The Path Ahead: Some Thoughts on CEO Transitions
By Todd D. Smith
This article was published in Museum News January/February 2007.
Anyone who has a passing knowledge of the museum industry knows that one of the biggest issues facing us is leadership and the frequency of CEO transitions. Most of us work at institutions that have experienced CEO turnover in recent memory. The impact of these transitions is far-reaching. They not only take a toll on the CEO but also on two organizations, the one being left and the one being joined.
While there is significant literature on CEO transitions, it is almost exclusively geared toward the for-profit world. Some of the nuances of nonprofit transitions are not addressed. The subtleties of CEO and nonprofit board relationship and the CEO and staff relationship often require a different approach to transitions.
I considered writing about my transition in 2006 from director of the Knoxville Museum of Art to executive director of the Gibbes Museum of Art in a Bridget Jones style (Dear Diary, Day 1: Announced resignation, had three cocktails and two bowls of ice cream). Instead I landed on a slightly more serious focus, three key moments in the transition: the resignation announcement to the board president, the countdown from the announcement to departure and the first 100 days on the new job.
The Announcement
At some point in our lives, we have all sat across the table from someone with whom we’ve been involved in complex and intimate ways and told them that we are moving on, that we have found a new partner who will better meet our needs. Whether it is a boss or a lover, the effect is the same. The moment the words exit your mouth—“I am leaving”—you are a different person. You have told someone very close to you that they don’t matter as much as they did five minutes earlier. While you are feeling elation and excitement, they are wrestling with disbelief, abandonment and hurt. Soon these feelings are coupled with fear and anxiety over what the future holds for the left behind (or, as a colleague called them, “LBs”).
While the melodrama of a break-up might seem too Dr. Phil for the hard science of leadership and management studies, there are significant human costs that accompany transitions. A change in leader for a museum has a much greater impact than many might believe at first glance. In literature on this subject, much attention is placed on gearing up for the next position. Very little emphasis, unfortunately, is given to managing your exit from the current post.
Once you make the announcement to the board chair and then to the entire staff, your standing undergoes a dramatic change. Board members begin to wonder how the search will go, how long they will have to take on added responsibilities, whether the museum is attractive enough for potential candidates and what this transition will do to the momentum currently underway. In your favor is that many of these board members have moved from job to job and are more likely than the staff to understand.
The staff immediately filters your decision: How will this change in leadership affect me, my programs and my position within the organization? If you are tuned into your senior staff, watching their actions becomes an interesting exercise in human behavior. I was amazed, despite knowing better, by how predictably each senior staff member reacted to my announcement that I was resigning. For some, the jockeying for power began before the words had left my lips; others who directed pet projects that I had endorsed were deeply concerned about their projects’ futures. Some were relieved that the one impediment to their mission for a program was now going to be out of the way, and finally, there were those who couldn’t have cared less.
As the six weeks progressed from my announcement to my departure date, I watched as senior staff and board members moved to assume roles necessary for their success without a director. This is not a sinister occurrence; rather, it is much needed. Psychologists have termed this stage “decathexis”: a natural process by which we distance ourselves in order to move forward.
The Countdown to Departure
If not managed properly, the countdown to a CEO’s departure can be likened to a tennis match, with the CEO as the ball that gets batted back and forth between his or her past at one organization and his future at the second. The CEO should be a much more active player in this drama.
One of the first tasks the outgoing CEO needs to tackle is understanding the level of authority you still have as an outgoing director. Undoubtedly, the board will want you to devote as much of your remaining time to ensuring that the organization is as efficient as humanly possible (even if you are in the midst of major changes). You also must recognize that your level of authority will change as your departure date draws nearer. The board and the staff need to process the implications of your move and consider how it will affect their individual duties and responsibilities.
One piece of advice that served me well in my own recent countdown: Have one or two projects to complete before you leave and make sure that these projects are mostly or wholly yours to complete. As your time dwindles, so does your ability to get anything done. The more work you have that is solely yours, the more likely you will keep a higher level of satisfaction as you wind down. Writing projects are ideal; they afford private attention and individual resourcefulness.
If possible, conduct reviews of your direct reports, but try to avoid the temptation to put into their permanent records all of those things that you didn’t have the courage to note earlier. Rather, view these as you would any other performance review.
One important question about the countdown concerns time. What is the appropriate amount of notice? When is your presence beneficial, and when does it become detrimental to the organization and to yourself? Many board members will want the outgoing director to give significant notice, in an attempt to buy time to organize the search and ensure that operations continue efficiently. With too much time, however, the sitting director becomes a liability. The important process of decathecting must begin soon after the initial shock has passed, so that the staff and board realize that they will be fine and that this moment is one of opportunity for the organization. It is an opportunity to take stock of the organization’s direction, its effectiveness and its challenges and use this assessment to identify the strengths needed in the next CEO.
With the exception of a retirement, the outgoing part of a smooth transition should last no longer than six weeks; this allows for the necessary steps so that the board does not feel abandoned, the staff can assume more of its enhanced duties (while still having a safety net) and the outgoing director has enough time to wrap up pending projects, begin to envision the organization in its next phase and enjoy the accolades of completing a job well done.
It is highly important that you use the countdown period to get your own head in order. What a perfect time to reassess your strengths, refocus your management style and revisit your favorite thought leaders on management topics. If you have fallen into bad habits of managing or realize that there are significant issues that you chose to avoid, take this time to analyze how you can avoid the same traps in your next position. During my countdown, I took the opportunity to re-read some classic literature of effective executives by the late Peter Drucker. His skill at hitting the high notes is superb, and his 2004 article “What Makes an Effective Executive” for the Harvard Business Review should be required reading for all transitioning CEOs.
First 100 Days
The first 100 days in any new role are key; you have this first opportunity to present and in turn fashion your working style. Your actions, words, customs, working schedule and interpersonal skills will be scrutinized in a sharp, raking light. If you have used the countdown period to its best advantage, you will be psychologically and physically ready to meet this very important first test with skill and aplomb.
In his article cited above, Drucker suggests first asking, What needs to be done for the enterprise? (and not what do I want to do) and then deciding what the two or three major tasks that you are best suited for tackling. The second focus should be on action plans. As Drucker points out, these are statement of intentions rather than commitments. Finally, an effective new CEO will think and say “we” rather than “I.” On this last point, Drucker approaches the definition of a Level 5 leader that Jim Collins describes in Good to Great. A Level 5 leader is one who is highly ambitious for the organization and not for him/herself.
Before you attempt to tackle every problem, remember that you are the one who is the most ignorant of the organization at the exact moment you are asked to be the most enlightened. An early misstep is debilitating, and over-promising is one of the most typical missteps. You have been hired for your previous accomplishments—believe me, save up that bank of goodwill until you really need it.
But the key point for a successful transition is to leave your past behind. Nobody wants to be reminded how you did it at the last museum, just as you do not want to be reminded how your predecessor did it. There needs to be an understanding between you and the new organization, an understanding that is established early on. At my first meeting with the staff in Charleston on my first day, I told them that I would work diligently to limit references to practices at the Knoxville Museum of Art and I would ask them to likewise focus on the future and how as a group we could achieve our own successes and tackle the unique challenges we faced. Each institution is different, and it is your job to understand the uniqueness of the new organization before launching new plans.
The first order of business for a new CEO is to figure out where the real power lies within the organization. Is it with the full board, the executive committee, the board chair, a few key donors or the staff? Also try to determine which group needs your attention the most. If you decide that the board is highly engaged in the museum and in need of direction, then you should make their access to you the highest priority. If you find, however, that it is the staff that is the most in need of attention, then you should work assiduously to build a level of trust that conveys that you care, you listen and you need help in moving forward.
In most cases, it is the staff that needs a leader more. They have been in a liminal space during the transition, and it is their satisfaction in the job that signals success for all CEOs. I had a meeting with the full staff early on my first day. I used the opportunity to discuss who I was, what my pressing priorities for the first 100 days would be (but stopped short of outlining an actual agenda) and disabused them of any ideas that I had already formulated a new vision for the museum. Rather, I expressed that my goal for the 100 days was to listen and learn. I let them know I would be asking tons of questions and that many of them might seem stupid.
At the end of the meeting, I asked the staff two questions. The first, “What do you feel is the one most important strength of the organization?” allowed me to let the staff be boastful and show me what they were most proud of. (A mistake would have been to follow up this question asking what the biggest weakness is. There is plenty of time to discover those.) The second question, “What is the one thing you want to know about me?” was meant to demonstrate that my management style is one of approachability, alleviate any anxiety about who I am and reveal a human side. The questions ranged from “Are you a workaholic?” to “What do you see the museum’s role to be in collecting contemporary art?” and reflected a curiosity and range of interests.
The second stage of getting to know the staff consisted of asking for individual meetings with each full-time staff member. As you can imagine, there was trepidation and anxiety around these meetings. At each meeting, I asked the staff member only three questions: What do you hope I don’t change? What do you hope I do change? What advice do you have for me? The conversations were confidential, and most employees quickly realized that I wanted real answers, not sugar-coated responses. The meetings revealed the level of organizational knowledge employees possessed, their level of engagement with the issues facing the museum and their maturity about organizational effectiveness. These three areas have served me exceedingly well in organizing my plans for the museum’s growth.
At the end of the first day, I sent the board a quick e-mail in which I thanked them for putting their faith in me and told them a brief bit about what I had done that day. The museum had several public events that happened to coincide with my arrival, and I took that opportunity to meet many board members in an informal setting. My first official interaction with the board, however, was an executive committee meeting during my third week. I spent the first 45 minutes of the meeting without speaking. I wanted to watch how the individual members engaged with one another and the materials on the agenda. I learned more about the power of the organization in those 45 minutes of observation than I could have at any other forum.
I then asked that the committee go into an executive session so that I could speak freely about what I saw as my duties for the first 100 days and let them know what I was finding as I continued to ask questions of the staff. I also used this time to gauge how the executive committee expected me to interact with them. I used a proposed new organization chart to understand how this group saw the role of the executive director and how much input they expected to be able to give in the running of the organization. While every board knows that day-to-day management is not its role, there are varying degrees of acceptance. A new CEO is wise to wade cautiously into the waters of board oversight.
In the eyes of the board, it is important for the new CEO to appear knowledgeable without being arrogant, for as much as a new board wants to have a strong leader at its helm it also does not want its new leader to appear unresponsive to the community and disrespectful of the culture and history of the organization.
You will need to create a 100-day agenda, which should focus on the three or four most pressing issues that you can address in this period. The key is to undercommit and overdeliver. I established four goals: listen and learn, be visible, assess personnel issues such as filling key openings; and get up to speed on major issues facing the physical plant of the museum. I felt that these four represented the most important demands on the organization and played to my strengths. I made these goals clear to the staff and executive committee early on and used them as the overarching structure for the beginning of my tenure. At the end of this period, I can say that this tactic served the organization and me well.
The museum community continues to wrestle with questions of leadership and how to address what most consider to be a growing problem of too few leaders stepping up to the challenge of being CEOs. It is similarly pressing that we examine the unique anxieties and opportunities for all involved in a CEO transition.
