Being a Chief Executive Officer or any senior executive leader in today’s economy is very difficult. Leaders must demonstrate an effective combination of the so called “hard and soft” skills. In other words, leaders are expected to take responsibility, aggressively pursue business, be flexible to market changes and offer significant project leadership strengths. In addition, they must build and lead strong, collaborative teams, be creative and have good listening skills.

However difficult it may be recruiting and selecting a candidate with all of the above credentials, another secondary challenge may arise when transitioning to this new leader. This challenge occurs more frequently when a long term CEO wishes to stay and assist with the orientation of a new incoming CEO. There are at least three key problems that I have encountered in this situation. These include:

1. The challenge of letting go – whether the CEO will admit it or not, most leaders, especially those who have been with a firm for a long period, will have difficulty letting go of the reins. This is especially true if the CEO is not happy with the employer’s new choices. Often, this CEO will not realize there is a problem until they are right in the midst of the situation.

2. Employees will habitually turn to the former leader – in spite of direction to do otherwise, if a former CEO continues his/her presence, employees will typically and habitually turn to the former leader for direction and advice. It takes a confident individual to help them refocus on the new leader.

3. New CEOs will be challenged to learn and lead – unless the former CEO is a good coach/mentor and respects the new leadership style, it will be difficult for the new CEO to get a quick grasp of key business issues. This is especially problematic if new goals and objectives are different and/or contradictory to that of the former CEO.

What can be done to prevent and/or overcome these types of CEO transitional challenges?

Consult with the CEO – it is important to consult with a former CEO with respect to credentials he/she sees fit for a new candidate. However, involving the individual in the search process itself creates problems such as bias in particular. Additionally, the organization may be looking at different skills the former CEO doesn’t possess and/or doesn’t understand which may create problems.

Create a new physical space – moving the new CEO into the leader’s office and moving the former CEO to a new space provides the best signal of the leadership change. Keep in mind this will also be difficult for the former CEO. Be sure to continue a sense of respect for this individual’s contributions as the physical move cannot be seen as a demotion.

Clarify roles and responsibilities – determine and communicate which responsibilities will be transferred immediately and who to contact for which decisions. Determine a timeframe for a full transfer of responsibility. Ensure frequent meetings between both parties to help ensure a smooth transition and to assist the departing CEO to effectively adjust to the change. 

Communicate a timeframe – employees, customers and vendors need to know what’s what. Communicate the transition strategy and the timeframe. Encourage upward communication and provide consistent answers to employee questions and concerns. Get out and walk around both independently and with the former CEO… demonstrate a partnership when you can.

Celebrate the departure – keep in mind that the former CEO made a significant contribution to the employer and has typically developed strong relationships with employees and owners. Create a celebratory event to honour their contribution and to officially transition the leadership. 

Recruiting and selecting a highly qualified CEO in today’s market is difficult enough. However, if the former CEO stays in place as part of the orientation program it can create its own challenges. Working through this style of orientation takes more work, but also has its advantages. Be wise, be careful and be strategic.