Exit strategies affect politicians just as much – if not more – than it does businesses and senior employees. This week’s FTdynamo article compares how well thought out exit strategies of past people at the top have worked out.
As UK Prime Minister Tony Blair contemplates his second term in office he may also be thinking about his exit strategy. When would be the best time for him to depart to spend more time with his family? History suggests that Blair should seriously think about his exit strategy because it is likely to be the most difficult decision of his life. The US constitution sensibly limits presidents to two terms, thus removing them from temptation of continuing in office after their usefulness and popularity have waned.
Leaders have a very poor track record of leaving office with good grace and their reputations intact. In the political world, premier Blair need look no further than a predecessor, Baroness Thatcher, for an object lesson in how not to do it. The manner of her departure is still a cause of bitterness for both her and her supporters. The woman venerated as an outstanding leader of her (the Tory) party and country was unceremoniously dumped. But think of how different her reputation – and peace of mind – would be if she had left office at the time when public opinion and the support of her colleagues were still healthy.
In the world of sport, great performers are similarly bedeviled by a natural inclination to hang around. Muhammad Ali is the most notable example of the temptation to believe that the ravages of time can be set aside. There are countless other examples – Bjorn Borg making a comeback with a wooden racket; Sugar Ray Leonard returning to the ring; even Michael Jordan might struggle if he came back to play again.
In the business world, leaders similarly tend to hang around. They cling on to power as surely as the most Machiavellian of politicians or arrogant of sports stars. It is difficult to let go – especially if you are a huge success. “If power, as Henry Kissinger said, is an aphrodisiac, then surely sustained success at CEO level must be habit forming if not actually addictive,” suggests Phil Hodgson co-author of Relax, It’s Only Uncertainty.
They hang around despite knowing that the fashionable theory suggests that leadership is now about teamworking, about creating teams that survive after the leader has departed. “Rushmorean figures that they are, I wouldn’t say that the Welches, Gateses, and Bransons etc are the model for 21st century leadership, but what they seem capable of doing is to build very strong organizations with a cohesive team at the top,” observes veteran leadership theorist Warren Bennis. In the end, the quality of the leadership team is likely to prove more lasting than any one ego.
Yet egos predominate. Look at Jack Welch, head of General Electric. Welch is justifiably celebrated as the greatest CEO of our times. Unquestionably, he has delivered phenomenal results for many years – but he is still there. Despite planning his departure over a number of years and labouring long and hard over his choice of successor, Welch could not resist staying on to smooth over GE’s takeover of Honeywell. Just another year, he promised. “GE stock going up is all me and my kids have got, so if you think I’m running out you’re wacky,” he told a press conference in a rather tepid justification of his decision to stay on. But, as Welch’s golf clubs gather dust, how does his successor really feel?
Whether, when it really comes down to it, Welch is mentally prepared to relinquish the most powerful job in corporate America remains to be seen. He insists that when the time comes he is prepared to walk away and keep walking. He does not need the Honeywell deal to cement his legacy. He could be comfortably retired – but chose not to be.
Perhaps there is a solution to all this. Look at the huge success of the seniors golf circuit. This gives golfing legends such as Lee Trevino and Gary Player a licence to print money and to trade on their reputations. It is built on an acceptance that they were great and are now not so great but still worth seeing in the flesh. It is the best of every world.
A similar approach could be taken in business. Think of a management dream team: Michael Eisner, Jack Welch, Ted Turner, Rupert Murdoch, Percy Barnevik, and so on. Set aside the logistical and egotistical problems of getting them in one room and you have a group of people who could change the business world for the better. If only we knew how.
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