How Can You Prepare Your Successor for the Top Job?
CEO Roundtable Intensive
- Brian Baker
- Cheryl DeMars
- Mark Gale
- Steve Johannsen
- Bill Mitchell
- Tim Size
- Denny Stapleton
- Derrick Van Mell
Three big ideas
- Not having a succession plan is “insane”
- Moving into the top job is hard: you need training, reflection and support
- Moving out of the top job is hard, especially for a “take charge” person
Question #1: What did you need to learn your first year as CEO?
Have a succession plan:
- Clear dates
- Assessment of incumbent’s and successor’s strengths and weakness
- Chart of responsibilities
- Short transition period.
- Not just for CEO and executives, but also for “pain” positions, i.e., those of critical importance.
- Make it a board responsibility
Have an emergency succession plan:
- Identify who will be “Interim President”
- Create and prepare a board committee for emergency succession that can be activated instantly
- Identify a search firm to help find an external replacement if needed.
Choose and develop successors:
- Look for younger managers with chutzpah
- Have a “spec” for the chief executive’s job
- Have potential successors create a long-term development plan
- Avoid successors who might retire soon afterwards.
- You need a deep bench.
Be ready for the loneliness:
- The “Sunday Night Factor,” i.e., feeling the pressure of all the decisions.
- The loneliness can be like “being in a dark room with a single light bulb.”
- Need to forge new relationships with the executives, who probably were long-time peers.
- You must have someone in the firm who can tell you you’ve screwed up.
- It’s very helpful to have a formal or informal advisory group.
- Outside board members should provide support, perspective and mentoring.
- Get the training you need.
- Accept that no one sees the full context of big decisions like you do
Retool your skills and expectations:
- The type of entity—ESOP, family business, collaborative, partnership—affects the CEO’s job.
- Having a strategic plan keeps the company moving forward during and after succession.
- Take time for soul-searching: What do I need to decide? What don’t I know? Etc.
- Accept that you don’t need to have all the answers, but the confidence there are answers.
- Assess how you spend your time: networking, reading, reflecting, etc.
- Make clear to everyone what the president does.
- Be clear on how decisions are made
- Accept that it takes time for a new CEO to develop trust with the managers and staff.
Question #2: What are the pros and cons of recruiting a CEO successor internally?
- There was strong consensus that internal promotion is best.
- Reasons to promote internally: protection of culture, reassuring staff of continuity, adhering to accepted long-term plan, existing internal and external relationships.
- But external hires are better if a major change is needed.
Question #3: What do you ask young managers who say they want to run your company some day?
- Why do you want this job? Don’t pursue promotion just because you think you should.
- Are you committed to customers and employees?
- Do you know what this job entails?
- Do you have that rare mix of technical ability and management savvy?
- Do you want to be part of the organization’s history and stability?
Sponsor: Thanks again to Michael Best for sponsoring these—and for sponsoring them through 2021!
Next topic: How has having to work remotely created opportunities? Other ideas:
- How many kinds of decisions are there?
- How many networks does a CEO need?
- How can you prove a business’s social benefit?
The Center for Management Terms & Practices is the standards body for general management. CEOs can delegate with confidence if managers in every department use the same best practices, language and tools. See The GMs Index and The GMs Toolkit.