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» Cowen Partners looked at age data for CEOs and CFOs at S&P 500 companies and found that 16% are older than 65 and 42% are 60 or older. The average age was 59.
A separate study by Fortune found that 41.5% of CEOs in the Russell 3000 are at least 60.
Baby boomers in C-suites across the corporate world are getting more and more gray-haired, if they have hair. This presents a looming challenge when it comes to transitioning leadership to the next generation. As Shawn Cole, president of executive search firm Cowen Partners, told Fortune: “We are literally facing the collapse of the C-suite as we know it.” Even if it’s not that bad, leaders risk their organization’s future if they ignore the issue today.
“The danger is structural,” Sheryl Estrada wrote in a CFO newsletter for Fortune. “Losing both leaders within the same window means an incoming CEO may be operating without a CFO who knows the organization, board, or operating rhythm, creating continuity risks.”
QUOTABLE
» Winning Words
A leader’s lasting value is measured by succession.
– JOHN MAXWELL
The 21 Irrefutable Laws of Leadership
Leadership is not something that is done to people, like fixing your teeth. Leadership is unlocking people’s potential to become better.
– BILL BRADLEY
The New York Times, February 4, 1996
The worst mistake a leader can make is to mentor no one, choose no successor and leave no legacy.
– MILES MUNROE
Passing It On: Growing Your Future Leaders
DOABLE
» 3 Key Plays
1. Don’t wing it
This seems pretty obvious, but it’s amazing how many organizations spend very little time thinking about executive succession until it’s time to replace one or more of their executives.
Boards should demand and in some cases assist with a detailed plan for replacing the organization’s leaders, especially those at the very top. The plan should identify internal and external candidates, create a path for the internal candidates that prepares them for their next role, and account for the possibility of multiple changes at the same time and how that will affect team dynamics.
A solid plan helps guide the transition, and not just when you can predict the timing like with a leader’s retirement. It also provides an important road map for the unexpected, like when a leader has to step down because of an illness or if the leader dies on the job.
2. Keep the communication lines open
Leaders need to talk to the direct reports they see as potential successors so that they are on the same page about the future. In most cases, it’s not wise to promise someone the job because too many factors can change. But it is good to know if the person is even interested in the role, to let them know you believe in them and want to help them prepare for the possibility of moving up, and to discuss what the plan looks like.
3. Prepare for the chaos
No plan is fully ready until all the facts are in. And when it comes to leadership succession, all the facts are seldom available. Your perfect plan might get punched in the mouth, for instance, when someone you saw as the ideal successor leaves the company for another job or has a moral failing that gets them fired.
Also, there often are multiple internal candidates for top positions, especially in larger organizations. So it’s not unusual for those who don’t get a promotion to leave the company when they feel like they’ve been passed over. If you build a deep bench, some of those star players will want more playing time and they’ll naturally go elsewhere to get it.
The fact that so many C-Suite executives are nearing retirement age at the same time definitely complicates succession challenges for organizations. And the only way to keep the C-Suite from collapsing, as Shawn Cole predicted, is to get ahead of the problem today.
