We wrote a post about how to make a graceful exit (especially when it’s involuntary) that explored what steps to take when leaving your position. This post is the follow-up that dives into how to identify, assess, and consolidate lessons learned to find the right next job. We’ll explore three key steps to a successful transition plan for CEOs.
Leadership teams that are on track to reach their potential to perform and growhave:
A written, board-approved financial plan that shows revenue, direct costs, gross margin, indirect costs by function (e.g., marketing, sales, HR, R&D, etc.), and operating profit (i.e., EBITDA), by month and quarter for the year. Approved financial plans tend to have the following characteristics:
Smooth (or otherwise rational) ramp-up (or down) of revenue and costs from the prior year closing month and quarter.
Generally upward-trending scale (i.e., ever bigger and better).
A 75% chance of being achieved by the in-place team with roughly 2/3 of planned revenue either booked or highly-probable (B&HP) and a highly-qualified pipeline of prospective, current year, revenue equal to three times the gap between B&HP and Plan (and not all in the last quarter or two!).
Identified upside-downside potential with mitigation strategies on the downside and what will be done to take full advantage of any upside.
Assumptions and triggers that explain what has to happen for planned results to occur and for planned expenses to be made.
You smell smoke. Then come flames! You run into the front yard and turn to look at your home with fear and dread. Now imagine your local, rookie fireman appears on the scene to fight your fire having only ever trained online with no real field-simulation experience!
Firemen train by fighting real fires in a controlled environment to learn how to use the equipment and how to make repairs on the fly when gear malfunctions, such as when a hydrant fails to turn-on as expected. Only experience with a real fire teaches the teamwork needed to work fast and handle unexpected problems.
Many organizations have written a crisis management plan and secured approvals all the way up to the C-Suite, but have never tested the plan in real circumstances to know how it works. Plans that have not been “pressure-tested” in a realistic, simulated situation risk that the team will not work well together and face higher odds of financial and reputational damage, or worse, when the inevitable crisis hits.
Every organization has, or needs, a leader. And it is true that the power of one committed, clear person can make all the difference in the world. But no one individual, even the greatest leader, does anything of much significance alone.
The best leaders know that it is not all about them. It is about their team. Consequently, one of a CEO’s most important jobs (see highlighted text at left) is to ensure that every team member knows what the leader and team expects from her/him to achieve planned results.
How to Empower Executive Teams
A good way for executives to know what team members need from them is to ask each to share views on their own, and on each others’, individual strengths, contributions, growth, and opportunities for development. Continue reading CEO Role→