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The Hero's Farewell: What Happens When CEOs Retire

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In my Management Buckets workshops, I talk about the four levels of mastering the 20 critical competencies (buckets):
--Level 1: I don't know what I don't know.
--Level 2: I know what I don't know.
--Level 3: I have an action plan to address what I know I don't know.
--Level 4: I can coach and mentor others. I can teach the course!

So feeling pretty smug that I've been around the block once or twice, I was startled to realize that I was back at Level 1 regarding what happens when CEOs retire. Wow. I learned a lot from this book--and, like all great books, I found immediate value in attaching a memorable label to four kinds of CEO retirement. Recommended to me by Paul McKaughan (a "retired/ambassador" CEO), I've already recommended this book to more than 20 other CEOs.

First published in 1988 by Harvard prof Jeffrey Sonnenfeld, the book is part history, part expose and part therapy. "This is a book," he begins, "about how the management succession process involving chief executive officers of major corporations is affected by the heroic view that CEOs have of themselves. Some plan carefully and choose wisely who will succeed them. Others fight the process and must be forced out in what can be traumatic episodes for the CEOs and the organizations."

Painstakingly researched (five years and 50 personal interviews), the book describes four types of CEO retirement transitions:
--The Monarch's Departure. "Monarchs leave their thrones only through their death, ill health, or as with [Boston Consulting Group's Bruce] Henderson, a palace revolt."
--The General's Departure. "Although as with monarchs, the leader's heroic mission is important to generals, it is not as important as are their needs for a heroic identity. The generals' greatest barrier to exit is their identification with heroic stature. They treasure the respect and recognition they have earned, and in leaving high office, they leave behind a great deal of their self-worth."
--The Ambassador's Departure. "Ambassadors, like generals, also remain within their firms after retirement. Unlike the generals, however, the ambassadors do not seek to return to top office positions. They work to support rather than to subvert their successors. Guided by an inner sense of accomplishment and fulfillment, the ambassadors are not searching for more battles to further prove their heroic valor."
--The Governor's Departure. "In contrast to the open-ended reign of the monarch, the general's eager return to office, or the ambassador's maintaining of advisory status, the retiring governor-like business leader usually leaves office for a completely new activity. The governors have long had extensive interests outside their firms. Retirement for them is often merely a career change as they turn to pursue outside interests. After they disengage from their firms, their careers do not fade into the sunset. Any new activities tend to be leadership roles and not solely board memberships."

There's more. All interesting, even fascinating, at this insider's glimpse into decades of boardroom transitions--not all pretty! Along the journey, Sonnenfeld's color commentary informs and teaches. What does it take for CEOs to give up the "psychological perks" of the office? He quotes another Harvard prof's advice to an incoming CEO: "The first step in a mess like this is to reduce chaos to disorder." A brilliant one-liner.

While the ambassador style seems the most God-honoring, the author points out that some of his ambassador subjects weren't exactly humble. Another insight: Withthrop Knowlton, Harper & Row, "cautioned that the chief executive's natural tendency to close his or her administration in a `blaze of glory often leads them to become increasingly drawn inward...to work harder on corporate problems in the last year or two.' He suggested that chief executives should instead be encouraged to join other boards for exposure to other exit patterns and to broaden their interests and identities."

Here's my surprising recommendation: read this in your 40s and 50s--don't wait until you're in your 60s. There is great insight on both the way up and the way out of the organization.

While a bit dated, this book is one of the most important assessments of the ways strong leaders retire. The four-fold typology of retirees as monarchs, generals, ambassadors and governors is well anchored to credible research providing a helpful way for senior leaders to categorize their leadership style and anticipate the nature of their final departure. The identification of the three sets of tensions faced in the departure of the corporate hero (1) within the leader, (2) across generations of leaders and (3) between leaders and the wider community provide significant insight into the psychological and socio-cultural realities of retirement.