President Joe Biden, whose long political career includes being one of the youngest senators ever elected and the oldest president to serve, announced Sunday he would not seek re-election. Although he is to be commended for doing the right thing, at the age of 81, he should never have sought a second term.
Four years ago, Biden had pledged to be the “bridge” to the next generation of Democratic leadership. His decision to step aside, however, came after intense pressure from supporters—making his experience a cautionary tale for all leaders. Given his age and declining health, he should have spent the last several years preparing possible successors. Also, his closest advisors should have strongly encouraged him not to run much earlier in the process.
Among CEOs and other senior executives, knowing when to retire and giving others the opportunity to lead is one of the most important, and sometimes emotionally difficult, decisions of a leader’s career.
Leadership does not revolve around the chief executive, whether in business or in government. In the corporate world it is the responsibility of the board of directors and the CEO to ensure a robust succession planning process is in place: identifying and developing a strong pipeline of C-suite candidates.
In fact, succession planning is the crux of leadership, which is best defined by the ability to positively influence the thinking, actions decisions, and behaviors of others. Values-based leadership is an even higher level, emphasizing the leader’s ability to relate to others and inspire them to pursue what matters most. Values-based leadership requires self-reflection on the part of the leader, continuously evaluating what they have done and what they could do better. To guard against hubris, values-based leaders develop a quality I call “genuine humility,” knowing who they are—and that a particular title or role neither defines their identity nor lasts a lifetime.
Values-based CEOs and other senior executives are more likely to develop and display a selflessness that leadership is “not about me.” They foster a culture that encourages development at every level—from first-time managers through senior executives—to ensure that there is ample talent and leadership potential within the organization.
It is not enough for a leadership candidate, in business or in government, to have aspirations for a higher office. Rather, it is about being given increasing responsibilities to develop skills, display confidence, and produce results. Otherwise, there could be a leadership void at the top.
A Values-Based Leadership Journey
I experienced the value of values-based leadership in my career at Baxter International, a multi-billion-dollar health care company, starting as a 26-year-old analyst in a cubicle and, several promotions later, being named chief financial officer. Upon the retirement of my boss and mentor, I became CEO and then chairman, leading the company for six years.
Leading 50,000 people around the world required me to rely on a talented leadership team who had strengths that complemented and enhanced my skillset. I always advised my team that, no matter how big a problem, challenge, or crisis we faced, we would do two things. First, to the very best of our ability, we would do the right thing.
Second, we would do the best we can.
For every CEO, the role will end whether due to retirement, a change in strategy that necessitates new leadership, or the recognition that it’s time to let others put into action their ideas. It’s a natural progression. But it can be extremely difficult emotionally and psychologically for those who get caught up in the privilege and power of the position. Even when they reach retirement age, the idea of stepping down is somehow unfathomable. They are emotionally unprepared and, as a result, there may be few, if any, viable internal candidates who could step up.
Even the biggest and most successful companies have stumbled through succession over the years. As researchers wrote in Harvard Business Review, based on their study of a wide range of large and mid-sized companies, a badly managed leadership transition can cost companies a total of nearly $1 trillion a year. Further, these researchers estimated that improvements in succession planning could improve companies’ stock market valuations, and the returns garnered by investors, by 20-25%.
When succession planning lacks rigor organizations can find themselves with aging leaders at the helm and no strong successor candidates. Suddenly, a company faces a leadership crisis and a new CEO, whether hired externally or promoted from within, is not up to the challenge. At Disney, Bob Iger has stepped back into the CEO role after a semi-retirement move to executive chairman, in what can only be described as a failed succession. In a similar move at Starbucks, founder Howard Schultz returned to the CEO suite as an interim leader, then became chairman emeritus in 2023.
In every leader’s life, there will be a point when doing the right thing means to step aside and let someone else step up. With strong successors in place, an organization can and should thrive under a new leader who will bring fresh ideas and a different perspective.
As usual, very interesting. Seems to me that the VBL principles are harder to inculcate in the political realm because to focus is on the person as the brand 24 hours per day forever. The end is the creation of a different sort of a person, motivated by different things.