When Lloyd Blankfein was preparing to retire as chairman and CEO of Goldman Sachs in 2018, he wrote a letter to the company’s employees that captured his ambivalence about stepping down. “When times are tougher, you can’t leave. And when times are better, you don’t want to leave,” wrote Blankfein. “Today, I don’t want to retire from Goldman Sachs, but … it feels like the right time.”
For leaders who have spent decades working to reach the pinnacle of their careers, retiring can be a scary, almost existential prospect. Their self-worth is often connected to their work, and the questions they face go to the heart of their self-image: How can I remain relevant? Will people still respect me without my title?
I have spent more than 25 years grappling with these issues — and helping others reflect on them. In 2001, at age 58, I left the CEO job at Medtronic after having served 10 years. At Harvard Business School, where I teach courses to CEOS, we talk extensively about the arc of a leader’s tenure and finding the right time to exit. As a board member of numerous organizations, I have been directly involved in counseling CEOS as they devise their exit strategies.
I encourage CEOS to leave while they are on top, rather than wait too long and risk being forced out by their boards when the business is not doing well. CEOS who refuse to retire make their boards’ job much more difficult.
In my experience, when thinking about the right time for a CEO to retire, tenure in the job is the most important variable. It’s rare to find an organization that performs better after a CEO has been in the role more than 10 to 12 years. In general, nonfounder CEOS should avoid lengthy tenures. Being CEO is an extremely demanding, travel-intensive job that requires great energy, tenacity and resilience, and leaders often have a hard time sustaining those qualities for more than a decade.
There is no perfect time for a CEO to leave. To avoid staying too long, CEOS should regularly work through these questions:
— Take a personal inventory of your life, your career and your time as CEO. Do you still find fulfillment and joy in the job? Are you still learning and feeling challenged?
— Do you have personal reasons to leave earlier than planned? Do you have family or health issues that may cause you to leave sooner than expected?
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— Are you facing an unexpected career opportunity that won’t come around again?
— How is succession shaping up? If you stay longer, will your successor still be young enough to have a long run in the job?
— At the other extreme, is your planned successor not ready or running into some difficulties?
— Are there company specific milestones you want to achieve before you depart, such as the integration of a major acquisition or the completion of a long-running project?
— Is your industry changing so dramatically that your company would benefit from a fresh perspective?
— Does your company have a mandatory retirement age?
Taken together, the questions above provide an important list of issues that leaders should contemplate in deciding when it’s best to move on.
One reason CEOS hold on too long is that they can’t imagine what comes next. This is shortsighted. Today former CEOS have myriad opportunities to continue to lead and make meaningful contributions. Whether they choose to serve on corporate and nonprofit boards, teach, write books or get involved in nonprofit organizations, many former CEOS find that this period of generativity is very fulfilling.
When I discuss retirement with CEOS, I suggest this step by-step approach:
1. FINISH STRONG AND GO OUT ON TOP: You are in charge until the last day, and you should finish your tenure on a high note. By staying fully engaged, outgoing CEOS give their successors time to plan their own agendas without the pressures of daily business.
2. MEET WITH A CAREER COACH OR A THERAPIST A YEAR IN ADVANCE: When leaving Medtronic, I had fears about losing relevance and lacking meaning in my life. So I went back to a therapist I had seen years before and talked those issues through. The discussions enabled me to envision what my new life might look like and what my options might be. Recognizing that I didn’t want to take on another full-time role gave me the freedom to explore many other things that life has to offer.
3. IF YOU’RE MARRIED, TALK THROUGH THE TRANSITION WITH YOUR SPOUSE: Ask questions such as: Where will we find fulfillment? Where would we like to live and spend time? What hobbies haven’t we had time to explore? My wife, Penny, and I met with a counselor six months before I left Medtronic to discuss those issues, and we were able to address the different stages we were at in our careers.
4. SAY YOUR GOODBYES AND MAKE A CLEAN BREAK: In the months before you leave, make in-person visits to secure your relationships with key people, your employees and customers. When your time is up, don’t hang around the C-suite.
5. TAKE SIX TO 12 MONTHS TO EXPLORE YOUR OPTIONS BEFORE MAKING ANY FIRM COMMITMENTS: Extended time away gives leaders a tabula rasa so that they can think clearly about what comes next. Don’t make any firm commitments: The first opportunities that come along may not be the best options. Be careful with smaller commitments, too; they can fragment your schedule and prevent you from taking extended vacations or being available for other, higher priorities.
6. MAKE YOUR DECISIONS AND MOVE AHEAD: When you’re ready to take on new roles and activities, be flexible about your time obligations, knowing that these commitments are not forever. Then dive in 100% to learn everything you can and contribute as if you will be there the rest of your life.
No matter what you choose to do next, the most important thing you might want to focus on after stepping down as CEO is making sure that the path you are on is one of relevance and meaning. Find new ways to create or nurture things that will outlast you. At a moment when authentic leaders are needed throughout society, it’s an enormous loss if former CEOS simply retire to warmer regions and make no attempt to help solve the world’s myriad problems.
