Having a former CEO who is still active in the business can create confusion about who holds the ultimate decision-making authority. This ambiguity can undermine the successor’s ability to assert their leadership and make critical strategic decisions. Employees may have also built strong loyalties to the former CEO. If the predecessor remains involved, it can create confusion among the workforce and potentially divide loyalties, making it difficult for the successor to build their own team and establish trust.
To address these challenges, it’s essential for both the predecessor and successor to establish clear boundaries and open lines of communication. The former CEO should be supportive and offer guidance without overshadowing the successor’s authority. Otherwise, things can get messy. In Disney’s case, Iger returned to run Disney and replace Chapek last year, after a torrid period for the company during which its share price halved from its 2021 nadir.
Being the catalyst for change
It’s worth noting that organizational challenges can serve as a catalyst for change, which can be more challenging when inheriting a stable business. Identifying opportunities to pivot and re-energize the firm is crucial, but these initiatives should be positioned as part of a broader vision for the organization’s success.
An excellent example of this done well is Satya Nadella, who took the reins as Microsoft’s CEO in 2014. He followed Steve Ballmer, who had led the company for 14 years. Nadella brought a significant cultural shift to Microsoft, emphasizing a “cloud-first, mobile-first” strategy. Under his leadership, Microsoft shifted from a more traditional software-centric approach to a company that embraced cloud computing and open collaboration.
Nadella also recognized the need to be more agile and open to change, which led to a more innovative approach to product development and a willingness to collaborate with competitors. However, Nadella continued to support and develop Microsoft’s core products, such as Windows and Office. These products are integral to the company’s legacy and remain important revenue sources.
Balancing past and future
As well as acknowledging and preserving an organization’s core values and history, also crucial to a successor’s journey is positioning oneself correctly relative to the former leader. It’s essential not to attempt to replicate them but rather to communicate early about your unique leadership style and differences, all while respecting the previous leader’s legacy. Success in following a stellar leader is about focusing on the team’s and organization’s success, not about individual ambitions.
A great example is Tim Cook taking over Apple after Steve Jobs passed. Recognizing Jobs’ legendary status and profound impact on the tech world, assuming his role was a formidable challenge. One of Cook’s initial actions was to pay homage to his predecessor’s legacy. In his early speeches, Cook frequently alluded to Jobs’ core principles and vision.
However, Cook also emphasized that he wasn’t attempting to emulate Jobs, but rather to guide Apple based on his unique values and vision. Striking this balance between honoring the past and charting a course for the future was vital in preserving Apple’s heritage while adapting to the changing times. Indeed, it partly explains the continued prosperity of Apple with Cook at the helm, with the groundwork laid by Jobs.
Ultimately, incoming leaders succeeding admired leaders must navigate their transition with a balance of humility, respect for legacy, and a vision for the future.