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Barry Sanders left the NFL 1,457 yards shy of the all-time rushing record. He had rushed for 1,491 yards the season before and doubtless had 4 or five seasons left. He retired anyway.
To anyone who confuses longevity with performance, the choice seemed irrational. Sanders had already collected every endorsement value collecting, and chasing the record would have cost him something he valued more: his health, his humility and the best way he can be remembered.
For executives considering when to step down, the way to approach CEO succession planning, or the way to construct an enduring leadership legacy, Sanders offers one in all the clearest case studies in modern business considering. What he did at 31 is what many CEOs refuse to do at 60.
Know when to step back
A CEO should resign when the position not requires his full performance – and that typically happens before the scoreboard reflects it. When Sanders retired, he knew he was still the very best running back in football. That was the purpose. He left at the height of his profession because an extended stay would have been best for the very best.
There are often three signals that tell an honest manager that the season is coming to an end:
- Creating the annual marketing strategy seems easy, which should never occur in a healthy operating environment.
- Leadership meetings and city hall meetings begin repeating the identical ideas because recent perspectives are not any longer available to the leader.
- Board meetings have gotten overly comfortable and predictable, which will be the clearest warning sign of all.
My last company grew from $500 million to $2.7 billion in over 4 years. Profits rose nineteen times and we sold at twelve times, ending within the 99th percentile of our PE firm’s historical returns. This was the very best season a CEO could reasonably ask for — and continuing beyond that will have been the compromise Sanders rejected.
Succession planning vs. leaving with no plan
CEO succession planning is the conscious preparation of the following leader with enough flexibility in order that the transition feels stable and non-disruptive. The difference between strategic succession and termination is structure: a timeline, a successor, and a leadership board developed before it’s urgently needed.
Sanders’ resignation seemed sudden publicly, but internally he had been preparing for it for years. I actually have approached leadership changes in the identical way. I never just gave up on a job. I at all times stuck to a schedule and ready the following leader upfront in order that the delegation could speed up towards the top somewhat than buckling under pressure. Private equity environments inherently reinforce this mindset. The clock starts on the day the CEO logs in.
Giving up is different. It is the dearth of a successor architecture. It’s the CEO who stays too long, leaves with no plan, or leaves so abruptly that the organization spends the following eighteen months attempting to absorb the shock. The distinction just isn’t emotional. It is structural and visual on the day the transition is announced.
Building a legacy that lasts
Leadership legacy is formed by protecting the reference point.
The final chapter often becomes the lasting image of a profession, which is why the ultimate operational role is so vital. Sanders’ final season — 1,491 yards and tenth straight Pro Bowl — became the image people remember. No one remembers him limping through the companionway. The trap that keeps many CEOs in office for too long rarely seems to be naked ambition. More often it reveals itself through identity.
At a ceremonial dinner, executives are sometimes asked a straightforward query: “What do you do?” For many managers, the title becomes the reply they’ve learned to present themselves. Losing the role can feel like losing yourself. Even my very own children preferred the version where their father was the CEO of an organization.
Separating identity and title makes resignation manageable and never emotionally destabilizing. Sanders’ identity was about being the very best running back alive, not only being an lively player. For me, it has at all times been about constructing fearless leaders and never holding the CEO title myself. The financial side of a resignation is math. Mathematics rarely results in internal conflict. The ego does.
What a transition from CEO to Chairman of the Board actually looks like
The transition from CEO to Chairman of the Board only works if the brand new role truly advantages from the experience of the previous executive. It fails if the essential purpose of the position is to take care of proximity to power. The difference quickly becomes clear.
One mistake I made was staying on the board after stepping down as CEO. Without aspiring to, I influenced the discussions in a way that complicated the brand new CEO’s strategy. Institutional memory doesn’t disappear the day a title changes. We corrected it and since then I actually have not remained on the board of any company I previously ran.
No recent CEO really wants the previous CEO to stay around. The executives who insist they’re completely happy with it are sometimes those who need the breakup essentially the most. I’ve also watched mentors tackle smaller CEO or board positions well into their 70s, only to see the scope of those roles shrink around them. A big operator running a reduced mandate ultimately appears to have weakened itself.
Sanders never accepted a diminished role, which is one reason the image of him at his peak remained intact. The higher alternative is usually to step away from a single operational base and work in advisory or investment roles across multiple corporations. This maintains the stature built up in the course of the last operational role somewhat than slowly reducing it.
Recognize your Barry Sanders moment
Recognizing the Sanders moment requires an honest assessment in three areas:
The capability test: Does the position still require your full performance? If the annual plan writes itself and the board stops pushing back, the reply may already be no.
The follow-up test: Is the following leader identified, developed and prepared? If the transition requires greater than six months of runway, the method probably began too late.
The identity test: Is the title your activity or your identity? When losing your title looks like losing yourself, the commitment itself becomes a risk.
The leaders who can truthfully answer these questions are inclined to leave with their legacy intact. Those who cannot often develop into warning role models are quietly cited by followers behind closed doors.
Plan the exit with the identical care because the rise, and the legacy will normally care for itself.
Barry Sanders left the NFL 1,457 yards shy of the all-time rushing record. He had rushed for 1,491 yards the season before and doubtless had 4 or five seasons left. He retired anyway.
To anyone who confuses longevity with performance, the choice seemed irrational. Sanders had already collected every endorsement value collecting, and chasing the record would have cost him something he valued more: his health, his humility and the best way he can be remembered.
For executives considering when to step down, the way to approach CEO succession planning, or the way to construct an enduring leadership legacy, Sanders offers one in all the clearest case studies in modern business considering. What he did at 31 is what many CEOs refuse to do at 60.
