How to onboard a new CEO. This is the seventh (and final!) article in a short series on executive succession planning.

We are following Western Manufacturing’s board and senior management team as they plan for their founder, William’s, succession. They have completed the following major steps:

1) Defining their values and a five-year operating vision.

2) Creating a rough sense of what the company will need to look like in five years to meet that vision.

3) Identifying key areas in the company that should be stabilized before succession occurs.

4) Describing the qualities of an ideal successor.

5) Building a planning and search process around the Five Principles of Credible Processes.

6) Learning how to identify and what to expect when working with a good executive search firm.

In this article, Western Manufacturing has identified the successor. They are now entering the final stage of the succession process – the handoff. Join them as they identify what they need to do leading up to the transition and post-transition considerations.

If you’d like to start the series from the beginning, click here.

The board of Western Manufacturing was gathered around their conference table to discuss the transition. William, the founder and current CEO, was present. Also, Adrian, the consultant who guided them through their executive succession process, was seated with them as well. Carla, the COO and board vice-chair, was also present.

The mood was positive. Almost like a collective sense of relief. They had identified their new CEO.

A few months ago, they had engaged a boutique executive search firm. The firm introduced them to several great candidates. One of whom was Carla.

No one was surprised to see Carla on the list. What was surprising was to see how well Carla stacked up against her “competition.” No one had seriously doubted Carla’s abilities. But there had been questions about whether or not they really had “grown their own” that well.

However, the process they had just walked through confirmed, for everyone, that Carla was the best person for the job. Not only did she have the basic skills required for the position, but she also had personal history and knowledge of the company. She embodied the values, vision, and culture of the company. Not only this, her ability to organize and create efficient structures was critical given the ambitious growth implied by their vision.

The value of the investment of finances and time for the search process felt evident. The niggling “what if” questions were resolved. The other candidates were great. In fact, any of them probably would have done a good job. But Carla clearly stood out. They knew they were choosing the right person.

Plus, the process produced two other benefits: 1) It helped them clarify her role and their expectations. William had created a very organic version of the CEO role that fit him. This process helped clarify what the board really needed and wanted from the role. 2) It confirmed, for Carla, that she was viewed as qualified by her peers and wanted for the role – not just the “easy” choice or William’s pick. That on its own was worth the price of admission.

What should transition look like?

William started out, “Adrian and I have already discussed the transition process privately. I like what he is recommending but realize it needs to be the board’s decision. Adrian, we really appreciate your help and guidance over these last few months. I don’t think any of us had realized what was involved in preparing for succession. Could you describe, for the board, what a transition process should look like? How should I hand off to Carla?”

Adrian, started out, “That’s a great question. Given Carla’s experience and qualifications, the approach will be a little different than if she still needed to be “grown into” the position or if you had chosen an external hire.”

“However, for this conversation, let me describe the basic principles and processes that broadly apply. Later, we can explore their specific application for you.”

Four Principles for Effective Executive Transitions

Adrian continued, “Here is the set of principles which apply broadly to effective transitions.” Adrian walked over to the dry erase board and wrote down:

Transition Principle 1: The transition process may have equal importance and dynamism to the preparation and selection process. A significant reason why two out of three executive successions fail for small to mid-sized companies is that they fumble the actual handover.

“This process is critical and can be highly dynamic. Change creates anxiety. Even with wanted change. Additionally, ‘times of transition create transition’. Meaning that William’s exit shakes up the status quo and will trigger others to rethink their personal goals and relationship with the company. This isn’t wrong and it would be naïve to expect anything less.”

Tim, the VP of Business Development, spoke up, “We have a very loyal team. People really like Carla. I don’t think that will be an issue for us.”

“That may be the case”, said Adrian. “However, the truth is that no one knows what the change will feel like. And no employee – or customer – remains forever. A good transition process is mindful of this dynamic.”

Transition Principle 2: Keep it short. Short transitions are usually better. The length of time should be determined by what is needed. But drawn-out transitions tend to create confusion about “who is in charge”. People naturally try to align themselves around whoever the leader is. If that is confused, due to two leaders being present, it creates even more confusion and even factions.

Transition Principle 3: Hands on the wheel, eyes on the road. “Much of the transition work will happen between William and Carla. But the board needs to stay involved in the process.”

”The success of the process is threatened if the board believes their work is done with making a decision on a successor. A successful transition is ‘chaperoned’ all the way through the handover. I typically recommend for this to last through one planning cycle (usually one year).”

”This often includes using the search firm’s services in terms of the transition process and hiring an executive coach for Carla. There is a very real benefit for Carla to be able to have a coach who isn’t working directly with the board that she can speak to and process all of this with .”

Transition Principle 4: Work to be respected not liked. ”This is mostly for Carla but also for the board. It might be tough-sounding but it isn’t about being tough. The issue is that boards or CEOs who attempt to be liked by or to please everyone will be unsuccessful. They’ll fail.”

”However, if you separately and together work to earn the respect of others, you’ll be effective.”

“This kind of respect is primarily achieved by:

• Being credible – which is mostly about following through on what you say you’ll do.
• Demonstrating that you care about the well being of the company and employees and
• Acting competently to produce results

Through transition, hard decisions may need to be made. But if you’ve earned and worked to maintain respect, most people will stay with you and her. As a bonus, many will also like you both. But being liked should never be the goal.”

“Does all of this make sense?” Adrian asked.

“Yes,” William said. Carla nodded in agreement.

Ernie, the CFO, spoke up, “This feels a little like the work we did earlier – where we thought it was simple and it turned out to be a lot more involved.”

“Yes,” Adrian said. “That’s true. It is. But it isn’t necessarily hard or all-consuming work. Most of this will feel just like the normal process of doing your jobs.”

Support the Success of Succession

“A handover process is not a transaction. It isn’t even like a normal onboarding process for an employee.” Adrian said.

“It’s much more like building a long-term partnership or even a marriage. It’s a more dynamic event with more at stake for everyone. It’s absolutely worth taking the time and effort to manage well.”

How involved should the outgoing CEO be?

“That’s helpful,” Stephanie, the HR director said. “But I’m not quite clear on how involved William should be. How should he begin handing over his duties?”

“Another good question,” said Adrian. “I’d encourage William to follow four steps. You and the rest of the board can help with parts of this. Here are those steps.”

Adrian started writing on the dry-erase board again:

• ID core executive roles, responsibilities, and functions:

“You’ve already done a lot of this as you were prepping for the search process. Because of that work, in this instance, it means deciding two things:

• What needs to be given away: Look at what William currently does that isn’t part of that list and needs to be handed over to someone else.
• What needs to be added: Looking for what you want Carla to do that William doesn’t do and deciding what mentoring or support she needs to develop that capacity – if any.

2) Plan for legacy projects:

This is something you also talked about early on. The projects that are near and dear to William’s heart. Now is the time to decide exactly what will be done with these projects. Which must be completed? Which will be handed over to Carla, or someone else, and how? Which may even be abandoned – and how to do that responsibly?

3) Share the work – with diminishing responsibilities for William:

Carla and William should map out a timeline for the responsibilities and projects she starts to pick up. In most cases, because Carla is a mature candidate and knows the company, this can be completed quickly. No more than a few months.

I would encourage clarity around this, including:

• Setting a specific date for William’s retirement.
• Announcing and defining when responsibilities have shifted from William to Carla.
• William being careful to redirect to Carla. As long as William is a source of direction for the company – many people will just go to him. He needs to conscientiously step away from that and consistently point to Carla.

This also includes making any introductions William might need to make so that Carla can fully step into her new responsibilities.

Basically, this is as much about William being strategically absent as it is about Carla stepping up. Carla needs the space t to be the leader and she needs the space to be seen as the leader.

4) William steps out of “doing” to “advising” to “moving on”:

As quickly as possible, and in the case of Carla this is probably a matter of weeks, William should not be doing anything. The primary exception would be wrapping up legacy projects.

William should move towards exclusively advising Carla – according to the timeline they develop. He should quickly reduce his visible presence during this period.

By the time you arrive at his retirement date, it should already feel like Carla is running the company. All that is left to do is have a big party and send William off to his next great adventure.”

“That’s pretty clear,” said Stephanie. “Thanks! Is there anything else we should consider?

On-going support for Carla and the board.

“Yes,” said Adrian. “In your case, your executive search firm included several months of follow-up support services. I’d take them up on that. If they hadn’t, I could have provided that for you. But the point is, it helps to schedule regular check-ins to make sure:

• Everyone feels good about the process moving forward.
• Issues, questions or concerns are identified early and addressed.
• The pacing is appropriate.

It helps to have regular meetings scheduled to review this. It also helps to have an outside neutral third party ask questions that may not occur to you, or feel awkward to voice in a group.

Last, I’d encourage you to offer Carla the resources of an executive coach. Being the CEO is different than being a COO. Technically, most of it is well within Carla’s grasp.

But the experience of being CEO – psychologically and socially – is totally different. Carla will no longer be a peer. She will have to make hard decisions. The buck will stop with her. When there is no clear right answer, or all the options seem painful – she’ll still need to make a decision.

It’s a different experience. Few people do it well. It catches almost everyone by surprise. A coach will help Carla navigate this much more quickly.

And, with that, I’ve covered the basics of how to plan the transition,” said Adrian.

“Thanks, Adrian!” William said. “You’ve given us a lot to think about. Gang, let’s take a quick break and come back to map out how we’ll use what we’ve just learned moving forward.”

The board of Western Manufacturing did just that. William set a retirement date for 90 days out. Which was about a month before he had initially planned to retire. But he realized his initial date was just arbitrary. Overall, the transition went well. Carla worked hard. She was surprised by the shift in relationships and dynamics. She understood what Adrian had meant when he said, “Knowing the job and feeling the job were two different things.”

But she loved it. Under her leadership, they were able to build needed structure and stability. This allowed them to expand to new locations and pursue their vision. This allowed them to create more opportunities and good jobs in the communities they worked in.

The board also realized they had learned a lot about how to lead through this succession process. It was a little hard, at first, with William gone. But as they began to step fully into their leadership role, they began to see that they could actually contribute to the success of the company – not just provide a legal function. It was exciting. Over the next few years, they did accomplish their vision. The path had a few unexpected detours – but they got there. Having a clear direction to keep pulling them back on course and into alignment meant everything.

William and his wife moved to be closer to their family. As it turned out, he couldn’t stay out of the game of business. He started to get involved in angel investing and advising – help new businesses launch and take off. He loved it. It was all of the fun work – none of the headache of running a business.

I hope you enjoyed my little foray into storytelling. I was a little concerned that the length of the articles and niche topic would turn people off – but readership has actually increased. Does that mean I should write more stories?

Anyhow, I hope this is helpful to you in your succession journey.

If you’d like specific support for your succession, feel free to reach out.

Additionally, take advantage of my free book offer, The Successful New CEO which lays out everything after the new CEO is hired. Offer good while supplies last!

Take good care,

Christian

𝗧𝗵𝗲 𝗕𝗲𝘀𝘁 𝗧𝗶𝗺𝗲 𝘁𝗼 𝗖𝗿𝗲𝗮𝘁𝗲 𝗔𝗻 𝗘𝗺𝗲𝗿𝗴𝗲𝗻𝗰𝘆 𝗦𝘂𝗰𝗰𝗲𝘀𝘀𝗶𝗼𝗻 𝗣𝗹𝗮𝗻 𝗶𝘀 𝘽𝙚𝙛𝙤𝙧𝙚 𝗬𝗼𝘂 𝗡𝗲𝗲𝗱 𝗜𝘁.

Be prepared for a smooth transition in the event of an unplanned emergency succession. My guide will show you step-by-step how to devise your own plan.

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