How One CEO Prepared Her Organization for Her Retirement

Last year I decided it was time to shake things up at our investment management company.  After 12 years as president and then CEO, I thought it was time to shift some of my responsibilities to my partners.

Research suggests that organizations and their boards are poorly prepared for CEO transitions. The most common transgression is procrastination, in failing to charge the next generation of managers with more responsibility. Not only are CEOs reluctant to pass on key functions that they consider essential elements of their own identity, but their boards have difficulty pushing for these necessary changes.  When the CEO does depart, companies find themselves lacking leaders who are experienced in critical aspects of the top post. This may be especially true in relatively small businesses, like mine.

I wasn’t planning on retiring for at least another five years, but I wanted to watch how effectively my team could execute some of my more important functions.  While five years might seem like too long a runway, it rushes by very quickly. I wanted to plan well in advance for my eventual departure.

I had taken one step toward this two years ago, when I named one partner president and another chief operating officer. But promoting someone is easy; giving up some of your job is much harder. I had to decide which functions to actually move off my plate.

Most firms have a suite of core products that make up much of their sales and profits. In our case, equity portfolios are a cornerstone of our success, and, given my prior background, I have always been heavily involved in the research, stock selection, and trading.

But in recent years, as I’ve become more involved in business development, client relationships, and managing the complexities of operating our company, I have had less time for researching new investment ideas. We’ve hired more qualified people to fill this gap, and this felt like a natural place to begin delegating more responsibility.

I assigned one of my younger partners to be the director of research. While I am still one of the three decision-makers on all portfolio changes, I’m less involved earlier on in the process. Our president also now handles the negotiations with our IT providers, and our COO fully manages the compliance process and the preparation for marketing presentations.

Of course, I worried about letting go of these tasks — the investment world’s equivalent of the basic research that’s done in a lab. Would I begin to feel obsolete?

Many CEOs worry about feeling irrelevant once they retire. And it certainly took some time to feel pleased, not envious, when I’d hear my colleagues debate the merits of a new company. But I’d refrain from jumping in because no one needs a “helicopter-CEO” second guessing every management action. If I intentionally charged them with these responsibilities, I knew that meddling and crowding them would only cause friction, resentment, and dysfunction.

So once I gave up some of my job, the challenge became figuring out what to add in its place that would be both valuable to the company and offer me an engaging and inspiring personal experience. What would connect my strengths and interests to the long term goals of the organization?

I found a couple of activities that I was happy to devote more time to. Years ago, with encouragement from a friend in the media,  I began to write articles for this publication and others, eventually writing a book on sensible risk taking in business, investing, and life. The book led to speaking engagements, more writing assignments, appearances on television, and a couple of years ago, a contract with a major financial network, on which I appear a few times a month.

Since re-evaluated my core job responsibilities, I’ve started to increase my media presence and involvement, which is complementary to our investment management business and helps build our brand nationally. In addition to the media, I have taken on a project to generate awareness of our firm as majority-owned by women partners.

I’ve also been inspired by what my colleagues in similar positions are doing. Friends who are top executives close to retirement have implemented strong mentorship programs within their firm, created research and educational opportunities for their colleagues, and focused on new product development which no one had time to spearhead previously.

What should other CEOs of small-to-medium companies consider, as they move toward the next stage of their careers?

1. Think about shifting some responsibilities to the next generation of leaders. You want to begin planning and implementing a program to divest some of your functions at least two years in advance. At first, these efforts should account for no more than 10% of your time, and then you can focus more on this as retirement approaches.

2. Work very closely with your designated “responsibility successors” before you hand over the full assignment. Then, once you reassign these functions, trust your judgement and let your team take charge without your interference. For at least six months, refrain from hovering over people and explaining how you would have done that job.  Most of the time, the colleagues whom you selected personally will have the right instincts, and if not, half a year is not infinity.

3. Think creatively about whatever you have dreamed of doing for your company but have never had the time. You may have already dabbled in some arena, but now you can concentrate more attention on its fulfillment.

I have even found it helpful to review which projects to pursue with my second in command and with a broader group of managers.  I figured that if anyone objected, I’d hear about it early and have time to address their concerns. There could be a risk that my new endeavors, with the intention of expanding markets, strengthening a brand, or creating a new product line, would be negatively perceived by the emerging C-suite or look like a vanity project. By reporting on progress regularly, and involving the future leaders at my company, I seek to maintain their support and understanding.

Transition processes can be minefields for collision, dysfunction, and hurt feelings unless they are managed carefully.  They can also be a win-win.

I began to plan for my eventual retirement at least five years early.  I reassigned some of my operating functions to my younger partners, who need to master them before I leave. And with more time, I happily filled it with more media involvement and business development, which benefit the company and expand my role in a new direction.  So far, so good.

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