Sabotaging Your Succession: How CEOs Unwittingly Undermine the Transfer of Power

If you are the CEO of a closely held or family business, you’ve likely thought about succession—who will replace you as the leader of the company, and when. Simply thinking about succession though, isn’t enough. You need a detailed plan—and you need to be honest with yourself about what comes next.

Too often, I have seen CEOs unconsciously sabotage their own succession. Handing off your business to the next generation is not an easy process. I’ve worked with dozens of CEOs over the years that failed to be honest with themselves prior to succession, and wound up creating untenable situations for their families and their company.

In one case, a CEO invited her son and daughter-in-law into the business but didn’t trust them, so she micromanaged and often usurped her son’s authority. She had an issue with respecting boundaries—she treated her son like a little boy, even though he was a grown man. Furthermore, she treated her daughter-in-law like her own child. This story didn’t have a happy ending, as the couple ultimately left the business.

“Pondering how to move forward must be done years—even decades —ahead of your planned retirement.”

CEOs can sabotage their own successions in a variety of ways. Here are 4 of the more common reasons I see in my practice that can derail your succession plans.

Realizing you’re not ready. While the concept of retirement may seem great, you’ve spent your life building your company. It’s an integral part of who you are. Leaving your work behind can create an existential crisis about what is next in your life. What will be your purpose without work? Pondering how to move forward is important. But it must be done years—even decades —ahead of your planned retirement.

Lack of trust. Parents always have a tough time seeing their children as actual adults. It’s human nature, and it shows how much you love your child. Failing to recognize your children as adults, however, means that you see them as incapable of running your business, even as you are about to hand it over to them. Failure to differentiate family from business can undermine your successor—and hurt your business going forward.

A clash of visions. Each generation has their own view of what the future should look like, and how to get there. If your successor’s vision does not match your own, tension and division will mar the succession planning process. As the person who built your company up to where it is today, handing off control to someone with a plan you’re not completely on board with can be difficult—and it can derail the succession process quickly.

Failure to address concerns. I have worked with CEOs who confessed to me in the months prior to a planned succession that they lacked confidence in their chosen successor—but have failed to address the reasons why with their successor. Having concerns about the ability of the next CEO of your company is normal, but those concerns must be addressed long before the succession, or they could lead to chaos in your organization.

It takes a very generous spirit to effectively execute a transition of power. The best way to ensure a successful transition is to put your ego away and clearly see the reality in front of you. Sometimes moving on means moving out of the way and preparing yourself for what’s next.