“Leadership is about making other people better, first as a result of our presence, but in a way that lasts into our absence.”Frances Frei, Professor, Harvard Business School.
The true test of your legacyis what happens to the organisation after you leave. While at the helm, did you strengthenit in such a way that it could flourish through future changes? Did you equip it to succeed even after your departure? In a piece for theHarvard Business Review, Kimberly Wade-Benzoni describes the value of legacy building:
As a leader, leaving a great legacy is arguably the most powerful thing you can do in your career and life because it enables you to have influence well into the future – even after you are out of the picture yourself. Legacy building in business contexts can take the form of working to ensure the long-term viability of the organization and leaving it stronger, more productive, and more valuable than it was before.
Unfortunately, leadership succession is an Achilles heel for many companies. A lot of boards seem woefully under-prepared to plan leadership transitions. And Covid-19 is making the situation worse.
Unfortunately, leadership succession is an Achilles heel for many companies. A lot of boards seem woefully under-prepared to plan leadership transitions. And Covid-19 is making the situation worse. In a recent paper written by consultants from Bain & Company and Spencer Stuart, the authors mention that succession inertia is creeping in during the pandemic. The current uncertainty is slowing critical leadership decisions. Instead of putting it on the back burner, Boards and CEO’s need to put succession planning back on the top of the agenda.
So, this week, my message focuses on how you can preserve your legacy by initiating a timely succession plan.And why should you, as a leader, be the one to take on this responsibility?
1. Activate your own succession plan
While it might feel uncomfortable,it is theincumbent CEO who mustkickstart and lead the process of identifying and grooming their successor.Who isbetter poised to identify the kind of leader who can address future challenges while fitting into the company culture? Who else can keep the issue front and centre with the board, and motivate them to accept the right person for the job?
Somewhat surprisingly, managing your own succession also makes you a better CEO. In hisHBR article, Kenneth Freeman elaborates:
While you’re thinking about the skills your successor will need, you’ll also be dispassionately evaluating your own strengths and limitations. You may even identify organizational problems that, because of your temperament or talents, you aren’t currently tackling. Whether you take these on or decide they are best left to a successor, the very act of thinking in this way provides you with a particularly clear-eyed view of the company and its challenges.
2. Ego – a common trap
Despite the above advantages, some CEOs resist initiating asuccession plan. Instead of securing their long-term legacy, they get caught up with the short-termprivilegesassociated with their position.Freeman, who is the former CEO of Quest Diagnostics, shares his personalstruggle with letting go of C-suite prestige:
It’s hard not to feel like your identity is being stripped away when you relinquish the CEO title. I experienced that acutely this past spring when BusinessWeek was putting together its annual ranking of corporate America’s 50 best-performing companies, right around the time that Surya N. Mohapatra was preparing to take over from me as CEO. QuestDiagnostics was ranked 34, and though I can’t say I’m proud to admit it, I wanted my picture to accompany the business profile in the magazine.
I am sure any leader can identify with this all-too-human tussle – it is something most of us go through and learn to overcome. But leaders who fail to rein in their ego and allow it to lead the way endanger their own legacy.Driven by the belief that they’re irreplaceable, they put off succession planning and end up staying at the helm too long, placing their company in a highly-vulnerable position.
3. How long is too long?
To avoid sliding into a rut, every organisation needs a periodic shake-up in leadership. Yes, leaders can innovate and reinvent themselves – but there is a natural limit to how much one individual can change. Aside from a few rare exceptions, leaders become predictable with passing years, while the business landscape keeps evolving relentlessly. This eventually leads to a mismatch between the leader’s skillset and the strategic challenges before the company.That’swhen it’s time for a well-chosen successor with the right expertise to take over.
More and more chief executives are recognising this. As CEO tenures shrinkaround the world, many are choosing to self-initiate their departure instead of sticking around until they’re asked to leave. These leaders exit on their own terms – at the top of their game, and with their accolades intact.Not only does this secure their legacy at the company but also puts them fully in charge of writing their next act.
4. Leading a successful transition
Here are four principles to keep in mind:
- Look for a different skillset. As you start vetting potential successors, don’t look for another version of yourself. Once you’ve accomplished what you set out to do, what will come next for the company? What are the talents and skills needed to steer your legacy safely through the future? This is what you must focus on when combing through candidates. Resist the temptation to hire another leader exactly like yourself – that defeats the whole purpose.
- Prioritisefit. No matter what their expertise, the successormust be aligned with the company’s mission, strategy and culture.That’s why it makes sense to look for exceptional talent within the organisation.In his HBR article, Thomas Saporitoelaborates:Although it has been repeatedly proven that inside hires outperform outside hires, shareholder pressure and the allure of the turnaround expert mean that companies often make hasty succession decisions that undervalue “fit.” Any CEO candidate can have a sterling resume, but it is fit that will set a great CEO apart. Companies need someone who understands the future needs of the organization and the way it operates currently, both from a strategic standpoint and a cultural one. As companies lose sight of this, performance will suffer and CEO turnover will increase.
- Set up for success. To ensure that the chosen candidate is ready to take the baton when the time comes, the incumbent leader must start the work early. This includes coaching in critical areas of business and leadership, intensive strategy sessions, and sharing of knowledge and best practices.Introduce your successor to key stakeholders and help them develop a good relationship with the board. Work to create a positive environment in your team for the leader-to-be. By taking these steps over the course of a few years, you can minimise disruption and avoid shocks after the official transfer of power.
- Exit gracefully. A good leader leaves behind a comforting shadow at their organisation – which can make the transition difficult for an incoming CEO. Don’t add to their challenges by staying actively involved with the minutiae of day-to-day life at your former company.Resist the temptation to look back; it’s time to move on. If you’re staying on in the organisation, make yourself available in an advisory role – but without imposing your views on the new leader.Finally, be sure not to fuel the rumour mill by publicly sharing any doubts about your successor. As Krupp remarks:
Leaders should leave with only compliments for or silence about their successor; they should never confide their anxieties to those involved, especially their team and colleagues.
When a leader announces their resignation, the greatest measure of their success is the response of their team. If they’re sad to see you go but confident that the companywillthriveeven after the transition, then you’ve done your job well. Rather than promoting “no one can fill my shoes” thinking, leaders should aim to leave their organisation stronger, smarter and in the most capable hands. This is the best way to ensure that their legacy flourishes for decades to come.