There are three phases to communicating a CEO transition. I described the first, which runs from the day the decision is made until it’s announced, in my last post. I’ll cover the third phase, which begins at succession day, in my next post.
The second phase begins with the announcement of the succession plan and ends on the day the event actually takes place. It’s usually a period of three or four months – long enough that there’s no concern that something happened to or with the outgoing CEO, but not so long that the distraction lingers. The objective of communication during this period is to establish readiness for the actual transition by creating as much clarity as possible, because it’s a time of uncertainty, anticipation and suspension. While the CEO’s authority legally changes hands at a specific moment, on a practical level it’s a more gradual and confusing process.
Some managers may hurry issues to get the outgoing CEO’s approval or help; others may hold back to wait for the new CEO; still others may become frozen because they’re unsure of potential changes in direction. The level of conjecture on outcomes and impacts will be high. It can be an awkward, distraction-filled period and should be used to create the clarity that will allow the least disruption upon the actual transition.
This is also the period when the incoming CEO begins to own the company’s future direction, especially if he or she already works there. Important stakeholders will be watching for signals that the new CEO will preserve those things they believe make the company great and change others that keep the organization from thriving. Curiosity will be high on both fronts and the successor should begin to address both.
It’s also an important time to think about upcoming decisions and whether any should deliberately be announced before or after the transition so that they appear to be owned by either the outgoing or incoming CEO.
Activities to take place between the announcement and the hand-off of the CEO reins include:
- Ramp up internal communication, particularly from the successor; this is when he or she at least starts to talk about the future. Provide as much clarity as possible on what’s going to happen when, including processes that will lead to decisions (e.g., strategic planning). The future CEO should start to establish a personal style and method of communicating with the organization.
- Anticipate the questions and concerns that the transition will raise and provide as much detail as possible and appropriate to address them.
- The incoming CEO should revisit critical stakeholders to begin establishing or reframing those relationships.
- This is a great time to do perception research, particularly among employees and investors. The knowledge gained is typically very useful for an incoming CEO and the constituencies surveyed will appreciate having their opinions valued.