One of the best ways for leaders to be successful is to learn from other leaders. Below are insights gleaned from interviews with top executives who have been there: Anna Shmukler, a professional engineer and retired CEO; Doug Shaw, CEO of a design firm; and David Taylor-Klaus, CEO of leadership coaching firm. They share what they have learned about preparing a successful handoff to the NextGen.
1) GOOD ENGINEERS DO NOT ALWAYS MAKE GREAT EXECUTIVES.
It is an often-believed myth that good engineers easily transition to the C-suite. A myth Anna Shmukler experienced firsthand. Shmukler was an experienced professional engineer, but felt unprepared to step into the role of CEO.
“I was pretty confident in my engineering side. I had to build my confidence as a CEO because being a CEO wasn’t something I had learned. So I had to learn as I went, which is not always a good way to do it,” Shmukler says.
Shmukler had extensive training and education as a professional engineer, but lacked business acumen when she first became CEO.
“A huge thing that was missing in my education was reading financial statements. I never took any business classes and it was very tough for me to realize that I actually needed to go. I had to take classes to learn managerial and financial skills,” Shmukler says.
As CEO, Shmukler knew other people were depending on her, which meant she had to learn quickly on the job. Looking back, she wished she had been better prepared ahead of time to understand broader business areas. Shmukler advises leaders to ensure NextGen leaders understand multiple areas of the business, including accounting, human resources, operations and business development.
“Just because you’re a very good engineer doesn’t mean that you all of a sudden become a good CEO. It takes much more than just engineering. Being CEO requires a different set of skills,” Shmukler says.
2) LEADERS MUST HAVE LEADERS BEHIND THEIR LEADERS.
There is nothing easy about being CEO. CEOs are bombarded with responsibilities, but one responsibility CEOs cannot ignore is investing in up-and-coming leaders. That is, if a CEO wants a successful handoff to NextGen leaders.
“As we grow, I’ve got to make sure that I’ve got leaders behind my leaders and resources behind my leaders,” says Doug Shaw.
Shaw recommends that leaders start building a transition strategy into the fabric of their company early in their career, long before retirement is on the horizon.
“One of the things that’s hard to juggle is making sure that you’re pouring yourself and your experience into your people, but you also have to identify what your exit strategy is,” Shaw says. “I knew that if I didn’t start planning and start investing in some people in the company, my exit wouldn’t happen at all. It’s a very important part of having an enduring asset.”
Shaw suggests that when leaders enrich themselves by reading books, they also share those books with the NextGen to build them up as well. “I read books all the time, and I read my books with my people because I want them to understand what the business is doing and what it is trying to achieve,” Shaw says.
3) FINISHING STRONG REQUIRES A TEAM.
A successful transition to the NextGen of leaders is impossible for one leader to do. It requires a team of people to be involved for years prior to a CEO’s exit. Yet, many CEOs do not communicate their exit strategy to anyone until they are close to retirement.
“I see a lot of executives think about their exit, but they don’t talk about their exit. So when they say, ‘I want to exit in two years,’ that’s a fantasy-land selection of time. They haven’t really thought about the process of finishing, let alone finishing strong,” warns David Taylor-Klaus.
Taylor-Klaus notes that exit planning starts when a CEO begins to talk about their exit out loud.
“Once a CEO starts planning their exit out loud and involving their spouse, their partners and the next level of leadership, things start to change. It becomes clear what work has to be done. Exit takes time,” Taylor-Klaus says. “Create a culture of talking about the future of leadership in the organization.”
Taylor-Klaus encourages leaders to consider the following: “When the people remaining at the company, the new leadership and their next generation of leaders, when they think back on your exit, what do you want that legacy to be? Do you want to be the cautionary tale of how not to do an exit or do you want to be the model for how the next two generations are going to exit when it’s their turn?”