Managing leadership transition

Some of my clients have evolved from startup to growth stage.  They underwent a quiet turmoil in the process and are now grappling with a new set of issues. The prime issue being founder giving way to professional CEOs – some on their own initiative, others have been mandated by VCs that came on Board. Just as the business evolves, leadership too will have to. Some like it, others don’t.  But once you have broad-based your Board and let in other investors, you ain’t got too many choices. Founders may have to make room for successors in the larger interest of the enterprise. 

Such transitions are not always easy; in fact they are far too complex. Exchanges of responsibilities contain any number of challenges, primarily because they happen in real time with no pause in the or­ganization’s activities. The exiting executive is in the best position to direct events so that newcomers can avoid the usual “perfect storm” of tests: an overly stimulated imperative to jump into the job with both feet, ready for action; a sense that the appointment carries a change mandate; and an insufficient appreciation of company challenges, culture, and constraints. 

Indeed, the last 90 days of the outgoing executive’s tenure may be as critical to a successful transition as the first 90 days are for a newcomer.  In some of the companies where I’ve been associated with, a productive exchange between the two executives significantly diminished the factors that could have derailed the successor’s performance. 

Here I list out some of the imperatives. 

  • The former CEO should provide sufficient space for the new top gun to fully assume his or her responsibilities. Never second-guess or “hover” the incumbent because that erodes his authority.  

  • Let newcomers be clumsy in their first steps. An elevation to leadership roles (from within) often is unsettling to many, especially if they are replacing someone of stature. They are nervous, can’t let go of their old responsibilities or fully take on their new ones, perhaps out of a fear that they’re not worthy of the job. Make it easy for them to fit in.

  • Transition protocols may work well with tangibles like documents, keys, codes, petty cash etc.  [How else HR managers show performance 🙂 ]  The trick is in transmitting the talent assessment, culture, attitudes, inferences and tacit knowledge of each hub and spoke in the wheel the leaving CEO has pictured.  I am yet to see a format for that. 

  • Help the incumbent form his own ideas.  Never impose what you felt was right.  Let him form his own opinion on gaps that needs fixing by adding talent or developing it from ground up.  Exchange notes for the first few weeks or even months.  Let him recognize the “power nodes” or “the chart behind organization charts”.  Have him forge relationship with the company board all by himself.  Handhold him only by exception and strictly on demand. 

Have you ever gone through the motions of leadership transition in your enterprise?  What unique aspects did you notice?  How did you manage it?  I would love to hear from you.

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