Strategies for CEO Succession
Top tips for crafting a CEO succession strategy
In June, Tim Dupre was named CEO of Naples-based Conditioned Air, taking over that title from longtime company operator Theo Etzel. But the transition was actually more than three years in the making, the result of a well-thought plan to ensure a smooth changeover.
During his two decades with the company, Dupre had been tapped as an up-and-coming leader. He started as an apprentice and moved up the ladder over time, holding the role of company president when Etzel began his succession planning process.
“Over those three years, Tim took on more and more CEO responsibilities, so that he had already practiced before the title was given to him,” says Etzel, who’s taking on the role of chairman to focus on expansion opportunities for the company. “He really earned the title, as opposed to throwing the title on him and saying, ‘Good luck, here you go.’”
Drawing from their experience, Etzel and Dupre share their top tips and advice for crafting a CEO succession strategy.
Don’t wait until the last minute.
A CEO succession can’t be a spur-of-the- moment decision.
“This is not something where you just wake up one morning and say, ‘Today’s the day,’” says Etzel. “There’s a preparation time for the whole thing.”
He recommends thinking about that preparation time in terms of years, not just days or months, to produce a better result. “It lends itself to an extremely smooth process because there are no surprises,” he says. “We hadn’t had a top leadership change in 23 years, but it was sort of a nonevent inside our company. Other people in the organization could see what was coming; it wasn’t a mystery.”
Identify leaders early.
While a long-range CEO succession plan like Conditioned Air’s is the ideal, some- times an unexpected illness or death can necessitate quicker action. Either way, if a company has already identified potential internal successors, it’s easier to make that change.
“In any organization, the leader- ship team needs to focus on people coming up under them, by mentoring them and really grooming a replacement,” says Etzel. “Everyone knows that philosophically we love to promote from within whenever possible. We want really good people and we want to help them get to where they want to go.”
Give potential successors the power to lead—and fail.
“You have to let people skin their knees and make some mistakes, so that experientially they grow and learn,” says Etzel. “The key to that is appropriate delegation.” That means giving people both more responsibilities and the power to carry out those tasks and make decisions.
Don’t hand over the reins if you’re not ready.
The outgoing CEO has to be sure he or she wants to make the transition. “If you’re in doubt, don’t do it at all,” says Etzel. “If you’re going to sort of hand over control and then pull it back, it’s best not to do it at all. Because then in reality what you’re doing is delegating responsibility to somebody but not giving them the authority to run their race. And responsibility without authority is just a death sentence. That person will leave.”
Conditioned Air is a very open organization, so its approximately 350 employees were frequently updated along the way about the changes coming down the road. “It’s important for the entire team to know what the vision for the organization is and to be able to have that open line of communication,” says Dupre.
Consider the impact outside the company as well as internally.
For Conditioned Air, this meant taking a look at its marketing and advertising, which often featured Etzel in a prominent role.
“We did make a switch to where I was less visible in those commercials,” says Etzel. “And we did that early on in the process so there wasn’t just a hard stop where all of the sudden you didn’t see me anymore.” The cost of making these advertising changes was a part of the overall succession plan and considered by Etzel to be “an investment in the future of the company.”
Keep learning from each other.
Post-transition, Dupre and Etzel expect their teamwork to continue. “As things progress, I’ll obviously lean on Theo and ask him questions when I feel I need guidance or advice on how to handle certain situations,” says Dupre.
“I often go to Tim and ask him what he thinks of a situation that maybe I’m looking at through older eyes or a different experiential set of glasses,” says Etzel. “And when he does seek advice from me, I’m happy to give an opinion. But he can take it or leave it.”