Tag Archives: successor

Leadership Transitions – The Power of a Date

Kelly LeCouvie
Kelly LeCouvie

Are you developing a successor for your position, with the objective of transitioning out in the foreseeable future? If so, you have likely experienced the apprehension and emotion associated with that process. We have worked with leaders who identify a transition date and others who have not, with successful outcomes in both scenarios. That said, we encourage you to think about identifying a specific transition date for a number of reasons:

  • It sends a message to your successor, your employees and other stakeholders that you are serious about the transition;
  • It motivates you to develop key milestones in the process that need to be met in advance of that date;
  • It prompts your board to set expectations for progress reports along the way, and provides you with a source of feedback on that progress;
  • It helps you envision and plan for your role beyond that date – perhaps as board chair, as a retiree, as a leader in a new capacity;
  • It sets in motion a variety of other decisions throughout the organization that help prepare for the transition.

Setting a transition date is definitive, and makes it very real, and perhaps a bit scary. Yet if it doesn’t feel real to those around you, the energy invested in the transition might be insufficient to meet your expected outcomes. This might be the biggest business decision you ever make; setting a transition date is one of many steps in ensuring transition success.

Share

IT’S NOT JUST FAMILY SUCCESSORS THAT FIND IT TOUGH TO FOLLOW FOUNDERS

Craig Aronoff

Research pointing to the fact that family businesses outperform their non-family peers have also shown that performance in subsequent generations of family businesses does not tend to be as strong as it is in the founder generation.  In a Forbes Magazine piece pointing out the challenge confronting Steve Jobs’ successor Tim Cook, Scott DeCarlo observes that successors to iconic company founders generally don’t fare that well.  During Bill Gates tenure as CEO of MicroSoft, for example, the company’s annualized total return was 58%.  In the five years after he left the CEO slot, the company’s annualized return was –11%.    Bernie Marcus at Home Depot had an annualized return of 47% but his successor managed “only” 25%.  Other examples are also given.

It is not just the next generation successors in family businesses that are challenged by the record of their business’s founders.  All successors face that issue.  Being compared to one’s parent, however, can make the comparison seem more dramatic and even painful.  Being a successor is no easy job.

Share