Forward Moves

Business Growth Consulting Celebrates Its 10th Anniversary

September 2011 marked the 10th anniversary of Business Growth Consulting. What began as an idea hatched on the balcony of a Boise, Idaho airport motel has grown over the intervening years to become not only a source of livelihood but also a channel of learning and great adventure.

In the beginning, my main objective was to use my background in business and law to help leaders create the strategy needed to carry out their dreams. What began as a relatively linear process, however, quickly devolved into the messier corners of the human mind where personal history, emotional drivers and organizational white noise cut into front of the line toward producing smart and creative business results.

Ten years, several gray hairs and many pride defying moments later, I have come to the fundamental belief that leadership is about dealing with not knowing rather than knowing. The "Journey of Not Knowing" arose from reconciling the many experiences told to me by clients with my own experience of leadership. To be comfortable with the discomfort of not knowing expresses my fundamental belief of what it is to hold the image of a dream in the same place as the scariness that getting there.

In this inaugural issue of "Forward Moves," I want to thank the many clients, colleagues and friends who have shared their time, stories and quandaries over these years. Together we have learned a lot about the leadership mindset, that way of experiencing the world at the top of an organization in a way that others do not.

I look forward to another decade of learning with you.

Why "Forward Moves"?

BGC dedicates its work to building the bench of leadership strength within an organization. The work focuses on identifying and preparing the leadership pipeline ("move up"), maximizing the leadership capabilities of senior level leaders ("move in") and helping senior level leaders who want to leave to transition to other opportunities ("move on").

"Forward Moves" will share insights, experiences and research on the issues and opportunities related to leadership succession and development. Whether it concerns an existing CEO who needs to retire or the thirty-something future executive who could eventually occupy a senior level seat, how an organization addresses its leadership development and transition is critical to its long-term health and sustainability.

In the spirit of further sharing, we value your input and experiences and look forward to hearing from you at any time at julie [at] businessgrowthconsulting [dot] com. We look forward to the conversation.

Leadership Succession: What Makes It So Hard?

As we slowly peer over the rim of the recessionary hole we have occupied for the last three years, most companies have finally moved into a place where charting a new direction is not only desirable but critical to business health. Unfortunately, with this change in focus, leaders are looking around and discovering that there is nobody standing by them help lead the new initiatives.

Leadership succession seems to be in the air everywhere. At the opening of the 2011 “Challenges of Leadership” program at the Harvard Graduate School of Design Executive Education, I asked the 25 executives attending from around the world to name their greatest leadership challenge. Virtually every one of them said they needed to find a new strategy and a leadership succession plan to support it.

A similar conversation arose at a conference I recently attended of twenty-five corporate real estate executives. All of them voiced not only deep interest in corporate succession, but an even stronger desire to build the leadership pipeline to go with it.

Why it took until now to find the interest and energy to pursue new strategy is understandable. 2009 to 2010 were the survival years. Battening down the hatches and trimming every piece of fat, and some lean, was the strategy. While it can be argued whether abandoning a fresh strategic look at the market was the best use of time, by the time 2011 rolled around, that shift started to happen.

The challenge of launching new strategic directions has brought to the surface the question: Why aren’t there more leaders standing in line to lead them? We all know of some organizations that stand as exemplary models of long preparation of their leaders. GE for many years has integrated its succession planning into the ordinary course of business at every level. P&G moved from its CEO A. J. Lafley to Robert McDonald with barely a hiccup, having prepared the successor for several years.

Most organizations, however, are not well prepared, and that unfortunate fact rears its head in many ways. One important contributor to the problem is the reluctance of some of the senior executives themselves to move on. Consider these real life examples:

• The Managing Partner of a large professional services firm finally decides he wants to move on, but does not trust his junior partners to run the firm well enough to support its reputation and longevity, not to mention the buy back of his stock.
• The CEO suddenly has an incapacitating stroke and it is discovered that there is not even someone holding his Power of Attorney.
• A president of a technology firm decides it is time to write the novel, but when she looks around for someone to take over, all the persons who could have taken over left in frustration long ago over the lack of leadership pathway.

Do any of these sound familiar?

The reasons for not initiating a leadership succession plan are many. They can be as simple as spending too much time in the present operations without a forward look at any thing, lack of knowledge of how to create a succession plan or a perception that future leadership is not important enough to take away from the daily serving of customers.

There also may be a number of less obvious reasons that may be at work, which point to the state of mind of the senior executive. Some of them are:

Strong identification with the executive role: Leadership by its very nature is highly demanding of one’s time, energy and passion. To be successful one must give deeply of oneself. An executive who occupies a senior leadership role for many years can easily merge his or her identity with that role as it becomes the most controlling factor in their lives. Many love it, others do not. Whichever way it goes, the strong personal identification with the role is hard to escape.

When it comes time for a leadership change, giving up that strong identification poses significant challenges. As one successful executive said to me, “who am I in some small beach town where nobody knows me as anything as a gray haired, 65 year old retiree?” Executives derive a lot of pride from their achievements as leaders and disconnecting from the engine that feeds that pride can be very difficult. Founders are particularly implicated, as they can see their companies as symbols of their success and extensions of their own personalities.

William Bridges wrote in his seminal work, Transitions (Da Capo Press, 2004), that one cannot move successfully into a new life without unhooking from the previous role. To know who you will be in your new life, you need first to acknowledge what you are in the life you are about to leave. Once those things are said out loud, it is easier to release them to free up the energy needed to explore new possibilities.

I’m Not Done Yet: Leaving a Legacy. Many leaders can find it hard to move on because they do not believe they have fulfilled their legacy or they fear the legacy they have established will changed by a successor. Legacies come in a variety of forms, from successful products to unique corporate cultures. The change of leadership at the top inevitably will affect how things are done and how they are viewed.

While such recasting of a legacy can result in a colossal failure for the successor executive—we all remember Carly Fiorini trying to convert the down to earth, yet meticulous HP engineering culture into a marketing culture—successor executives will work to make their own imprint that will continue only in part what came before. For an executive moving on, that can be a very disconcerting experience.

Loss of Power: The position of senior executive carries with it a lot of authority. While one is beholden to the shareholders and the Board of Directors, having the authority to make the final call on matters can be quite habit forming. Once the office is taken away, with it goes that ultimate authority. While many executives are happy finally to be rid of the responsibility, others find it disorienting to give such authority over to others.

Freeing oneself of the need for such power does not happen over night. It requires evaluating what is best for the organization, the consequences of not making the final call to the company and finally learning that others with other ideas contribute to the future of the company in much the way as that person’s decisions once did. A process of gradual passage of authority is important to the leadership transition. It allows for those inheriting new authorities to learn how to use them well (with mentoring from the departing executive). It also allows for the departing executive to let go over time and explore new life possibilities.

The Denial of Death: Manfred F.R. Kets de Vries in “The Dark Side of CEO Succession” (Harvard Business Review, January-February 1988) discussed some of the patterns above but also sees an even deeper cause of resistance to corporate succession. For some company leaders, facing the reality that his or her association with the company will end triggers a lot of conflict. At a deeply psychological level, realizing that one has to give up power threatens a deep-seated belief in one’s immortality. That threat can lead not only to resistance to succession but actual sabotaging of the succession by putting in place a weak successor that the leader can "rescue" later.

Moving Forward with Succession

Overcoming senior executive resistance requires commitment to a process of personal and professional transformation. The process begins with recognition of the barriers an executive is erecting and the impact on the company. From there, the work requires the executive to look inward to evaluate the origins of his or her resistance. Self-awareness is key to leadership growth. With the benefit of new insights, the executive needs to work with others to put in place a succession structure. Once that structure is in place, the hard work of implementation begins. Each leader’s journey is unique, but the common element is the critical importance of the work to the long-term future of the company.