You’ve Been Great; Now, Beat It

Everyone benefits if an outgoing CEO doesn’t linger

To give a new CEO the best shot at success, make sure the old one has really left the building. According to Kenneth W. Freeman, Allen Questrom Professor and dean, too many companies continue to hold former CEOs close—making them chair of the board, giving them advisory roles—and that can hold back their replacements. In an article for the winter 2017 People + Strategy, Freeman blames risk-averse boards and the egos of outgoing bosses, and advises companies to “make a clean break with the incumbent when appointing a new CEO.”

In “Knowing When to Let Go”—part of “The Brave New CEO Transition,” a piece compiled by Anna A. Tavis—Freeman admits that quitting a company you’ve led is tough, pointing to his own feelings at leaving the top spot at Quest Diagnostics. But, he writes, the outgoing CEO’s self-worth can cause transitional challenges. “They can’t imagine that an adequate replacement exists. And they want to see their legacy extended,” he writes. “So, they drag their feet in preparing a successor or do an inadequate job.”

Freeman explains that eliminating any loitering allows the new CEO to begin making an immediate, positive impact. “Knowing that you have only so much time to make your mark as CEO can inject a real sense of urgency into your work,” he writes. “Because you don’t expect to hang on after vacating the corner office, you are forced to think clearly and carefully about the skills your successor will need.”