Some years ago, I [Marshall] was coaching the CEO of one of the world’s largest pharmaceutical companies. This was back in the day when CEOs had to retire at a certain age. I asked him a seemingly obvious question: “If you knew that your company was going to completely change in six months—new customers, new shareholders, new everything—would you plan for it?”
He looked at me strangely, puzzled that I would ask such a stupid question. “Of course I would!” he laughed. “Any responsible leader would plan for such a massive change.”
“You know that you are going to retire from this job in six months,” I countered. “How much time have you spent planning for this eventuality?”
“None,” he sighed.
I then said, “Your entire life is going to change in a few months. The way that you spend every day will be completely different. The people that you meet every day will not be the same people. Your work may be totally dissimilar to what you are doing now.”
I continued, “Your company is very important but so is your life! Maybe you should start thinking about your own future, not just the future of your company.”
Here are our suggestions to you—for your own CEO exit strategy:
• Continue caring about the long-term strategy of your company. Start caring about the long-term strategy for your life.
• Do not “overstay your welcome” as a CEO. Better to leave a year too soon than a day too late. Leave when the board is asking you to stay. If you wait too long, they may be asking you to leave. Think about your legacy. Leave at the top, not at the bottom.
• Do your very best to develop great successors. The choice of the new CEO will be up to the board of directors, not you. You should do your best to give the board great options.
• If you have an exciting future planned for the rest of your life, you will probably leave with dignity. In fact, you may look forward to departing. You won’t become one of those CEOs who hang on to the job with white knuckles and can never let go.
• Start working on your exit strategy now. There are three key variables to consider: 1) making sure that the company will be in the best possible shape when you leave, 2) working to develop a great successor and 3) planning for a great rest of your life. Many CEOs who we have met get outstanding scores on the first, mixed scores on the second and dismal scores on the third.
• Invest significant time and energy in planning your post-CEO life. Money will probably not be a major variable in your decision. Consider options that meet two key criteria: 1) the work will be very meaningful to you, and 2) you will love doing it. Only you can define what happiness and significance mean to you.
• The “just taking time off” option will probably not work past six months. You will quickly tire of playing mediocre golf with old people in Florida while eating chicken salad sandwiches and discussing gallbladder surgery. You cannot go from doing something that is very meaningful to doing something meaningless.
• Think of investing in your CEO life the way a venture capital firm thinks of investing in a company. There has to be an exit strategy. Dan Levitan, CEO and co-founder of Maveron, a very successful VC partnership, taught us this novel way of thinking. It is an obvious way to think as a VC investor. It is also a underappreciated way to think as a human being!