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“The best thing to give an outgoing leader is a suitcase.” While most boards have received some variation of this advice when transitioning from a long-time chief executive to a newly hired leader, the Leap Ambassadors Community has found that a clean break isn’t always the best advice.
Tess Reynolds and Alexa Cortes Culwell were wrestling with this question at New Door Ventures as Reynolds prepared to depart after serving as CEO for 16 years. Before Omar Butler was named as the new CEO, Cortes Culwell, a board member at New Door Ventures, turned to the Leap Ambassadors to ask for insights, experiences, and pitfalls to avoid during the transition.
Committed to ensuring that New Door Ventures continues to thrive during this season of transition, Cortes Culwell specifically asked, “Should the board offer Tess a small contract so the new CEO can benefit from her wisdom and experiences after her last day of employment? What advice do others have for making such an arrangement work?”
What’s right for any one organization depends on a few factors, counsel Leap Ambassadors. Outlining an ongoing role for the outgoing leader isn’t easy, but thoughtful preparation increases the likelihood of ongoing success.
A transition should always involve a period of overlap so the outgoing leader can transfer knowledge and relationships to the successor, but it’s never easy to follow an iconic CEO. Chip Edelsberg, former CEO of the Jim Joseph Foundation, confirmed Reynolds’s inclination not to be present on the successor’s first day: “It is going to be challenging for the new CEO to step out of Tess’s bright, broadly-cast shadow; having to do so literally in Tess’s presence I think would be uncomfortable and not a desirable way, from an optics point of view, to begin one’s tenure.” Former Latin American Youth Center CEO Lori Kaplan, on the other hand, felt it’s “important for the outgoing CEO to greet the new CEO” and suggested that there’s no one-size-fits-all solution.
When an outgoing leader is available and willing to play an ongoing role after the transition, several factors should play into the decision:
In “Making Founder Transitions Work” Bridgespan found that, among organizations whose founders stepped down voluntarily, three out of five extended the founders’ role in some way. By the measures of higher revenue growth, reported success of the transition, and successor tenure of more than three years, “The most successful leadership transitions paired an internal successor with an extended role for the founder,” Tuomala, Yeh, and Smith Milway wrote. That’s a powerful argument for boards to invest in internal talent development and engage in ongoing succession planning long before the CEO decides to leave.
Kaplan was succeeded by Lupi Quinteros-Grady, a strong, long-term member of the leadership team, at the Latin American Youth Center. She continued in a volunteer capacity, which worked well, because Quiteros-Grady’s learning curve wasn’t as steep, staff anxiety was minimal, and staff loyalty easily transferred to the new leader. Tiffany Gueye shared her experiences as both the incoming and departing CEO at BELL in Bridgespan’s “Groom to Grow.” In both transitions, Bell’s secret to success was grooming internal talent. (For additional insights from the Leap Ambassadors Community into the importance of long-term CEO succession planning, see Graceful Exit: Succession Planning for High-Performing CEOs.)
When boards believe—and the incoming CEO agrees—that inviting the outgoing CEO to continue in some ongoing role will be beneficial, there are several conditions that can help make it successful:
What’s the bottom line? Don’t go straight for that suitcase. Whether an outgoing leader should stay or go after the transition depends on several factors. And while staying presents challenges, it can be done well with thoughtful preparation.
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