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?