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Memo to the CEO

Memo to the CEO. Developing Your Successor. Marshall Goldsmith Marshall@MarshallGoldsmith.com www.MarshallGoldsmithLibrary.com. 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.

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Memo to the CEO

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  1. Memo to the CEO Developing Your Successor Marshall Goldsmith Marshall@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?

  11. 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

  12. Developing a ‘great rest of my life’ plan • Getting real offers • Accepting that drive and ambition don’t 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 – don’t ‘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 aren’t 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?

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