George Bernard Shaw once said, “"People who say it cannot be done should not interrupt those who are doing it.”
Yet, there is a time for CEOs to recognize that it is time to reflect and recognize their own leadership limitations. Self-reflections are always difficult.
Even so, too often, even before it is evident to his/her stakeholders, leaders fail to admit and conclude it’s time to exit. Many fight it. These CEOs stonewall progress and the best interest of the company that they lead. If a CEO leads a public entity, it places the board in a position of conflict and with it, no winners likely emerge.
The poster child for these observations are public company Founder-CEOs who too often have their ego tied up into the business (it’s my baby) and believe that no one can run the business the way that they can. Certainly, many CEOs whether founders or hired professionals, also are challenged by ego and a will to win.
Clearly, CEOs are not best suited for every leadership challenge. The mélange of gearing, competences, experiences and emotional intelligence are unique to every leader. To effectively lead a company today means that the leader must possess the “right” blend of targeted skills, experience and competences to be applied at the “right” time to address the challenge of creating value at each cyclical inflection point.
Where many leaders fail is in assuming that they are the best to lead under any circumstances and thereby don’t fully recognize their own shortcomings. And, too frequently, their boards, while recognizing the issue, fail to be proactive in addressing the need for change.
We believe the best CEOs are emotionally secure, confident without being ego centered, and understand their role as a liaison to value creation while constructing a solid bridge to the next generation of leadership. They know that among their principal priorities is to create value in the present and prepare the company for success in the future, departing with their company in a better situation then when they arrived.
To be effective, these leaders are keenly aware of their limitations and recognize that their specific strengths are right for a point and period of time, but not for all times. Sometimes, even the best of CEOs get caught between knowing that it’s time to depart and meeting their commitment to finish what they were recruited to do.
In these circumstances, beyond “coaching the CEO,” the board has a responsibility to the shareholders and to the broader community of stakeholders to assess the company’s state and determine whether their CEO is qualified to soldier on. This is tough duty for Directors especially if, as a board, they are not prepared to address succession.
Clearly, we live in a world of decisions at accelerating velocity. Markets are unforgiving.
If you are a CEO, we recommend being honest with yourself.
If you are a director, we suggest that very candid conversations are held regularly with your CEO about the leadership required and the depth and the development of the leadership team necessary to assure continuity to meet challenges going forward.
Clearly, there is “a time” for the CEO to exit. While painful, it is inevitable. None of us are leaders for all seasons. The sooner that a CEO recognizes and addresses that his/her time is running out, the less disruption the company and its board will face.
In our view, the CEO owes an honest assessment of fitness to lead. Those CEOs that are honest with themselves and forthright with their board are, by definition, true and selfless leaders.
When it is time, depart work with your board to provide an orderly transition. Don't hang on! Let your success be your legacy!
