Harvard Business Publishing

Thanks Marshall for sharing such a valuable topic. It was interesting to read the fact that it is highly likely to have “comeback” phenomenon if you are the founder of the company or the person largely credited with the company’s success. I can see this in the real world and can totally relate to it.

I started an employee network group at my current organization last year. After running it successfully for one year, we rotated the leadership to two new individuals, who have been participating in all of our sessions and volunteer activities. In addition, I kept few responsibilities to keep contributing to this group and act as a board member to the new leaders to provide them support when needed. This process worked really well in my case. What I noticed from the personal experience that it was hard to make the decision to let go. However, keeping me involve in some way and being in the position of board to ensure the vision of this group remain intact, helped me make this decision comfortably. Moreover, it was seen as a very positive step in the eyes of my management.

Marshall, following are few questions I like to ask you:

Isn’t succession planning requires the existence of servant leadership skills in the leader?
In addition, how does a leader decide who to be a successor, if he or she has a team of highly effectively people and the choices are more than one?

Thanks
Kashi
Capella University
kashif@kashifahmed.com

Since you seem to be fond of quoting Eastern philosophy in your writings, I will share with you how I perceive a CEO's executive life using traditional Hindu philosophy.

According to Hinduism, a man's life consists of four stages:

The first stage is that of the student.
The second stage of life is that of householder.
The third stage of life is that of retirement.
The fourth stage of life is that of the ascetic. This is basically a rejection of life and its attachments in the pursuit of salvation. A person can enter into this stage of life at any time after retirement.

In a similar fashion, a CEO's life can also be divided into four stages:

The first stage is that of a student, which involves academic studies as well as and on the job training.

The second stage would be that of a corporate life, married to a company and progressing both in experience and maturity over several years. There could be more than one corporate marriage due to changes in relationships.

The third stage would be that of corporate retirement, when his able successor is mature, capable and ready to take over the leadership of the company.

The fourth stage of life would be that of the corporate ascetic. This would be basically less focused on his own corporate achievements, professional biases and beliefs and more focused on contemplating on the valuable lessons learned from his experiences and that of others in the business world, all in the pursuit of corporate salvation. A person can choose to enter this stage of corporate life at any time after retirement.

Does any of this make sense?

Raj Bose
Faculty - University of Phoenix

Hi Marshall,

Confidently stated, this article may be understood in the context of 'personal sacrifice'. How do founders, innovators, or movers and shakers get to their sought after position? The answer is personal sacrifice. It is not simply just the colloquial cliché known as "blood, sweat, and tears" that gets them there. No, it is the countless hours of grinding out a vision for a brighter future.

Reaching such a vision requires an idea, passion, and an ability to handle and embrace solitude. As a vision grows, gaining momentum, trade-offs frequently become a "theme of the day". Hard decisions prop up at every corner, forcing a leader to constantly choose. More often than not, a successful person's choice will be to work longer with increased intensity. In effect, such individuals push until either the job is done or they collapse. Not only do such visionaries jeopardize their personal health, they also sacrifice globs of treasured time with their spouses, children, and extended family. Unfortunately for many successful key players and founders, 365 days of pounding the pavement, whether in work or thought, is an irrevocable reality.

As a business grows and its demands increase, skilled players must be brought in to provide a support structure and get the job done. If this did not happen, the originator would become overwhelmed beyond their own human capacities. In the process of incorporating a team and forming a company, the politics of people, particularly how they interact with one another while getting the job done, steams to the forefront of daily hurdles.

Noam Wasserman was and continues to be right. In his article "The Founder's Dilemma", he highlights a distinctive conflict most founders face as a company grows to a point where outside professional assistance is needed to get more dialed in. As a result, a common question uncomfortably surfaces. Does the founding CEO want to be rich and in complete control of every aspect of the business or does she/he desire to be wealthy, placing more trust and responsibility with investors who may possess a more advanced understanding while having the CEO’s best interests in mind? If we understand Mr. Wasserman correctly, it may be plausible to assume and suggest that the former part of the proposed question logically implies an unresolved conflict that may be damaging the executive officer’s behavioral performance. Surely, anyone who outwardly exhibits a need for absolute control in every instance is acting unprofessionally. Such a situation requires careful attention and a proper course of remedial action. Conversely, the latter part of the question suggests that the CEO has a more flexible outlook for the forward motion of the company.

Taking a company up to the next rung on the ladder can be extremely difficult if the founder has a tendency to dominate and monopolize every topic and subsequent conversation that pertains to the company and its dealings. It is important to note, however, that this kind of behavior is not uncommon and unwarranted, especially considering the fact that the founder has been so successful in making an enormity of correct decisions for forward movement. Still, take a very deep breath and address the unavoidable reality that key players will not continue to follow a leader or founder who professes to be an expert in every facet of life, whether business or personal. If such behavior persists, the "know-it-all alarm" will begin to jangle and rattle in the minds of key players. If the alarm continues to dance uncontrollably, the team may collectively decide to slam their fist down, disabling it and thus relieving the constant noise.

It may follow then, that, as more people join a company, there are an increasing number of organizational issues and behavioral concerns that affect margins, bottom lines, and overall productivity. Unfortunately, a founder who has dedicated an incredible amount of time to creative endeavor is likely to have deficits in the “people skills” department. This is not an attack on character. Quite the contrary, it is a logical conclusion based on a lack personal experience. The ability to work with and personally understand a diverse population of human beings is more than a simple exchange of information. Instead, it requires and may be understood as a practiced and refined form of art.

When should a front-running CEO be prepared to pass the baton? In terms of personal experience, I do not know and cannot answer because I have not been out there. I do know that a worthy and suitable successor is one who knows, emulates and challenges his or her mentor in constructive ways.

Thank you for the opportunity to respond. I look forward to next week’s article.

Matthew R. Polkinghorne
Alliant International University
MGSM: Special Topics Friend

Kashi - Thank you for sharing your personal example. I think that 'letting go' is hard for all of us - in different ways - not just CEOs. I agree that effective succession planning requires servant leadership skills.
I am not an expert on selection - so I will pass on this question.
Raj - I love your connection of CEO succession to the four stages of life. I wish that we reinforced the positive side of your post more in our culture. Perhaps people could then 'let go' with more dignity.
Matthew - Thank you for this thoughtful post! You are so right. A founder - even more than a non-founding CEO - is very attached to the company - and must face the tough reality of succession.

This article strikes a cord as my dissertation was on the phenomena of leadership succession. The most common cause of failure in succession that I found was the reluctance of the departing CEO to actually depart. There are innumerable cases of founder interference in the professional CEOs assumption of authority with devastating results on performance and morale. Either stay or go, but if you go you can't be a bad check and keep bouncing back.

Michael - I love your 'bad check' analogy!