THE HARDEST LEADERSHIP TRANSITION ISN’T CEO-TO-CEO. IT’S CEO-TO-CHAIR
Tim Cook has stepped down as CEO of Apple after 15 years of leading one of the most admired corporate value-creation stories of the 21st century. He is transitioning into the Executive Chair role.
It’s a move that looks simple on paper but rarely is in practice.
A unique set of challenges arise when the outgoing CEO does not leave the organisation but instead moves ‘down the corridor’ into a Chair or Executive Chair role. I was pleased to contribute to the Financial Times Governance newsletter on this nuanced issue.
A CEO-to-Chair transition can provide valuable strategic, relational and institutional continuity. The risk is rarely poor intent. It is blurred governance, unclear accountabilities and complicated power dynamics.
Employees gravitate to where influence has historically sat. Long-established loyalties do not change quickly. Stakeholders may still look to the former CEO for reassurance or wonder what decision Tim would have made?
The result? The new CEO can be unintentionally disempowered.
The deeper challenge here is that the very qualities that make an outstanding CEO often make it difficult to be an effective Chair.
Great CEOs are valued for their ability to drive outcomes, make difficult decisions, intervene when problems arise and solve issues quickly. By contrast, great Chairs steward rather than direct, challenge rather than decide and enable rather than execute.
Moving from CEO-to-Chair requires a profound shift in professional identity and mindset. Such an evolution cannot happen overnight. The temptation to slip back into CEO mode can be acute, particularly when challenges emerge. We have seen this first-hand at Disney with Iger and Chapek.
The discipline required to make the CEO-to-Chair transition work is generally not capability. It is restraint. Can the leader demonstrate the self-awareness and restraint to stay in their agreed lane?
Outgoing CEOs in this situation need to consider how they will embrace the dual challenge of learning to operate as an effective Chair whilst unlearning what made them successful as a CEO? They also need to anticipate how they are likely to respond if they don’t find the new role equally satisfying – a common experience.
CEO-to-Chair transitions can be designed to mitigate these risks when:
• Decision rights, boundaries and escalation routes are explicit. Informal
channels are minimised.
• The former CEO advises the new CEO privately, and only when asked.
• The Board actively and visibly reinforces the authority of the new CEO.
• The successor has space to build their track record, credibility and
relationships
• Outgoing and incoming leaders undertake personal transition planning
that is integrated into a single Board-sanctioned transition strategy.
Transitions succeed not because of perfect planning, but because of disciplined role clarity and personal preparation. Succession is not an event. It is a nested process: a series of interconnected mini transitions, each building the platform for the incoming CEO.
The behaviour of the outgoing CEO is always a major variable in determining the success of the incoming CEO. If the outgoing CEO is moving into the Chair role, then the behavioural stakes are even higher.
This article can be viewed on the FT website by clicking here