Experienced leaders’ #1 regret is not moving fast enough on people. Both Disney and GE botched CEO handovers. The difference is that Disney moved relatively quickly to right the wrong while GE did not. There are all sorts of lessons about picking the right CEO, CEO offboarding, and CEO onboarding. But the most important lesson is to own up to your people mistakes and fix them fast.
Jack Welch’s replacement at GE, Jeffrey Immelt lasted 16 years, presiding over the demise of the GE brand. As William Cohan wrote in the New York Times yesterday, Welch “spent the last few years of his life profoundly regretting what he believed was the most important decision of his career: his choice of successor.”
Arguably Welch had built GE into the most respected and most valuable company in the world, worth more than $600B in 2000. Welch famously pitted three of his executives against each other in a succession race, eventually picking Immelt over Jim McNerney or Robert Nardelli. It’s fair to say the real winners in that race were Boeing’s shareholders. The board stuck with Immelt and he eventually failed. And GE is now a shell of its former self, being split up.
Disney has botched CEO handovers before. Michael Eisner hired Hollywood agent Michael Ovitz to replace him. They ended up parting ways after 15 months after an epic fallout. Iger botched his planned handover to Thomas Staggs with a lack of clarity.
And they botched this one. As Brooks Barnes reported, also in The New York Times, Iger’s successor, Bob Chapek was fired this week after having done “irreparable damage to his ability to lead, with a string of missteps resulting in the lost confidence of Wall Street and most senior Disney executives, as well as many rank-and-file employees.” They botched it. But unlike GE, they moved to fix it – hopefully soon enough.
You’re going to botch some people choices too. When you do, fix them – fast. When it involves a new CEO, think about how to make the best possible choice, how best to onboard them, and how best to offboard the existing CEO.
Selecting the next CEO
As I’ve written here before, there are only three interview questions, ever. It’s true for entry-level positions and true for CEO succession. 1) Will you love the job (motivation.) 2) Can you do the job (strengths.) 3) Can we tolerate working with you (fit.) There’s more in my earlier article relooking at the only three job interview questions.
Onboarding the next CEO
A good model for CEO Onboarding was Iger himself, as described in my earlier article on Executive Onboarding Lessons From Disney CEO Bob Iger. Those include: respecting yourself, your colleagues, and your brand.
Letting go is hard – especially if it’s something you built or even created. But you cannot hope to onboard someone into your old role successfully unless you’re prepared to offboard yourself. Help your successor learn the knowledge, practice the skills, get the hard-won experience, and build the relationships and confidence they need to succeed. Then, get out of the way.
1. Make it about their success, not your legacy. You’re not setting your successors up to be you. They have to take what you and your team have done to new levels – their way, not yours.
2. Have a teaching/learning approach. Think through how you’re going to help your successors learn, practice, and experience the important parts of the role. You don’t have to teach them yourself. You don’t have to supervise their practice. You don’t have to hold the net to catch them when they fail early on – which they will. But somebody does.
3. Prepare everyone. It’s not just about preparing those taking over from you. It’s about preparing your followers to accept new leaders and preparing peers to accept new peers. Everyone will have the same question: “What does this mean for me?” You have to help them believe this will be good for them.
4. Get the timing and pacing right. Hand over responsibilities too soon and your successors won’t be ready. Hand them over too late and your successors won’t engage. Get the timing right for handing over different responsibilities to different people.
5. Get out of the way and stay out of the way. Your successors are not going to do things the way you did. They will make mistakes you would not have made. You have to let them do that so they can learn and grow and do things that work better than what you would have done.