Long-standing CEOs stepping down, board Chairs securing their replacements… succession at the top of the game is fraught with hazard, and it has the potential to derail a business.
A core function of Boards is risk mitigation. The risks associated with the succession are legion. Inevitably these roles are associated with powerful people and strong vested interests. When one of these key people announces their intention to move on, the smooth running of the special relationship can enter a period of severe turbulence. While it isn’t inevitable, it is predictable.
Navigating the handover phase takes great planning, plenty of goodwill and a large measure of personal flexibility on everyone’s part. The act of passing the baton is a complicated maneuver, even more so thanks to the time pressure involved in getting everything done in a timely manner, within the exchange zone. So how do you ensure everything is done right and the baton is passed smoothly?
It helps to compare baton changing to a 4 x 100 relay race, a great athletics event with drama and thrills at its heart. It’s also about much more than people running as fast as they can, a skill event as well a speed event. Much of the drama comes from the fact that a team with four good sprinters can, if they are clever, out-race a team who might all be better runners as individuals, winning the all-important battle of the ‘exchange zones’.
In running relays, the key to success is how much time the baton spends in the three exchange zones. Get those exchanges wrong and you can forget about winning gold, silver or bronze.
England are the current World Champions at the four-by-one-hundred relay. Our individual sprinters – the first leg, second leg, third leg and anchor – were not the fastest. None of them even made it to the semi-final of the individual sprints. But they won the relay race in style thanks to their handovers, thanks to the baton traversing the exchange zones well. It was no accident. The team practised their exchanges over and over again. They practised them until they were the best, most proficient baton-exchangers in the world.
If only Boards took passing the baton of CEO and Chair this seriously. If only organizations recognized the dangers of botched handovers and batons dropping during those critical transitions involved in Board succession.
In relay races the problems of the exchange zone are physical and mental. For Boards the problems are mental, emotional and commercial. In relay races, winning takes hours and hours on the track practicing. In CEO and Chair successions it takes hours and hours of exploratory conversation and honest dialogue, setting aside preparation time well in advance of the actual handover.
Skimping on those hours on the practice track means there’s no way relay runners will deliver a gold-winning performance. Rationing time on direct, honest conversations around the Board table will also fail, not delivering high, ongoing Board performance. In this situation in particular, in-depth discussion and planning always pays valuable dividends in the long term.
To bring about positive change you need much the same skills that make an exceptional Board member in the first place.
- An enduring passion for the business
- A willingness to accept change and the ability to thrive on it
- Real respect for the other board members, and for the business as a whole
- The ability to consider every issue, large and small, thoughtfully, and articulate those thoughts clearly
- A genuine sense of personal responsibility around actually making things happen
- The vision to think beyond today, clearly seeing the wood for the trees
- Being happy to put your own needs second to those of the business
What are the three essential steps every Board should take when there’s a Board change in the wind?
- Set aside a generous amount of time to prepare, enough time to handle any unexpected issues as well as those you expect
- Ensure you cover every conversation you need to have by listing them up front
- Plan things formally, in the same way you’d plan any other major change to the business, and make sure your plans are realistic and timely
If your Board is facing an imminent succession, your CEO is moving on or your Chair is stepping down, talk to us. Please get in touch with Nick Isbister for an insightful conversation about how to plan for and win the battle of the exchange zones.