Fence Sitter
By A. R. Samson
In sports, even when the athlete’s best days are behind him, the money for yet another round can be too attractive to turn down. This is even harder when there are championship belts that can still be contested. Thus the boxing legend who has lost four of the last nine fights, the most recent to a complete unknown, may still convince himself it’s not yet time to hang up the gloves. Will he go for a rematch? In this case, the decision may no longer be in his hands. The promoters and the paying public may grow tired of the spectacle, even pained to see the tenacity of an obsession that has lost its moorings.
Leaving the stage and heading for the exit (stage right) can be a daunting prospect. But can exits be planned?
Investors are always advised to have an exit plan when they set up their portfolio. When buying a stock, it should be clear what the profit target is and therefore the right time for selling. This exit plan applies as well when the price is going down, with a preset “stop loss” exit.
An exit plan is an architectural metaphor. Emergency exits are designed to allow safe passage out of a building or room in cases of emergency, like a fire.
Once a new CEO is appointed to his new job, he has to do three things. First, he has to listen to subordinates and colleagues to understand the situation and have a clear picture of where the current organization is. Second, he draws up plans to address the needs of the organization and maybe offer up a vision of where it should be going.
Lastly, he should develop an exit strategy for himself. As soon as he takes over, the CEO must prepare for a succession plan and his eventual moving out of the organization. Of course this can change when he gets too comfortable.
An exit strategy is obvious for projects like hosting the Miss Universe contest. Such projects have definite starts and finishes. A temporary organization is established with clear goals and definite exit points. This applies as well to movie productions. Although incorporated to establish shareholdings and how to distribute profits or losses, once the movie is wrapped up and shown in theaters with the video rights secure, the project is done. And the CEO or producer exits, looking for his next entrance.
Why are corporate appointments often open-ended?
With all the management talk of succession planning and preparing the organization for the next generation, exit plans are often taboo topics with CEOs. They’re only discussed for “others.” Thus, successions are implemented effectively at the lower levels. The incumbent may take a travel leave, only to come back to a redecorated office with a new photo on the table and a box of his old stuff at the anteroom where his secretary may be teary-eyed.
CEOs (like sports icons) may have unplanned exits. They are replaced if the company is acquired or shareholders revolt and elect a successor. Seldom does the CEO leave according to a timetable of his own making. The appellation of “lame duck” seems to justify not making succession plans.
The appointment to the leadership of the central bank with its fixed term allows for a much desired “continuity” of policies and an orderly transfer of power. Elected officials also have their own designated exit points, although continuity here is not expected. Exiting gracefully is a luxury only the self-assured can pull off. And timing is of the essence.
In family corporations, the patriarch may step down and leave the “day-to-day” operations in the hands of the next generation. The position and moral authority of “patriarch” and founder cannot really be handed over to anyone. This is a title that belongs to a particular individual given up only in a horizontal exit. Thus, the founder is there available to be consulted for major moves and when needed referee squabbling siblings.
An exit plan is not a will, although that is another variant. It is just a realization of one’s diminished value or skills and recognition that someone much younger may provide a more energetic alternative.
Still, an exit plan even in architecture may be improvised. It can be a door or a window through which one is pushed out… from the 11th floor.
A. R. Samson is chair and CEO of Touch DDB.
