Many of us have seen this from afar, some of us from close at hand. The CEO or a key executive is getting close to retirement and has set a course for the organization to drift off into the sunset. The most important job of a key executive or a CEO is to inspire continuous improvement and execution. When these two job descriptions are lacking, this lack of drive and excitement cascades throughout the organization. I’ve observed this situation often, and typically it happens when a strategic leader is approaching retirement and, for self-preservation, avoids anything risky or requires a significant effort by the organization. It seems the thinking of the critical executive is, “I don’t want to do anything that might endanger my retirement goals. This approach to leading an organization is unacceptable in today’s disruptive business climate.

What are the consequences?

The company’s CEO is responsible for modeling acceptable behaviors and work ethics. Once the leader becomes risk or effort adverse, the entire organization follows.

• The entire organization begins to “flatline.”
• Strategic progress is slowed or stopped, or in many situations, progress reverses.
• The best, most highly motivated employees seek a new work environment; there is a brain drain.
• Attitudes shift from excitement to cruise control, just doing what needs to be done but not seeking improvements, efficiencies, or better methods.
• Productivity and performance deteriorate.
• Job satisfaction disappears.
• The ability of the organization to compete effectively erodes.
• The organizational culture becomes one of showing up versus serving and adding value to the stakeholders.

How is this situation prevented?

It starts with the Board. As the one employee the Board oversees, this situation must be recognized quickly. If the Board feels like the CEO is starting to coast, they have a couple of steps they need to take:

1. Establish performance measures with the CEO to ensure the effort equals compensation.
2. Promote someone as an organizational driver to the role of President; the CEO is now only a CEO; the President “runs the company.”
3. Restructure the organization’s strategic planning process that creates a vision for the future and defines specific objectives designed to inspire the organization to move forward; Blue Ocean thinking is essential in this process.
4. Extend the current CEO a severance package that allows them to move on with their retirement.

If the Board is not aware of this situation, someone must help the current CEO, recognize the damage his/her thinking is causing; how they are potentially damaging their legacy.

The CEO or this confidant should ask these questions:

• Are your planning and goal-setting for the organization driven by your planned retirement date, or do they extend beyond this retirement date?
• Do you find yourself increasingly more change-resistant?
• Do you avoid making plans that will demand more effort and commitment from you or your staff?
• Do you invest more time in thinking about your retirement future than your credit union’s future?
• Do you dismiss or resist dreaming big for the future of your credit union?
• Are you afraid or hesitant to take on a BHAG (Big Hairy Audacious Goal?)
• Do you notice a lack of excitement during staff or all-staff meetings?
• Do you see fewer ideas being percolated up for decisions?

A necessary skill for a leader, especially the key executives, is to recognize when to step away from the helm so that others can take the organization to the next level. It is every leader’s job to not just leave the organization at a better place than when they stepped in but to set the table for the next leader in moving it beyond your wildest dreams.

Where are you in the leadership continuum – leading, driving, and inspiring, or just drifting?