The Successor’s Dilemma – CEO succession is an emotionally charged issue and one of the most difficult situations corporate boards face today. It also represents one of the board’s most important decisions. Since Dan Ciampa, a management consultant, first coined the term “successor’s dilemma,” much has been written. However, CEO succession is a dilemma for more than just the successor.
Often, when someone is brought in as a president or chief operating officer, with the implied or overt promise that they are heir to the throne, things don’t work out and the number two person leaves before ascending to the top job. These succession difficulties have more than just an internal effect. They can also affect the company’s stock.
A No-Win Situation
Why is this happening? Leadership transitions are fraught with emotional tension. There’s a lot at stake, and it is much more than a business transaction. Because they are unprepared to manage the intense emotional turmoil that accompanies such a transition, most boards, CEOs and successors find it difficult to handle the situation well.
The power struggle between a CEO and his successor has gained a reputation as a no-win situation. The CEO, even if he names a successor, has trouble relinquishing the power and letting go of the job that has been his identity.
Likewise, the successor faces a troubling Catch-22: when he attempts to demonstrate his leadership abilities, he is frequently seen as a threat by the CEO. But if he holds back, he’s labeled as incapable of the leadership needed for the top job.
Everyone involved could experience worry, frustration, anxiety and even anger at times. It’s bad enough to feel these emotions, but brain researchers have found that experiencing them actually inhibits cognitive functioning. The technical term for this is cortical inhibition, but it is also well known as “emotional hijacking.” So the old saying, “I was so upset I couldn’t think straight” is actually true. Have you ever become mad at yourself for hitting a bad golf shot or performing poorly when you usually excel. What typically happens to your performance after that? It gets worse. When you experience negative emotions, you are not as likely to make the best decisions. Experiencing negative emotions is normal, but most people don’t know how to positively manage these emotional reactions. The situation often escalates into open hostility or conflict, and the board finds itself caught in the middle.
Planning for Success
The succession issue doesn’t have to be so painful and difficult. It can be a win-win situation by preparing the board, the CEO and his successor for the process. This involves making a plan for succession, including both the CEO and board in the process, but most importantly, educating the board, CEO and upper management ranks on how to handle this emotionally charged transition.
The most successful leadership transitions result when those involved have improved their emotional intelligence (EI) skills. That begins with just acknowledging that a multitude of strong emotions are bound to occur in any leadership transition. Denying these types of feelings just makes the whole situation more difficult and more volatile.
How are emotional intelligence skills enhanced, so that emotional mismanagement doesn’t occur? Through simple strategies that can be learned and practiced, so that you can improve how you handle situations you perceive as threatening. Consequently, an overall management development strategy needs to include training in EI development.
While a few people have naturally high emotional intelligence, (just as some people are mathematical geniuses) most of us need some skill development in this area. Unfortunately, the typical K-12 educational system includes training in math, reading, writing and other subjects, but doesn’t address the key emotional management skills that are necessary for success. Neither do university curricula. In other words, if a person does not have high EI skills, it is not his or her fault. He or she simply never was taught those skills.
Developing your emotional intelligence skills is not something you can learn by reading a book or an article. It takes training and practice. But the good news is that it can be learned.
Effective emotional self-awareness, emotional self-management, and empathy on the part of the CEO, his successor, the existing and transitioning executive team and the board are hallmarks of a seamless succession process.
In other words, the whole transition runs more smoothly when everyone involved has developed skills in the emotional intelligence competencies. This includes not only the board but also everyone at the executive level who plays a key role in a successful transition.