56, he had no desireâ€”or needâ€”to replicate what he had already done. Instead, he left behind the corporate world as an executive and looked for other opportunities to contribute his knowledge, expertise, and wisdom such as being a board member and adviser. By shifting his priorities, Jager was able to take a longâ€”term view of his career, beyond the experience at the time of being asked to leave in the midst of the company’s economic challenges. He could see the entire context of the thirty years he had spent with the company and concluded that he had, indeed, done his best. He found solace in a letter he received from a company director: “There is life after Procter.”
Resilience is an essential, but often underestimated, leadership quality. Being resilient allows a person to persevere in the midst of difficulty, learn important lessons, and grow as a result of the challenges. One becomes better equipped to handle future upsets, whether professional or personal.
When a CEO is asked to resign, the more resilient he/she is, the easier and less painful the transition will be. That was the lesson learned by Christopher Galvin when he was asked to step down as CEO of Motorola Corp., which had been founded by his grandfather. The request for his resignation occurred just as a turnaround plan he had put in place was coming to fruition, which made his pending departure even more painful. Galvin navigated a difficult transition by being resilient: knowing that others, like him, had faced tumult in the past and managed to get to the other side. He drew upon the example of his grandfather who, before he had founded Motorola, had two businesses fail.
One key to being resilient is selfâ€”care. Times of high stress typically disrupt sleep and undermine healthy habits such as diet and exercise. “In these periods of stress, it is pretty easy just to focus on the battle. You can do that for a while, but in the end you’ve got to be reasonably aware, intellectually and physically, of how you are. You have to take care of yourself,” advised Robert Steel, who as the new CEO of Wachovia Corporation was suddenly confronted by the need to sell the company in 2008 in the midst of the financial crisis. Suddenly, Steel was out of a job as a result of doing the right thing for the company and its shareholders.
Before a CEO faces the need to step down for whatever reason, resilience can be built by reflecting upon past challenges. What was helpful getting through those difficult times? Typically, family, friends, and other supporters are invaluable. When Patricia Dunn came under fire as chairman of Hewlettâ€”Packard in the midst of a corporate espionage scandal, the support of her allies were essential. During the worst of itâ€”including as she testified before Congress while being treated for cancerâ€”Dunn was wellâ€”supported, especially by her family. “They just had blind faith that whatever bad things were being said couldn’t be true. I got so many demonstrations of their support during that period. It was almost overwhelming,” she recalled.
“If the world had gone silent,” she added, “I would have been devastated.”Taking care of one’s relationships ahead of time is an emotionally intelligent strategy for many reasonsâ€”including making sure a support system is in place should a career upset occur.
The final step in making a successful transition is being able to start up again, whether as a CEO for another company or in a different capacity. Galvin called this process “rebooting”. A personal reboot is only possible if CEOs have an authentic view of what now constitutes success, what is the driver or passion at this point in time in their lives. Being able to own one’s accomplishments and identify the lessons learned from adversity is critical.
“When you reboot, you have to find out who you really are. When you step awayâ€¦you look at yourself in the mirror and see what you have accomplished. Those who can’t reboot don’t have the confidence to do it again,” Galvin observed.
CEOs can improve their ability to start over again by reflecting on their past leadership. What has made them successful in the past will be the key to their future. But the lessons learned will bring wisdom and depth to their second act, wherever that takes them.
It Pays to Be Prepared
Becoming a CEO is a goal for many executives, which once reached, feels like the pinnacle of accomplishment. Past experiences of others, however, shows that this is not a longâ€”term position. The key, therefore, is being mentally and emotionally prepared. Rehearsing, reflecting, being resilient, and rebooting will faciliate the transition. Knowing that no one is immune from upsets in lifeâ€”and that upheaval and transitions come with the territory of being a CEOâ€”can help executives be better prepared to stage a comeback of their own making, while redefining success on their own terms.