Summary of HBR On Leadership Podcast Episode: "The Right Way to Step Down as CEO"
Release Date: July 2, 2025
Host: Kurt Nickish
Guests: Rebecca Slan Jerusalem and Navio Kwok, Leadership Advisors at Russell Reynolds Associates
Introduction to CEO Succession
The episode delves into the critical process of CEO succession, exploring how the transition can significantly impact an organization. Host Kurt Nickish initiates the discussion by highlighting the potential chaos that can ensue when a CEO steps down abruptly, often leaving the board scrambling to find a successor and risking the loss of institutional knowledge and trust.
The Importance of CEO Succession Planning
Rebecca Slan Jerusalem and Navio Kwok emphasize that CEO succession is a pivotal event for any company. They argue that while succession is extremely important, it often lacks urgency, leading boards to inadvertently delay crucial planning.
Rebecca Slan Jerusalem [02:29]: "CEO succession for a board and possibly the top team as well, is something that is extremely important but not very urgent because these decisions tend to happen well in advance unless there was an emergency situation."
CEO-Initiated Succession: A Surprising Trend
Contrary to common perceptions, the research discussed reveals that a staggering 83% of CEO successions are initiated by the CEOs themselves rather than being forced out by the board. This challenges the traditional view that poor performance is the primary driver for a CEO's departure.
Kurt Nickish [03:10]: "In your research, you found that 83% of CEO successions were initiated by the CEO themselves, which kind of surprised me a little bit."
Rebecca Slan Jerusalem [03:37]: "In recent years, the performance of the CEO doesn't always have that direct contribution to whether or not they step down."
Best Practices for CEO Transitions
Early and Ongoing Communication
Both Rebecca and Navio stress the necessity of early and continuous dialogue between the CEO and the board to prevent surprises and ensure a smooth transition.
Navio Kwok [10:09]: "It should be a long, ongoing conversation. CEO succession should not be considered kind of a momentary or moment in time. It should be a year's in the making."
Role Clarity and Demarcation
Clear delineation of roles and responsibilities during the transition phase is crucial to prevent confusion and overlap between the outgoing and incoming CEOs.
Rebecca Slan Jerusalem [14:22]: "One CEO said to more clearly demarcate their roles and responsibilities at the end the time at which one person was officially going to be in role."
Involvement of Outgoing CEO
The research highlights that excluding the outgoing CEO from the succession process can be detrimental. Effective succession involves the outgoing CEO actively participating in identifying and onboarding their successor.
Rebecca Slan Jerusalem [08:35]: "Nearly one in four CEOs were excluded from that process entirely."
Emotional Dynamics of Stepping Down
The process of stepping down as CEO is not just a professional transition but also an emotional journey. Outgoing CEOs often grapple with feelings of loneliness, grief, and identity loss.
Navio Kwok [17:18]: "The outgoing CEOs were very much managing their own emotions as well as the board's emotions, the senior team's emotions as well."
Rebecca Slan Jerusalem [19:40]: "Emotions in general... it's a little paradoxical to expect someone to have that skill, but there's no opportunity to really kind of practice it."
Maintaining Identity Beyond the CEO Role
Rebecca underscores the importance of not tying one's identity solely to their professional role. This perspective is vital not only for CEOs but for professionals at all levels to facilitate smoother transitions and adaptability in an ever-evolving job market.
Rebecca Slan Jerusalem [23:53]: "Don't fully tie your identity to either your job or a role... align your identity to that kind of message for you and your role."
Practical Lessons for Executives and Leaders
The episode concludes with actionable advice for executives and leaders preparing to hand over their roles:
- Develop a Strong Successor Pipeline: Ensure there are qualified internal candidates ready to step into leadership roles.
- Foster Transparent Relationships: Build and maintain strong, trusting relationships with the board to ease the transition.
- Manage Emotional Well-being: Recognize and address the emotional challenges associated with stepping down.
- Plan Beyond the Role: Strategically think about personal and professional goals post-transition to maintain a balanced identity.
Navio Kwok [27:20]: "Thinking about that, having regular conversations, planning for it before the last day is really important."
Conclusion
Rebecca Slan Jerusalem and Navio Kwok provide insightful analysis and practical guidance on CEO succession, emphasizing the importance of proactive planning, clear communication, and emotional intelligence. Their research underscores that successful leadership transitions require deliberate strategies that consider both organizational needs and the personal experiences of outgoing leaders.
Notable Quotes with Timestamps:
- Rebecca Slan Jerusalem [02:29]: Highlights the non-urgent yet critical nature of CEO succession.
- Kurt Nickish [03:10]: Surprised by the high percentage of CEO-initiated successions.
- Navio Kwok [10:09]: Advocates for a long-term succession planning process.
- Rebecca Slan Jerusalem [08:35]: Points out the exclusion of outgoing CEOs from the succession process.
- Navio Kwok [17:18]: Discusses the emotional management required during succession.
- Rebecca Slan Jerusalem [19:40]: Emphasizes the importance of naming and addressing emotions.
- Rebecca Slan Jerusalem [23:53]: Advises against tying personal identity solely to one's professional role.
- Navio Kwok [27:20]: Stresses the importance of early and regular planning for succession.
Final Thoughts
This episode serves as a comprehensive guide for organizations and leaders navigating the complexities of CEO transitions. By integrating research-backed insights with real-world examples, Rebecca Slan Jerusalem and Navio Kwok offer valuable strategies to ensure that stepping down as CEO is handled with foresight, respect, and emotional intelligence.