Don’t Let Boomerang CEOs Scuttle Your Leadership Pipeline
Bob Iger made news when he swooped back into Disney and replaced former beleaguered CEO Bob Chapek. Michael Dell was reinstalled back at Dell. Howard Schultz took back the reins at Starbucks. Why can’t these hugely successful CEOs stay away from their former posts? What does it mean for your leadership pipeline when CEOs boomerang or stall their exit for far too long?
In a candid conversation on NPR’s Morning Edition, Leila Fadel and executive leadership expert Cindy Solomon discussed the implications. These instances of CEOs “boomeranging” back into their roles bring to the fore critical questions about succession planning and leadership continuity in large organizations.
Boomerang in the C-Suite
These CEO reappointments point to a larger, systemic issue. Solomon identifies a substantial gap in succession planning, noting that many large corporations aren’t investing enough in developing their C-suite leaders. This oversight results in a shortage of ready-to-lead executives, indicating a lack of bench strength.
The Reality of Skill Gaps
The pervasive myth in corporate circles is that C-suite executives are omnipotent and equipped with all the essential skills to navigate the intricate and volatile business landscape. However, this narrative is not only misleading but detrimental. It obscures the skill gaps, especially in leadership and communication, which are integral to steering a corporation toward sustainable success. The misconception that executives are beyond development and refinement inhibits investments in nurturing and enhancing their capabilities.
Cindy Solomon speaks to this with deep understanding: “I think the boomerang really epitomizes the issues around succession planning and large organizations right now. My experience with the work that we do is that large organizations really stop investing in leadership development in those C-suite levels, which is what then leads to a lack of true bench strength.”
Without a clear plan for advancement, organizations may appear stable but quietly face a crisis of eroding bench strength, leading to gaps in leadership potential.
These skill gaps are not inconsequential. Skills gaps in executive leadership affect decision-making, strategic alignment, and the organization’s adaptability to the evolving business ecosystem. Leadership and communication skills, while intangible, are essential for effective corporate governance. A lack of these skills not only affects the leader’s effectiveness but also impacts the whole organization, from employee morale to innovation and productivity.
Implications for Succession Planning
These unaddressed skill gaps naturally impede effective CEO succession planning. When a CEO leaves, whether through retirement or other means, the absence of a well-prepared successor can destabilize the organization.
The “boomerang” of former CEOs, as Solomon aptly describes, is symptomatic of an underlying hubris and malaise – a failure to institutionalize leadership development and succession planning as core to the organization’s strategy and culture.
We must dismantle the misconception that executives have all the needed skills and focus on filling skill gaps and strengthening our pool of ready leaders. By doing this, organizations can avoid the fallout from poor succession planning and ensure smooth leadership transitions that lead to stability, innovation, and growth.
Departure of Talent from Leadership Pipeline Neglect
The corporate ladder has its limits. C-suite executives often face a perceived ceiling in their career progression, feeling that they have reached the top with no further to climb. This perception can lead to a stagnation effect where potential successors, despite their skills and ambition, feel restricted in their growth and development.
The impact of losing potential leaders is immediate and significant. These individuals, equipped with the skills and vision to advance the organization, often leave due to a lack of advancement opportunities. If there is a CEO who isn’t nurturing the pipeline of leaders who will come behind him or her, those highly talented, exceptionally skilled leaders see nowhere for them to grow. Solomon highlights that potential C-suite successors exit when they see no room for upward movement,
“Any bench strength that you did have below you in that C-suite – they leave for other opportunities. So those who believe they are ready or certainly want to take on that task – if they don’t see any headroom above them, any movement in that CEO level, they depart for other opportunities. So now you’ve already lost the cream at the top of the barrel for that CEO role, ” Solomon explained.
This departure is more than a loss of employees; it’s a drain of knowledge, skills, and organizational insights. Every exit creates a gap that goes beyond vacant positions—it’s a loss of accumulated wisdom and experience that can’t simply be documented or easily replaced.
Ignoring the need to develop future leaders is a real and pressing issue. It impacts the organization’s vitality and readiness for future challenges. The return of retired CEOs, while showcasing their skills, underscores the organization’s failure to prepare for the next leadership tier. When a leader overstays a wise tenure, it can indicate an unprepared succession pipeline, highlighting the need for immediate action in nurturing and preparing upcoming leaders.
Build Bench Strength by Opening Closed Doors
The evolution of an organization is intimately linked to the development of its leaders. In a business climate marked by volatility, uncertainty, complexity, and ambiguity, the nurturing of bench strength isn’t a peripheral initiative but a core strategic imperative. The implications of this are profound, delineating the trajectory of not just organizational success but sustainability.
A key strategy for building bench strength is to make the otherwise hidden aspects of executive leadership accessible. This involves allowing emerging leaders a closer look at the real-world challenges and decision-making processes of the C-suite. The CEO plays a crucial role in this, promoting transparency within the leadership pipeline.
Solomon says, “The process of really building your successor at that CEO level – it requires a subjugation of your own ego to the needs of the organization. If a CEO wants their successor to be successful after they depart, they really have to turn over the keys to the kingdom, if you will. They have to let their successor in on the secrets of things that only they know about. At the C-suite level, you really don’t get experience in how to manage a board or how to deal with their largest shareholders.”
A crucial strategy for enhancing bench strength is offering emerging leaders insight into the often private world of executive leadership. CEOs can foster this transparency by including potential successors in high-level meetings and decision-making processes that are typically private.
CEOs face complex decisions, often addressed in meetings with key stakeholders behind closed doors. Allowing emerging leaders to observe these interactions gives them an invaluable understanding of executive challenges and decision-making nuances.
By opening up these interactions, CEOs cultivate a group of well-prepared leaders ready to navigate the complexities of the C-suite with insight and confidence. These emerging leaders are then equipped to step into executive roles seamlessly, backed by a rich understanding that positions them to lead the organization into its future with innovation and success.
A Blueprint for Leadership Continuity
Boomerang CEOs highlight a neglected area – the development of future leadership. For sustained organizational success, leadership nurturing should be a strategic priority akin to financial viability and operational efficiency.
Developing well-rounded leaders adept at balancing financial, operational, and governance responsibilities with an upward trajectory within the ranks is essential. This involves not only equipping them with strategic skills but also enhancing their emotional intelligence and resilience to navigate complex organizational dynamics effectively.
There is an opportunity for organizations to invest in a systematic process of nurturing leaders. This process combines comprehensive training, hands-on experience, and mentorship within a supportive yet challenging organizational culture.
Every investment in leadership development amplifies individual growth and fortifies organizational stability, aligning both with the evolving demands of stakeholders and the broader business landscape.
Let’s Build A Resilient Leadership Pipeline Together
Every great organization needs a leadership pipeline that’s as full, resilient, and dynamic as the mission it pursues. Our approach is as unique as your organization. We combine a macro, market-wide view with a nuanced, micro-level analysis, weaving them into a strategy tailored precisely for your context, challenges, and aspirations.
We work closely with your team to gain an in-depth understanding of your company’s goals, challenges, and history. We develop a deep bench adept at overcoming current challenges and leading innovative pursuits in their current roles while also preparing for future leadership opportunities. Our tailored strategies stem from a deep appreciation of your organization, crafted with an eye on evolving market trends.
Each plan we craft, each leader install, reflects our unwavering commitment to your success.
There can be a future where each leadership transition elevates your organization to new levels of innovation and success. In this future, leadership isn’t about filling vacancies, but driving your organization forward.
Together, we can transform uncertainties into marked forward progress.