I recently read that Vladimir Putin is considering staying on as prime minister in Russia once his presidential term ends. Russian law currently prevents Putin for serving as president for a third consecutive term. He could run again as president in six years (essentially sitting on the sidelines for one term). The announcement that he is considering the prime minister position indicates that he is not willing to step aside quietly. While the prime minister post in Russia has been largely ceremonial, I suspect that it will be anything but ceremonial with Putin, based on his strong-armed politics to date.

Putin’s inability to move on reminded me of many business leaders who have difficulty both sharing power and knowing when to step aside. Some leaders fail to groom adequate successors and others undermine their successors by staying on as chairman, quietly pulling the strings in the background. The airline industry for most of the twentieth century suffered from this inability to groom successors and may explain some of the troubles the airlines had well before the tragic incidents of 9/11. Though the airlines have suffered considerably since 2001, they were already in a downward spiral at the turn of the century.

Major US airlines including American, Continental, Pan American, Delta, and United had CEOs or founders who served for 35+ years, essentially through most of the regulated phase of the industry (1938-1978). They did not groom successors and did not prepare their companies for a vastly different competitive landscape. For instance, Bob Six of Continental Airlines ran the airline from 1936 until the early 1980s, when Frank Lorenzo staged a hostile bid for the company in the early days of deregulation. Continental’s performance declined precipitously and the airline went on to have a series of one-year presidents or CEOs over the course of a decade. It was not until 1994 when Gordon Bethune (with the considerable help of Greg Brenneman as COO) joined as the 10th CEO in 10 years that the company experienced a significant turnaround. They applied a streamlined “back to basics” approach that was aligned with the new competitive landscape in the industry. In essence, they applied a new strategy for a new time moving the company from last to first in terms of many service indicators. Ten years later, Bethune walked away after having groomed a successor and fundamentally repositioned the airline as a strong and viable competitor.

Bethune’s example is one that many business leaders should heed: knowing when and how to step aside. The long-term viability of a company or a country depends to some extent on the right leadership at the right time. Being willing to recognize the changes in the competitive or political landscape and then acting on them are keys for long-term sustainability. It is not easy to walk away from something that you have built, but doing so at the right time might preserve it.

MORE ON LEADERSHIP AND SUCCESSION PLANNING:
The CEO Within: How Inside Outsiders Are the Key to Succession Planning (Hardcover)
Growing Talent as If Your Business Depended on It (HBR Article)
Developing Your Leadership Pipeline (HBR Article)