A very sensitive issue has been exercising the minds of some of my Vistage chair colleagues of late and it can be summarised as follows:
The owner/founder/Chief Executive of an SME decides that the time has come to move upwards to the position of Chairman.
To enable this a CEO/Managing Director has been appointed to run the business on a day-to-day basis ostensibly with full autonomy.
The Chairman, however, cannot leave well alone and continues to take an active although unspecified interest in the daily workings of the business that the new CEO/MD views as interference.
Question: what can be done to resolve the situation?
I can fully understand the Chairman wanting to keep his/her eyes on what is happening in the business. After perhaps many years in an executive role it is very difficult to readjust to one that is largely advisory and sometimes not even that. The level of trust that is needed for the Chairman to accept the way that the new CEO is running the business could actually be an improvement is one that can be very difficult to achieve or even accept.
The discussions in the Vistage chair community covered a large range of solutions most of them based on some form of outside help for the Chairman to understand the new role and to at least modify his/her approach as a consequence.
For example we have in Vistage several excellent speakers on the whole subject of Directorial roles. In addition the Institute of Directors publishes a very good interactive Competency Framework for all functional directors.
All of this is admirable and can often contribute positively to the discussion. However, we must realise that this dilemma is based on emotion rather than rationality and consequently can be an extremely painful exercise for the Chairman.
The feeling is that he/she is being sidelined even though it was their idea in the first instance, doesn’t know what is going on in their own business and generally feels as though they are not needed anymore. That can be a deeply emotional issue.
As a consequence they try not to interfere while checking that things are going as well as can be expected. The effect is that everyone in the business sees the Chainman as usual, accepts that there is another member of management there as well and isn’t always certain as to where the power now lies.
There is possibly every reason to suggest that the role of the Chairman needs to be learned because it is very different and demands a great deal of trust in the new regime and its methods.
The question is: does the Chairman understand the new role and importantly, is he/she willing to learn new tricks? Even more importantly, who is going to suggest that to the Chairman?
There is an old story about the mice in a barn who were being decimated by a cat that regularly dined on a member of the group and they convened a meeting to discuss the problem. One clever mouse suggested that the cat moved very silently so if it had a bell on its collar the mice would hear it coming and could get out of harms way.
This idea received great enthusiasm and acclamation until one of the mice said:
“Yes, but who will put the bell on the cat?”
I wouldn’t presume to offer a magic bullet solution to this difficult emotional issue because there isn’t one. As I said previously every situation is different.
Appointment of a successor even in a family business can be fraught with difficulties especially when the Chairman knows that it is the right move but is reluctant to let someone else look after his/her baby.
Whatever the situation it needs to be treated with great discretion, compassion and sensitivity on the part of the newly appointed leader. It will take time and that can be an irritation but with care and understanding the situation can be resolved.