“Every new beginning comes from some other beginning’s end.”
Closing Time – Semisonic
Two years ago, a firm founder reached out for help. While he had already stepped out of a leadership role, he wanted to start a phased transition of his practice and move toward a full exit from the firm. In our discussion, he shared that everything was in place on the financial and governance side, but he was still feeling uneasy.
The source of that unease? He knew this would be a transition unlike any other he had made in his career. For it to be successful, he would truly need to let go and embrace a whole new chapter, and he wasn’t sure how to do that.
Think about it.
Most organizations prepare people like him to step into leadership, but few prepare them to step out of it. Traditional succession planning focuses on developing successors by identifying high-potential talent, building readiness, and ensuring business continuity.
Yet, even the best-prepared successors can struggle if their leader has not been equally prepared to transition out of their role.
This succession gap is often overlooked and fraught with peril. Why? Because if leaders don’t step out or let go well, the risks of resistance, resentment, and challenges of emotional or relational dynamics increase. It can also mean slower or stalled decisions, unclear accountability, and a successor who is hindered in their ability to fully step into a role as intended. Whether the result of a retirement, a role change, or a condition of a merger or business sale, it’s important to equip your leaders for what comes next.
Mitigating the transition risks requires addressing three critical shifts: identity, influence, and investment. These shifts are not operational but rather personal and behavioral, and they require leaders to rethink how they create value in the transition for others AND for themselves.
Identity: Who am I without this role?
A leader’s identity often becomes the role they hold. It’s how they are known by their company, network, or communities, and it’s what they embody in their actions, behaviors, and self-image. When a leader takes on a new role, whether it’s a new role within or outside of the company, a retirement, or the result of a change in the business, this identity shift means re-examining who they are in a completely new context. It means redefining purpose, status, and potentially self-worth. Without addressing identity, leaders may resist transition or stay too long.
Influence: How do I let go of control and transfer trust?
This is one of the greatest areas of succession risk. Trust is not institutionalized, and long-standing relationships, authority, and informal power don’t automatically transfer when a title changes. For example, in the case of a merger or acquisition that forces a role change, trust needs to be built among new or merged teams. If the exiting leader is not committed to the actions and behaviors required to let go, the waters can be muddied, true succession can be stalled, and the intended outcomes are often underachieved.
Investment: Where does my energy and commitment go next?
Without a vision for what or how to invest their time after this, leaders tend to hold on, either subtly or overtly. In the case of a CEO or partner retirement, it can be difficult for them to fully leave behind what they built. In contrast, those that have something to move toward, even if not fully defined, have an easier time taking the steps needed for a smooth transition.
So what can you do to better prepare a leader to step out of a role and let go well? Consider taking one or more of the following actions in each area.
Identity Actions:
- Provide coaching and resources to help them understand the emotional side of stepping away from the role, the business, and what they’ve been doing.
- Help them start to explore what’s beyond this role (e.g., visioning, identifying what energizes them, and what they want to consider).
- Support and facilitate reflection on their purpose beyond this role.
Influence Actions:
- Be proactive and set a timeline that allows sufficient space for growth in rapport, trust, and confidence for the successor. For retiring partners in professional services, we recommend starting two to three years before the retirement date. For executives, founders, or owners, the ideal transition timeframe depends on their role and the readiness of their successors.
- Work collaboratively with the leader to identify essential tasks and relationships that need to be transitioned, who the successor is, and the time frame in which the transition will need to occur. Identify and agree upon the conditions they can create to set the successor up for success and outline some initial steps to build momentum.
- Help them understand the importance of reinforcing the successor’s role and authority. Encourage the existing leader to identify steps they can take to publicly position and acknowledge the successor as the lead once a relationship has been established or ownership of a task has been transitioned.
Investment Actions:
- Provide coaching and resources to help the leader clarify boundaries. A leader may exit a role but not fully exit the organization. For example, it’s not uncommon for a leader to phase into retirement or step back into a reduced role. In these situations, it is especially important to clarify boundaries to help everyone know what the leader will and won’t be involved in.
- Help them define their next focus for their time investment. In addition to helping the leader navigate the transition in identity, visioning can also help a leader define their next chapter and help them see what might provide meaning and purpose. Visioning can help create a compelling path forward and have a much greater impact than a traditional “exit plan.”
In the case of the founder mentioned earlier, through coaching, discussion, and self-reflection, he now has a plan that he is actively executing. He created a vision, has taken steps to transition relationships and let go of significant responsibilities, supported successors and clarified boundaries, is creating more meaning outside of work, and is enjoying his reduced role. Most importantly, the feelings of unease have dissipated and have been replaced with increasing excitement for the future – for both the firm and himself.
Exiting leadership well is a core leadership capability that differentiates successful organizations. When done intentionally, succession planning promotes a smooth and respectful exit that maintains positive relationships, protects value by helping leaders let go gracefully, models healthy leadership evolution, and signals long-term stability. In short, it sets the organization and everyone involved up for future success, and that is the ultimate outcome for any succession plan.
Breaking Through Questions
- Where have we already demonstrated the ability to navigate change and transition well, and what does that teach us about preparing leaders to step out successfully?
- How might our succession planning process or actions change if we focused on preparing the successor and the exiting leader both more intentionally?
- What conditions could we create that would make it easier for trust, decision-making, and authority to transfer cleanly to a successor?
- How might we support leaders in creating a compelling next chapter, one that gives them something meaningful to move toward, not just something to leave behind?
Articles Around the Web
How to manage a successful CEO transition | McKinsey
Great CEOs know that the transition to their successor will define their legacy and cement the strength of what they’ve built. Here’s how they do it right.
How to Prepare for Career Endings | Psychology Today
How you prepare to leave your role as a working professional is as important as how you start. Endings can bring feelings of anxiety and disconnection and require a shift in mindset and skillset.
The Vital Role of the Outgoing CEO
Everybody focuses on what the new boss needs to do. But what the departing one does can make all the difference.
