Memo to the CEO

1
Memo to the CEO
Developing Your Successor

• Marshall Goldsmith
• Marshall_at_MarshallGoldsmith.com
• www.MarshallGoldsmithLibrary.com

2
Goals

• Discuss the unique challenges faced by CEOs when
  it is time for them to let go.
• Develop strategies to help CEOs develop their
  successors.
• Generate ideas to help the future CEOs
  effectively manage the transition process.
• Develop concepts that are helpful for CEOs,
  future CEOs and HR professionals.

3
Why internal CEO succession is so important

• Costs of external succession can be huge
• Potential for external succession failure is high
• The message to the company about leadership
  development is critical
• Knowledge of the company and industry may take a
  long time to acquire

4
Assumptions about the present CEO

• Dedicated to the company
• Loves the job
• Loves leading people
• Very positive self-image
• Wants to leave a legacy
• A human being
• Has an ego may feel threatened
• Is not devoid of self-interest
• Is emotionally involved
• Has feelings about potential successors
• Wants to do what is right for the company

5
The focus of this discussion

• Behavioral issues (not technical, functional or
  strategic).
• The human drama.

6
The human drama of transition seldom discussed
topics

• Self-interest
• Ego
• (God forbid) Feelings

7
Breaking up is hard to do

• What fears might CEOs have when it is time for
  them to leave?

8
Some common fears

• Becoming a used to be or invisible
• Giving up status and power
• Making less money (not the amount the
  direction)
• Giving up benefits
• Lack of meaning, contribution or happiness
• My successor is no good - my successor is too
  good
• Alienating the non-winners
• Being a lame duck if the announcement is made

9
Learnings from creating a great rest of my life

• Wealth will be taken care of competitive drive
  (with money as a measure) may not go away.
• Relationships are key.
• Health is a wild card.
• Meaning is critical.
• Contribution relates to legacy.
• Happiness depends upon the person there is no
  formula.

10
What are the classic problems in CEO succession?

• What can go wrong?
• Why does it go wrong?

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Avoiding classic traps in succession

• Not quite ready
• Stereotyping the potential successor
• Over-valuing personal strengths under-valuing
  personal weaknesses
• Taking input from competitors or direct reports
  at face value
• Denying ego
• Denying the impact of friendship and personal
  connection
• Cognitive dissonance with personal mentees

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Developing a great rest of my life plan

• Getting real offers
• Accepting that drive and ambition dont disappear
  with retirement
• Wealth
• Health
• Relationships
• Meaning
• Contribution
• Happiness

13
Getting ready for succession

• Communicating the dramatic difference between CEO
  and other positions
• Changing to a focus on future needs not just
  present requirements
• Helping deal with competitive issues
• Getting the peers ready
• Ensuring that a new team will support the new CEO

14
Getting ready for succession

• Determining behavioral changes needed for the CEO
  role
• Achieving needed changes in behavior
• Looking at future needs for the company taking
  the company to the next level

15
Coaching the future CEO

• Combine positive acceptance with honest
  assessment
• Determine key behaviors for change
• Involve key stakeholders
• Ensure follow-up and measurement

16
Advice for the successor

• Get over ego issues dont personalize this
  process
• Face the fact that this may be tough for your CEO
  and even harder for your peers.
• You will have to watch what you do and say in
  every meeting for the rest of your career!

17
Advice for the successor

• Be a good winner
• Demonstrate humility
• Help the present CEO in any way that you can
• Avoid any potential me vs. him or her traps
• Realize that you will be played by others
• Your jokes arent really that funny!
• Try hard and get better at what needs changing

18
Summary what needs to be in this book

• For the CEO?
• For the successor?
• For the HR professional?