The Successor’s Dilemma

by Dan Ciampa and Michael Watkins

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well-regarded CEOapproaches retirement age.

He knows it is only re-sponsible to designate a suc-cessor, and the board agreeswholeheartedly. Together,they screen internal can-didates but decide thatnone possesses all theskills necessary topropel the companyforward. Soon, abright star is hired from outside the company –withthe assurance that if he performs well, he will as-cend to the top spot in two or three years.

At first the successor dazzles. He launches im-pressive strategic initiatives, some that yield sur-prisingly fast results, and he deploys managerialpractices that get work done more effectively thanever. The CEO and the board congratulate them-selves for their wise choice. Slowly but surely, how-ever, the star’s brilliance begins to dim. His take-charge approach starts to alienate the CEO and keymembers of the senior management team. Then itoffends them outright. Soon, his initiatives are re-sisted, and some are even blocked altogether.

The designated successor grows frustrated, evenangry. In his gut, he knows what is going on: the

CEO is having trouble letting goof his job. He’s not ready to give up

control of the company he has toiledto build. Still, the board expects the

designated successor to post impres-sive results, and the successor himself

knows he must make organizational andstrategic changes to prepare the company

for the time when he will lead it. But with-out support from the CEO and his team, how

can he take charge? The successor’s hands aretied. If he pushes too hard, he alienates the CEO;

if he doesn’t push hard enough, his performancewon’t warrant a promotion to the top spot.

Thus the stage is set for the successor’s dilemma,a seemingly intractable set of circumstances thathas entangled leaders for as long as there have beenorganizations. Indeed, the drama of leadership suc-cession is a timeless part of the human condition –think of the Biblical story of Saul and David andShakespeare’s King Lear. In both cases, the kingseventually found themselves unable to let go afterchoosing someone to succeed them. In moderntimes and organizations, the succession story playsout with similar themes. For the would-be leader,succession is a time of great excitement and prom-ise, the culmination of a long and arduous climb tothe top. For the incumbent leader, succession is a

Copyright © 1999 by the President and Fellows of Harvard College. All rights reserved. 161

Leadership transitions go awry with alarming

frequency, often theresult of an emotionally

charged power struggle between the CEO and

his would-be heir. Fourpractices, however, can

help successors defuse the crisis – and make

it to the top.

TheSuccessor’s

Dilemmaby Dan Ciampa and Michael Watkins

A

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The Successor ’s Di lemma

time to confront the passage of time, the end of a career, and even mortality itself. It is no wonderthat relationships between successors and thosethey hope to replace are so fraught with emotion.

The successor’s dilemma presents a pair of damn-ing alternatives. If a CEO resists passing the torch,his would-be successor can wage open war to winthe top job – but that can get ugly and rarely works.Or the successor can resign – a “solution” that canseriously damage the successor’s reputation and hiswallet. He may walk away relatively unscathed,but a high-profile failure might make secondchances hard to come by.

The successor’s dilemma is exacerbated by thefact that few people in an organization can help the successor and the CEO work out their crisis.Most boards of directors drop out of sight once thesuccessor is hired; they check in only periodically.Similarly, most human resources executives don’tplay a mitigating role, primarily because few ofthem are the kind of trusted advisers necessary tonegotiate a peace treaty between the CEO and hisdesignated successor. Thus the CEO and his would-be heir are on their own to overcome, or be over-come by, the successor’s dilemma. It’s the latterthat happens most often.

But the successor’s dilemma itself can be over-come. Four practices can allay, and even prevent, theproblem. Before he accepts the number two position,the successor can learn as much as possible aboutthe CEO to assess his emotional readiness to leavehis position. The successor can make it a top priorityto maintain regular communication with the CEO.He can also develop and utilize a balanced personaladvice network to help navigate the strategic andpersonal minefields of the leadership change. And,finally, he can stay focused on the endgame –that is,on his professional goals, not the emotional trapsthat surround them.

The successor must be responsible for managingthe dilemma, because it is he who has the most tolose. The CEO’s legacy might be tainted by conflict

with his would-be heir, particularly if it is coveredby the media. The board may take a hit to its credi-bility, having bungled one of its primary jobs. Andmany employees stand to suffer if the CEO and thesuccessor battle it out. But no one pays the price ofthe successor’s dilemma quite like the successorhimself. He must own the problem –and its solution.

The Succession Minefield Botched leadership transitions occur with alarm-ing frequency. John Walter was installed as pres-ident of AT&T in October 1996 – and was gonewithin nine months. Disney put Michael Ovitz inplace as president in August 1995; he departed latethe next year when his relationship with chairmanMichael Eisner soured. A likely heir apparent atCitigroup, Jamie Dimon, exited in 1998. And justthis past summer, Merrill Lynch president andchief operating officer Herb M. Allison resigned before claiming the top leadership position manythought was his.

The evidence isn’t just anecdotal, however. Look-ing at records from 1992 for thousands of publiclytraded companies, we identified 94 that had ap-pointed a new person to the position of chief operat-ing officer that year. Of those 94 would-be CEOs, 35were brought in from outside the organization. Fiveyears later, 22 of those executives had left the com-pany before being promoted and four were still intheir original position – fully 75% had not made itto the top as expected. (This article focuses on thetransitions of successors hired from the outside. Fora brief discussion of internal successions, see thesidebar “It’s Different from the Inside.”)

Just as it would be impossible to link every failedmarriage to a single phenomenon, it’s impossible toattribute every failed leadership transition to thesuccessor’s dilemma. But our research and experi-ence strongly suggest that it is, by far, the dominantdriver of failed successions. Indeed, one of us hasserved as an adviser to CEOs and their would-besuccessors during more than 100 transitions in thepast 25 years. In every one of those cases, the suc-cessor’s dilemma was at work, wreaking its uniquebrand of personal and organizational havoc.

An All-Too-Human Dynamic The dynamics of the successor’s dilemma can beginlong before the successor sets foot in his new office.Even if a company is successful, the board typicallywants to bring in a second in command who canmeet an anticipated challenge – an emerging tech-nology, for example. That is why the board and the

Dan Ciampa is an adviser to senior executives, particu-

larly during their leadership transitions. From 1985 to

1996, he was chairman and CEO at Rath & Strong, a

management consulting firm in Lexington, Massachu-

setts. Michael Watkins is an associate professor at Har-

vard Business School in Boston, where he conducts re-

search on leadership, negotiation, and organizational

change. They are coauthors of Right From the Start: Tak-

ing Charge in a New Leadership Role (Harvard Business

School Press, 1999).

CEO often agree that theymust bring in a so-called“change agent” to eventuallyrun the organization. Whenthe search produces such aleader, the board makes itclear that great things are ex-pected of the designated suc-cessor –and fast.

And so the new successorplunges in to learn aboutproducts, markets, and inter-nal processes. Even for execu-tives with years of experience,the learning curve can be quitesteep in the early months; af-ter all, no two companies areidentical. At the same time,the successor must learn tooperate in an unfamiliar cor-porate culture. Indeed, hemust make a new politicalsystem work to his advan-tage. That means buildingcredibility with people whonow report to him – some ofwhom expected to be namedto the job he was hired to fill.As one executive told us abouthis early days in the succes-sor’s position, “I thought I waspretty prepared coming intothe job because of my back-ground in finance and becauseI was head of marketing [atmy former company]. Thosewere the areas that needed at-tention here, too. But I didn’t count on the culturebeing so different. The marketing issues were toughenough, but I had to get people to think differentlyto get things done faster, and to get them to workacross departments and functions. That was justbrand new to them.”

In the midst of this intense learning period, thesuccessor must also try to build a relationship withthe person he hopes to replace, a process that is rid-dled with pitfalls. Because he’s coming from theoutside, the successor barely knows the CEO andtherefore enters the relationship gingerly. The suc-cessor usually avoids challenging the CEO evenwhen he disagrees with him. That reticence is un-derstandable, but it can plant the seeds of trouble.Take the case of the executive who joined a large fi-nancial services company as chief operating officerand expected to take over in three years when the

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chairman retired. The chairman had helped shapethe industry, had founded the industry association,and had trained several executives who went on tobecome successful CEOs at other companies. Hewasn’t an arrogant person, but the chairman’s repu-tation made him an intimidating figure.

The financial services company was in goodshape but had room to improve. It needed to im-prove the efficiency of its business operations in or-der to keep costs down. The new successor quicklyspotted ways to do so, but he didn’t know how totell the chairman without sounding disrespectful.In fact, he kept his opinions to himself and publiclysupported the chairman’s status quo approach tothe business. In this case, the board recognized thebind the COO was in and helped him resolve it.Much more often, the successor’s silence can leadhim to frustration and anger.

The successor’s dilemma is clearly atough challenge for executives comingfrom outside the company. But whatabout executives moving up from in-side the business? They’re better off, according to our research. We foundthat about half of the internal succes-sors in our study were promoted to CEOwithin five years compared with about aquarter of the successors who had beenhired from the outside.

Without question, internal CEO can-didates have an edge because they al-ready understand the organization’sculture and politics and have estab-lished relationships with the CEO andother senior managers. But the fact that half aren’t successful in becomingCEOs indicates they still face substan-tial challenges:" They must recast their relationshipswithin the organization as they becomethe boss to former coworkers and su-pervisors. Colleagues who were passedover for the successor’s job often pre-sent the most difficulty; they resist thenew leader’s direction much more thanthey would resist directives from some-one brought in from the outside. " They must modify people’s expecta-tions of them. The organization knowsthe insider as he was. But once he is pro-moted and given a mandate for change,

the successor mustintroduce new ways ofoperating the business,hold people to higher stan-dards, and spend time withnew stakeholders, such as theboard." They must rebuild the top teamor create a new one, either by hiringfrom the outside or by moving peo-ple up from within the organization.While the successor almost certainlywon’t move people around much dur-ing the transition itself, he will have todeal carefully with colleagues who arejockeying for position and trying to secure their jobs in anticipation of histakeover.

Inside and outside successors doshare one challenge. Both must dealwith the strong emotions – and inevi-table resistance – of the CEO. Just be-cause the successor comes from withinthe company, that doesn’t mean the CEOwill let go more easily. Nor does the suc-cessor’s insider status mean that hewon’t want to make his own bold markduring the transition period. If the twoindividuals had any problems before thetransition, those conflicts will be accen-tuated now. If the two executives hadno problems, some are sure to develop –and will demand careful attention.

It’s Different from the Inside

The CEO’s View

If the successor is facing new and daunting chal-lenges, so too is the CEO. Indeed, our experienceand research indicate that he typically passesthrough three distinct phases after a successor isdesignated. In the first phase, he feels pleased withhaving “done his duty” by installing a replacement.That satisfaction can last several weeks or severalmonths, depending on how quickly the successormoves to make changes.

When the successor starts shaking things up,however, the CEO enters the second phase – grow-ing discomfort and gradual resistance. While hemay be happy to have found a suc-cessor to whom he can entrust thecompany, the CEO soon discoversthat the cost of a smooth transi-tion is having to give up control.He is confronted with the reality ofhanding over important decisionsto someone who can certainly runthe organization well enough butwho has a different style and differ-ent priorities. The CEO must faceup to the fact that his successorwill run the company differently –and that just feels wrong. He still wants the tran-sition to go forward and tries to hide his defensivereactions, at least initially. But that doesn’t makehis feelings less intense.

As the CEO struggles to retain some control, healso discovers that having a successor requires himto share the limelight in his interactions with theboard, stock market analysts, and the press. Ac-cepting that shift requires a level of humility thatmost CEOs are not known for. One CEO we ob-served relished his high profile. Tensions quicklydeveloped when he hired a COO who was an ag-gressive change agent. Matters came to a headwhen the COO was on a business trip. The CEOused the opportunity to change reporting relation-ships: he assigned the head of IT to report to thechief financial officer, who reported to the CEO.Even though the move stirred up tension within thecompany, it helped the CEO retain the sense thathe was the one in charge.

Also in the second phase, chief executives beginto confront the question of what to do once they re-tire. For people who have devoted every thoughtand energy to the job for many years – and who de-light in their identity as CEO – this can be a diffi-cult, even terrifying, consideration. Research on re-tiring CEOs points out that many chief executivesof successful companies are anointed heroes by

grateful employees or investors. As a result, theycome to believe not only that they deserve suchpraise but also that they are indispensable to theongoing success of the enterprise.1 As they contem-plate leaving, their heroic self-concept revolts.They cannot live without the company that definesthem, and they believe that the company cannotlive without them.

In this context, many CEOs start to ponder themeaning and extent of their legacy. They ask them-selves what they will be remembered for – andmany realize that it might be overshadowed, or per-haps even diminished, by what the new leader istrying to do. For instance, one CEO had spent much

of his career building his company’smanufacturing capabilities; underthe CEO’s leadership, the com-pany had bought or built 15 plantsacross the United States. His suc-cessor, he knew, would likely sellthem all to focus the companymore on providing services. Simi-larly, another CEO considered hisgreatest accomplishment at hiscompany to be the creation of aculture in which employees caredfor and respected one another. In

the name of improving financial results, his succes-sor would surely dismantle it, the CEO realized, toinstall a more performance-driven atmosphere. Ra-tionally, both CEOs knew their successors had tomake the changes; indeed, they had endorsed thosechanges themselves. But that didn’t stop their feel-ings of sadness and resentment about the newplans. A legacy is a deeply painful thing to lose, andemotions can take over.

As the CEO feels his power in eclipse, the succes-sor’s impulse is to push for more and deeper change.With a few successful initiatives under his belt, hecalls more openly for renewal and reinvention, andhe articulates more widely his vision for the com-pany. That only exacerbates the CEO’s alreadythreatened sense of identity and control, and hedigs in his heels. The two “sides” enter into moreopen conflict, and communication between themfalls off precipitously. Indeed, it is at about thistime that phase three – active resistance – begins to emerge.

What often happens next is a turning point fromwhich there is no easy return. The CEO calls forsupport from his troops –mostly members of his se-nior team. Many are willing accomplices. They arefeeling overwhelmed by the successor’s changesand have strong personal ties to the CEO. As soonas the CEO shows disagreement with the succes-

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As the CEO feels hispower in eclipse, thesuccessor’s impulseis to push for moreand deeper change.

sor’s style or direction, even subtly, the senior teamfeels free to operate around or without the desig-nated successor – for example, going directly to theCEO with ideas or plans.

The dynamic spirals downward from there.Thinking he has no other alternative, the successorcontinues to pursue his change agenda to win theboard’s approval. In fact, in many cases he triesharder than ever to post impressive results. Ironi-cally, if the successor succeeds, the CEO feels evenmore threatened, which causes the relationship todeteriorate further. If he doesn’t succeed, the CEOpoints to that as evidence that the successor doesn’tdeserve the top job. In either case, right around thetime the successor should be getting ready to moveup, he is facing the fact that the CEO wants him toleave. In most of those cases, after a period of awk-ward or painful thrashing about on both sides, thesuccessor does leave.

Meeting the ChallengeLeadership transitions are high-stakes situations,but the fact is, most people aren’t prepared to meetthem. That’s not surprising. Few executives gothrough more than one high-level leadership changein their lifetime. The first step toward becomingprepared is understanding the dy-namic that undergirds a changingof the guard. Indeed, just knowingthat a psychological drama is atwork is useful. But such under-standing is not sufficient – actionis. And that action, as we noted, isthe successor’s responsibility. Vir-tually every number two executivethat we have observed and workedwith makes the same point: don’texpect anyone to solve this prob-lem for you, including the CEO. As one successor who overcame a difficult transition said, “If mydaughter were going through this, I would tell her that the way to in-crease the likelihood of making a successful tran-sition is to never assume that anyone else cares asmuch about your success as you do. You have totake on the process yourself.”

That process, we have found, includes the follow-ing practices:

Learn as much as possible about the CEO, profes-sionally and personally, before signing on. The suc-cessor can help himself by doing his homework be-fore taking the job. As he learns about the company,he should make it a point to learn, too, about the

CEO’s career and personality and how he mightdeal with the reality of his own retirement. That re-quires delicate investigation, and solid answerscan’t be guaranteed. Nevertheless, the executivesearch firm should be able to shed light on theCEO’s state of mind, and the successor might alsogather relevant information from interviews withboard members who know the CEO well.

An executive can also discuss the transition pro-cess with the CEO himself –making sure, of course,not to suggest that he is anxious for the CEO to stepaside quickly. In such a dialogue, a successor candi-date can get a sense of the CEO’s views on leader-ship transitions by asking questions about theCEO’s own shift to power. Was it smooth? Wasthere an adviser involved? Is that person still avail-able? What was the role of the board? The informa-tion uncovered in such a diagnostic process maynot stop a successor from walking into a difficultsituation, but at least he will be more prepared forthe challenges he meets along the way.

Maintain regular communication with the CEO.As simple as it sounds, talk is a powerful antidoteto the successor’s dilemma. If a successor findsways to make sure he and the CEO are in near con-stant conversations, he has gone far to prevent themisunderstandings and missed cues of the fragile

leadership-in-transition dynamic.Unfortunately, it is easy for thesuccessor and CEO not to talk.Both are busy, usually with differ-ent initiatives, and both travel.Both executives also have differentsets of colleagues and friends with-in and outside the organization,which makes impromptu conver-sations less common.

To overcome those obstacles,the successor must seize every opportunity to spend time withthe CEO. The successor can – andshould – travel with the CEO tovisit business plants or customers.He should take the lead in setting

up regular meetings with the CEO to review thebusiness –and he should go into those sessions withmore questions than assertions. Meetings workbetter when they are dialogues, not reports.

The successor also might make it a point to talkto the CEO before announcing a major decision,such as an organizational change or an alliance. Infact, the most savvy successors use such meetingsto test their ideas and solicit the CEO’s input. That’sgood for the business and great for the relationship.Which leads to another point: communication be-

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Right around thetime the successorshould be gettingready to move up,

he is facing the factthat the CEO wants

him to leave.

tween the successor and the CEO is good in and ofitself, but it’s even more effective when the suc-cessor makes sure that his words communicatesincere respect for the CEO. If overdone, respectcan sound obsequious, but when a successor praiseshis boss occasionally and genuinely, it sets a tonethat goes far toward defusing the tensions of thesuccessor’s dilemma.

Assemble and frequently confer with a bal-anced personal advice network. Because few com-panies have built-in systems to facilitate leader-ship transitions, successors must create theirown network of advisers to help them navigatethis minefield. The best networks for this purposeinclude some people who can offer advice onstrategy or operations, and others who can offercounsel on the political realities of a company go-ing through an operational change and a leader-ship handoff. Balanced personal advice networksshould be composed of a judicious mix of externaland internal advisers. External advisers should bedrawn from the successor’s mentors, colleagues,and friends outside the company; they shouldhave only his interests at heart. Internal advisersshould have the requisite technical knowledgeand deep insight of the company’s operations, his-tory, politics, and culture.

The usefulness of a balanced personal advicenetwork can be seen in the case of one successorwho found that the culture of the company he hadjoined stood firmly in the way of his plans for fast-paced change. The company’s customer servicewas poor, and the designated successor quickly de-termined the reason. “We never delivered to ourcustomers on time because the production sched-ule was based on relationships, not procedures,” he recalled. “If a product manager was launching a new product and needed the plant manager tochange the schedule, they’d negotiate it at the cardgame on Friday night or over a beer. It would neverget done at a production meeting. So people whodidn’t know how to play the game were at a real dis-advantage, and our costs and schedule in the plantwere a mess.” The successor knew he couldn’t turnto the CEO for help. “He had helped to create thatculture,” he explained.

The successor sought advice from two people.One was a consultant who had previously workedwith the company on improving its operations andits culture. The consultant was respected by man-agers throughout the company and by the CEO.The second person was his retired boss and mentor,who understood production supply problems andwas creative in solving them. Just as important, hisformer boss cared deeply about the successor’s career.

Over the next few weeks, the consultant metwith a cross section of people who were involved inproduct supply, mapped the decision-making pro-cesses, and calculated the costs of the current wayof operating. He also met with the successor and thesuccessor’s former boss to review his findings. To-gether, the three formulated and implemented astrategy that resulted in major improvements in cus-tomer service. Best of all, they did so without ruffling

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The story of Bill and Howard begins like a leadershiptransition bound to fail. It didn’t. Bill, a talented execu-tive brought in to succeed Howard as CEO of a large man-ufacturing company, used several simple but highly effective practices to stop the successor’s dilemma in itswell-worn tracks.

Bill and Howard’s problems began about two years af-ter Bill joined the company as president of internationaloperations. Bill hadn’t been given an outright guaran-tee that he would make it to the top position, but he had received strong assurances. Howard, he was told, hadagreed with the board that he would retire in three years.If all went well, the CEO’s post was Bill’s.

Both Howard and the board had exhorted Bill to get in-ternational operations back on track. The division hadbeen strong in the past, but performance had suffered asaggressive competitors made inroads. To make mattersworse, two recent product launches had failed, and costswere rising. Despite those problems, the company’s newstrategic plan called for double-digit growth outside theUnited States. It was up to Bill to achieve that.

Bill got off to a good start, and within a year and a halfhe was making solid improvements. He had acceleratedproduct launches, cut manufacturing costs, and stream-lined distribution. Market share rebounded, and profitsclimbed. Bill was on a roll, and the financial communitytook notice.

Along the way, Bill kept Howard informed of his actionsand saw no indication that he disagreed. But just as Billbegan to post good results, his relationship with Howardstarted to sour. In year-end reviews, Howard praised Billpublicly for what he had accomplished. But both mencould feel a chill. One obvious reason was that they simplydid not spend any time together. Bill’s international travelprevented it. But there were other problems, too.

Bill was feeling increasingly restless. When would theboard and Howard start talking about succession? Surely,he thought, he had earned the top job by now. Meanwhile,Howard was developing cold feet. He was only and ingood health. Bill had been with the company for less thantwo years. Now that the international division was back

A Succession Saved from the Brink

too many feathers –one of the prime virtues of a bal-anced personal advice network.

A final way in which a balanced personal advicenetwork can be used is in mediation. A board mem-ber, an outside adviser, or a senior staff member canbring the successor and CEO together if he has thetrust of both parties and if he has no vested interestexcept in wanting to see a positive resolution. Sucha person might also be able to reason with the CEO

in a way that the second in command cannot. (Foran example of such facilitation, see the sidebar “ASuccession Saved from the Brink.”)

Stay focused on the endgame. Because of the in-tensity of emotions and competitive spirit of manysuccessors, they may consider a disagreement withthe CEO as a contest to be won. They temporarilylose sight of their ultimate goal: to move to the topand lead the company forward. One successor who

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on track, why shouldn’t he remain and lead the companyhe had spent close to a decade building? These are the bestof times, Howard told himself, so why leave now?

After a few small snubs from Howard, Bill consideredasking him to talk things over but decided to wait. For onething, he reasoned, if Howard thought that he was tryingto push him out prematurely, a meeting might backfire.Anyway, he decided, it was up to Howard to initiate a dia-logue. Bill concluded that his best course was to keep post-ing great results.

In the next few months, Bill accelerated his pace. He cutcosts again in the plants and entered into a major distri-bution alliance – without consulting Howard. The agree-ment meant that the international division would need tohit more challenging targets than ever, but Bill believedthat the pact’s benefits far outweighed the temporarystress it might cause. He also knew the deal would catchthe attention of the board, who might then advocate forhis promotion.

The deal did get attention, but it also angered Howard,and the CEO’s active resistance began. He started tellingother executives that Bill was taking too much cost out ofthe plants and that the new alliance was full of booby traps.Howard grumbled to himself about being left out of theloop and upstaged. He was still CEO, wasn’t he?

It soon became apparent that Bill’s new distribution al-liance was a success. It increased revenues, and whenpaired with the cost cutting, boosted profits. The boardwas delighted; they decided that Bill had earned the rightto be named chief operating officer and to be nominated to a board seat, publicly putting him in line to succeedHoward.

Over the next weeks, Howard went from remote to icy.He never congratulated Bill on his promotion and nevermentioned the board position at all. Howard continued tomake all the corporate decisions and said nothing about ahandoff. Bill became increasingly worried that Howard hadchanged his mind about retirement and that he’d beenparked in a job with no power. Tensions hit a peak when a national business magazine wanted to spotlight the com-pany and wanted to put Bill on its cover. Howard vetoed it.

Now Bill was angry. His first impulse was to leave; he hadgotten several calls about attractive management posi-tions in larger companies. At the same time, he wanted to

complete what he had started in a com-pany he had come to like. So he turned to twokey people in his personal advice network – hiswife and a trusted outside adviser. Bill accepted thechance to step back, count to ten, and more rationallydecide on the best course of action.

He consulted several board members confidentially.Howard would have been threatened if he had knownabout the meetings, but it was worth the risk to Bill. Hewanted to affirm the board’s commitment to Howard’s retire-ment –and to Bill as the next CEO.

Bill then approached Cliff, the company’s chief financial offi-cer, whom he had come to trust. His appeal to this internal ad-viser – who also was respected by Howard – is what helped thissuccessor story have a happy ending. Cliff opened Bill’s eyes towhat Howard was going through – his unease about losing hisidentity as CEO and his fear that his legacy might be eclipsed.“Bill, we’re talking about his emotions here. This has nothing todo with your performance,” Cliff told him. “Howard needs anexit plan, one that lets him leave gracefully and go to somethingthat he’s excited about. He’s keeping all this inside because he’sused to being the one with the answers.”

As he and Cliff talked, Bill realized that a smooth transitionwas as important to his success as any of his strategic or opera-tional accomplishments. Bill knew that the managers whosesupport he needed in order to be a successful CEO were loyal toHoward. He couldn’t appear to be forcing Howard out. More-over, Bill respected Howard. He wanted to see him leave withthe credit he deserved. He knew he had to speak with Howardand begin to work toward a transition that made sense to bothof them. Cliff agreed to facilitate the discussion.

The first meeting lasted six hours. The executives began byfocusing on the distribution alliance and on Howard’s anger atnot being consulted about it, but the discussion quickly movedto deeper issues in the relationship. Although the meeting wasawkward for both leaders, they were able to share their con-cerns with help from Cliff. Howard expressed his misgivingsabout leaving the company and going into retirement. Bill as-sured Howard he had no intention of rushing him from hispost. By the end of the session, the successor and his bossagreed to meet in person every two weeks and have monthlycheckup sessions with Cliff present.

One year later, Bill did indeed succeed Howard in a smoothleadership transition that almost got away.

turned from his trip. But he soon realized this wasnot a battle to pick. The CEO only wanted to showthe organization he was still boss. The successorquietly met with the chief financial officer, and to-gether they decided they would both work with thehead of IT. “I decided that I could still get the changesI wanted in IT,” the successor recalled, “and thatthe only reason to make an issue about it was myego.” He let the CEO’s pride win instead, and hewent on to land the top job 18 months later.

A Timeless DramaThe poignant and often painful drama of successionis ages old. As one person rises to new heights, an-other must fall, or at least step back from the spot-light. Thus succession forces its players to confrontthe hard and eternal human questions of power and identity. And they must do so with many eyeson them, including the media, their colleagues, andtheir families. But the hardest audience the charac-ters in the succession drama must face are them-selves and each other.

Yet leadership transitions can be managed inways that make success more likely. The successorcan prepare for the challenge before joining the or-ganization. Once he does that, he can work assidu-ously to create a good relationship with the incum-bent leader. He can also draw on the outside help ofadvisers. In the end, the success or failure of a lead-ership transition belongs to the successor, and it al-ways will.

1. Jeffrey A. Sonnenfeld, The Hero’s Farewell (Oxford University Press,1988).

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168 harvard business review November–December 1999

The Successor ’s Di lemma

failed to make the transition to the top slot lamentedafterwards, “I had decided early on what I wantedbefore any of my friends did – the kind of job and the sort of place I wanted to work at. When I got thesuccessor’s job, it was like I had gone to heaven. Itwas all right there.” Then, he recalled, “I got drawninto a battle that I never intended to fight. I let my-self get distracted by my feelings and pride, and Itook my eye off the real goal.” This leader failed tomanage his emotions. He let the successor’s di-lemma get the best of him. Scrambling toward hisgoal, he didn’t know when to pull back or how to doit gracefully. Leaders must be able to do both of thosethings to manage the successor’s dilemma.

One way for the successor to keep his emotionsin check is to practice empathy and focus on whatthe CEO is going through rather than on his ownexperience. One designated successor embroiled in a difficult transition came to understand whathis boss was experiencing, with some help from hiswife and two board members. They helped him seethat the CEO’s actions, such as overruling the suc-cessor’s decisions and taking over his meetings,didn’t prove that he had changed his mind about re-tiring. Rather they showed that the CEO was strug-gling with losing the position that gave him hisidentity. The successor’s wife put it most directlyby saying, “This is not about you. [The CEO] is notthinking about you at all as he’s doing these things.It’s all about him.”

Perhaps the hardest part of managing the succes-sor’s dilemma is allowing the CEO himself to saveface. It can also be the most critical part. Take thecase mentioned earlier in this article about the CEOwho changed reporting duties while his successorwas away. At first, the COO was angry when he re-