Succession Secrets: Mastering the Make-or-Break Leadership Transition

CEOs with healthy egos, a strong public image, and a legacy to protect often hesitate to open their kimono and admit mistakes in choosing a successor. Yet Robert Stiller, the founder of Green Mountain Coffee, did exactly that in an article he wrote for Fortune Magazine.

“When it came time to choose a successor at Green Mountain, my mental game was off when I needed it to be on. Green Mountain was growing fast, and I had concerns about running such a big company and managing the workload that came with it. We added board members with leadership experience at companies much larger than us.”

“I didn’t do enough to understand my successor’s way of thinking, help him understand mine, and plan how to work as a team. I failed to consider how much a new leader could change our company culture and alter our course—which I firmly believed was the right one.”

Stiller reflected that he should have been more mindful, read books about the keys to a successful succession, and sought more advice. My advice to Stiller would have been to talk to the board and HR about it and, most importantly, find a coach.

CEO Succession: A Critical Priority for All Organizations

The urgency is apparent: 10 percent of CEOs leave their roles annually, and 40 percent of new C-suite members exit within 18 months. Yet, fewer than 50 percent of companies have a solid succession plan. When Stiller reflected on his leadership transition, he realized his approach was flawed. He first needed to recognize that succession is not a one-man show but should involve others. Second, choosing a successor is only half the job; the other half executes the make-or-break leadership transition process effectively.

This brings up critical questions for boards, HR, and external coaches involved in succession planning:

1. How could the board have ensured Stiller’s successor was the ideal fit for the company’s future? Michael Bloomberg asserts that the board’s most important job is to provide the best possible CEO is always in place. The board needed to align the successor with Green Mountain’s vision and long-term strategy to facilitate a smooth transition.
2. How could HR have more effectively challenged and supported Stiller during this transition? HR should act as a “CEO whisperer,” drawing out Stiller’s genuine feelings about passing the torch and probing potential issues with insightful questions. They should help him visualize the kind of successor who would be the perfect match for the company.
3. How could coaches or trainers have provided valuable insights during this process? Coaches and trainers (internal and external) could have helped Stiller build a pipeline of future-ready leaders from within, aligned with his vision and values, rather than depending on headhunters. They could have supported him in fostering succession readiness and managing the transition smoothly.

A Blueprint for Success: The Five-Step Enterprise Leader Succession Process

As a CEO whisperer to the Fortune 500, I’ve overseen over ten major CEO transitions and have determined five steps for a successful succession process involving the board, HR, and coaches. Succession planning isn’t just about filling key roles like CEO or COO; it’s about creating a pipeline of future-ready leaders and establishing a strategic, ongoing development plan. Neglecting this can disrupt an organization’s vision, values, and operations. This approach ensures a steady flow of capable leaders aligned with the company’s long-term goals, maintaining stability and long-term success.

The Five Steps of a Succession Mastery Process

Step One: Form a Succession Planning Group and Employ a Succession Simulator

To ensure leadership continuity, a succession planning committee comprising board members, HR professionals, executives, and external experts must be formed. This committee will oversee and maintain a proactive succession process, integrating leadership development strategies with succession planning. I strongly recommend that you enhance this effort by hosting a three-day offsite collaborative event, for instance, that brings together these diverse collaborators to craft a leadership development strategy seamlessly linked to succession planning. As Dov Seidman highlights in How: Why How We Do Anything Means Everything, the focus should be on what and how the team works together, a dynamic that this kind of event can foster effectively. An impactful activity for this event would be to engage in a “Succession Simulator” where you prepare for potential disruptions, such as the CEO being poached, an activist investor demanding leadership changes, or disruptive innovations from new entrepreneurs.

Step 2: Resurrect the Master-Apprentice Relationship

CEOs and enterprise leaders need to be directly involved in mentoring. CEOs and CHROs are wary of generic leadership programs and check-the-box 360 reviews. I suggest resurrecting the master-apprentice model. Historically, great leaders used this approach to develop successors: King Philip of Macedonia had Aristotle mentor his son, Alexander the Great; Leonardo da Vinci, initially an apprentice, later mentored his apprentices; Johann Sebastian Bach trained his son, Carl Philipp Emanuel Bach. Sid Finkelstein coined the term “super bosses,” which describes leaders who cultivate other leaders across fields. A modern example is Bill Walsh of the San Francisco 49ers, who not only transformed his team but also mentored future NFL coaches like Mike Holmgren and George Seifert. As Finkelstein says, the goal is to create leaders capable of achieving anything, not just those who can fill a role.

Step 3: Develop a Slate of Candidates and Succession Decision Process

We often focus on CEO succession, but succession planning is crucial for every key organizational role. Pinpoint critical roles vital to your organization’s success and develop a diverse slate of potential candidates, both internal and external. Instead of relying solely on headhunters or obvious choices among your direct reports, cast a wide net. Pay attention to rising stars eager to make their mark and promising newcomers who bring energy and enthusiasm. Evaluate candidates based on their skills, experience, leadership potential, and cultural fit. Ensure the candidate pool reflects diversity and inclusivity, and keep it updated regularly to align with organizational changes and evolving needs.

Step 4: Build Future-Ready Leaders through Stretch Assignments

In most companies, leadership roles are monopolized by a handful of people at the top. To develop people, you must democratize leadership rights by assigning stretch assignments to newcomers and younger employees. A good way to do this is for the committee to meet, review your candidate slate, and create challenging tasks that will help prepare them for their future roles. At the same time, a leadership development plan should be developed and customized for each person. In coaching upcoming leaders, starting with a self-assessment, a 360 assessment, and a competency assessment is helpful. Again, the job of the assessment is not to develop leaders who are above average but leaders who can do anything.

Step 5: Develop the Coaching Habit

Michael Bungay Stanier talks about the coaching habit. This means approaching people not as the top dog or ultimate decision-maker but as a coach, mentor, and teacher. Leaders should make it a habit to turn every interaction with the team into a coaching opportunity. Many think coaching should only involve asking questions rather than giving advice or passing on lessons. Imagine an NFL, NBA, or MLB coach being restricted in this way—you need a balance of both.

Here are five powerful questions to ask during any coaching conversation:

1. How are you?
2. What are your goals and priorities?
3. What have you achieved lately?
4. What’s working and what’s not?
5. What’s missing that, if provided, would make a difference? (What’s missing is different from what’s wrong; think of inventive, creative solutions.)