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How Departing CEOs Can Pass The Torch To Successors

Transferring power is a tricky business, but it can be done well. Here’s how outgoing CEOs can help.

How Departing CEOs Can Pass The Torch To Successors
[Photo: Flickr user sol33]

It isn’t uncommon in planned CEO successions for an incumbent’s tenure to overlap a bit with a successor’s. The idea is to create a smooth transition, but that doesn’t always happen. While it’s the newcomer’s responsibility to get to know the organization they’re stepping into, it’s just as important for the outgoing exec to manage the process. Here are a few ways to do just that.

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1. Get Everyone To Play Their Part

When a top leadership position changes hands, it doesn’t just affect that one role. For starters, the company’s board has to take on the task of hiring the right successor and planning for continuity after the incumbent’s last day. The head of human resources needs to coordinate the logistical steps of the transition by making key introductions and advising the new leader on the organization’s culture. Senior managers also have to prepare their departments for change. And last but not least, the sitting CEO needs to direct the handover, making sure everyone who can give support does.

CEOs are hired into their roles in the first place because they’re good at mobilizing others to behave in certain ways and think creatively. Rather than take a backseat, the outgoing CEO should muster those skills to help the new leader win support. Change isn’t easy, but the outgoing leader can reduce resistance by creating an atmosphere where the organization doesn’t hand over just the trappings of leadership to its new head but genuine confidence as well.

2. Transfer Control Gradually

The search for the new leader begins after the organization decides what skills and expertise it’s looking for and whether to promote from within or bring in somebody new.

If asked to do so, the CEO must work with the board to help choose her successor. She should think of those efforts as part of her own legacy, and take them seriously. It’s also important for the incumbent to understand where in the transition she’ll be most useful. For example, it may be best for the CEO to be the primary adviser to her successor, offering counsel while pointing out areas where the new exec will take the reins. In those areas, the outgoing CEO needs to make sure managers start coming to the new CEO for direction, not giving orders until her very last day. It can be tricky figuring out how to maintain and relinquish control in the right proportions, but it’s crucial for passing the torch smoothly.

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3. The Departing CEO Needs To Stay Self-Aware

Giving up power can be difficult on a very personal level. In addition to the time and effort it takes to keep a company running day-to-day while navigating a major transition, the outgoing leader also needs to keep an eye on how his emotions might impact his behavior. That takes self-awareness and self-management.

Without those traits it’s hard for the new CEO to work productively with the departing one. Even though that relationship is temporary, it’s essential to a successful handover. The last thing any company in the throes of a CEO transition wants is contradictory directions and split loyalties among managers.

4. The Board Must Declare Victory At The Right Time

Succession has three phases: defining the job and vetting internal candidates, searching for external candidates, and the transition process itself once a new CEO has been hired. If the first two phases demand the sitting CEO’s practical skills, the third draws on more direct human, interpersonal ones. In some ways, it’s harder to get right.

During phase three, the CEO has the unique responsibility to create supportive conditions and coax the new leaders to act in ways that warrant and encourage that support. In other words, no one has as much influence on the outcome as the departing CEO.

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So when is the time to declare the process a success? Getting the right candidate to accept an offer is the first success that marks the end of phase two. But the transfer itself can’t be called a victory until the new leader has settled into the CEO position and earned the loyalty of the company’s managers. And no one is better equipped than a departing CEO to see to both those successes–and not step away for good until they’re achieved.

Dan Ciampa is a senior adviser on CEO transitions and the strategy, operations, and cultural changes that follow. His latest book is Transitions at the Top: What Organizations Must Do to Make Sure New Leaders Succeed, with co-author David L. Dotlich.

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