The Successor's Dilemma - One of the toughest situations corporate boards face today is the emotionally charged issue of CEO succession. It's also one of the most important decisions that a board makes. While much has been written about what management consultant Dan Ciampa termed the "successor's dilemma," the issue of succession is a dilemma for more than just the successor.
It's not unusual to see an individual brought in as president or chief operating officer with the intention of grooming him or her for the highest office and then watching that person walk out the door 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. Most boards, CEOs and successors find it difficult to handle the situation well because they are unprepared to manage the intense emotional turmoil that accompanies such a transition.
The power struggle between a CEO and his successor has gained a reputation as a no-win situation. Even if he names the successor, the CEO may have difficulty relinquishing the power and leaving a 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. While it's unpleasant to feel these emotions, research has also shown 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.
When those involved in leadership transitions have improved their emotional intelligence (EI) skills, the likelihood of success increases. 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.
Managing Emotions
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, training in EI development should be included in an overall management development strategy.
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.
The hallmarks of a seamless succession process include 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.
In other words, when everyone involved has developed skills in the emotional intelligence competencies, the whole transition runs more smoothly. This includes not only the board but also everyone at the executive level who plays a key role in a successful transition.
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Specializing in the area of Emotional Intelligence skill-building, Byron Stock is devoted to making work a place where people flourish and productivity improves. Typical improvements in personal goals range from 30% to 50%. To learn about Byron's quick, simple, proven techniques to harness the power of your EI, visit www.ByronStock.com.
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