Bob Iger is a highly respected leader who served as CEO of the Walt Disney Co. for 15 years. He is also a great writer, authoring the terrific book The Ride of a Lifetime. I not only enjoyed reading Iger’s book, but it also helped me lead better.
In 2020, to much acclaim, Iger retired as CEO of Disney. However, just two years after his retirement, Disney’s board rehired Iger as CEO. Iger was needed back at Disney because he apparently failed at his most important job: succession.
What happened at Disney is not unusual. The business landscape is littered with high-performing companies losing their way after a CEO retires. When this happens, it is always the fault of the departing CEO. Losing its leader is an organization’s most significant risk, and the CEO must mitigate that risk while still employed and simultaneously leading for great results.
Unfortunately, many leaders are not concerned about the organization after they leave, and some don’t mind the organization struggling a little when that time comes. It makes them feel irreplaceable.
Our team at Correct Craft has accomplished some impressive things during the past 16 years, but the most important part of my legacy will not be those accomplishments; it will be how well the team does after me. I have no imminent plans to retire, but succession is always on my mind. I’ve stated publicly many times that if our company struggles after I leave, that’s on me.
Many believe succession is easy — just promote someone into the role or hire an outsider. They wonder, how hard could that be? It’s more complicated than most think. Many don’t understand the weight of responsibility a leader must bear, or the many nuances related to leading well. Finding the right person to succeed a leader is tougher than most realize.
Additionally, a company is almost always better off — except in a turnaround situation — if the new leader is already in-house. A focus on filling the job in-house limits the number of potential successors but also allows the organization to ensure there are candidates ready when a change occurs.
Here are some thoughts about what leaders, not just CEOs, can do to prepare for succession.
Acknowledge the issue and accept responsibility No matter how immortal a leader may feel, there is a time when a new leader will be in their role. Leaders should accept that reality and take responsibility for ensuring the organization’s long-term success by focusing on succession.
Develop your team Be sure to identify any skill gaps with potential leaders and work hard to fill those gaps with good training. There are a lot of great executive education programs that can prepare leaders for a bigger future role.
Explain your thinking I try to not just give direction to our leaders but also explain the reasoning behind my decisions. I want to take advantage of every teachable moment to prepare our team for the future.
Give future leaders P&L responsibility Leadership gets very real when a leader has responsibility for a profit-and-loss statement they must defend each month. Owning a P&L statement allows future leaders to feel the pressure of producing tangible results; this may be the best training.
Delegate the difficult things For most of my career, I have been the one to do the difficult tasks. I am OK with that and even find the challenges energizing. However, if I don’t delegate some of our biggest challenges, I am cheating those who come behind me of a chance to learn. We recently had a big challenge — a tough one I would typically handle myself with both relational and legal implications. However, I delegated the challenge by telling one of our up-and-coming leaders that handling this situation was way better than any class. I want to stretch our team; it’s the best way to prepare them for the future.
Be tough Most who have worked with me would say I am a pretty easy boss: no micromanaging and high affirmation. But sometimes being a nice boss is not the best thing for an up-and-coming leader. I know that me being tough on them is the least of the challenges they will face as a future leader.
To be clear, this applies to all leaders, not just CEOs. If you are a leader at any level of your organization, an important part of your job is making sure the business can succeed after you. One thing we do at Correct Craft to make this easier is providing assurance to those nearing retirement that we will allow them to leave on their timing if they are willing to give us plenty of notice. I usually ask them to provide a year’s notice.
As a leader nears retirement, their primary responsibility switches from getting results this month, quarter or year to ensuring the company has great results for years after they are gone. Whether you are the CEO or any other leader at an organization, you cannot consider yourself successful if the organization struggles after you leave.
Bill Yeargin is the CEO of Correct Craft and the author of five books, including the best-seller Education of a CEO.
