Executive Transitions 2024 - Discussion Partners White Paper

By Tom Casey Casey and Claire L. Hebert-Dow ire Hebert-Dow with Lizy Freudmann

2023 was a pivotal year for executive transitions.? The post-pandemic mentality of “life is too short” led to numerous unanticipated senior level transitions from 2021 through 2023.

Terms such as “The Great Resignation” and “The Great Upgrade” inclusive of senior level incumbents were contributing factors to labor market turbulence.? The lack of a major disruption in the capital markets allowed for sufficient economic foundation allowing for a “go vs. stay” initiative.?

Concomitant to the self-directed decisions of executives to transition, the labor market continues to navigate suboptimal immigration policies, global recession fears, supply chain concerns and geo-political tensions.?

As we enter 2024, DPC research reinforced by The Economist, The Atlantic, AARP and McKinsey Insights suggests the acceleration of executive transitions shows no signs of deceleration.

A commercial example of how organizations are responding is The Walt Disney Company, whom have created a Board level advisory committee to focus on Succession and High Potential Development.? Their stated purpose is to be better positioned for the confluence of growth, capability gaps, while supporting their envisioned future (Hollywood Reporter December 23rd 2023)

On the media side, the HBO series Succession dramatized the dynamics of this human capital process.? The book Unscripted on the Redstone family turmoil associated with a multisector succession further suggests many plans are more fiction than fact.?

The net result is further turmoil in the executive cohort IF departures are unplanned or there is an absence of continuity scenarios. Chaos is a likely outcome.

Our 2024 working hypothesis is: “Plan For The Worst-Hope For The Best But Curb Your Optimism.” The refrain: “I can’t find enough qualified people to grow my company” will not diminish this year and will continue to be complicated by executive transitions.

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Discussion Partners Research - Labor Market & Executive Aspirations

The above is supported by Discussion Partners research and client involvement.? Beginning in April 2020, we identified a likely post-pandemic trend whereby many executives would begin self-selecting accelerated transitions from their leadership roles.

This phenomenon continued through 2023, and our prediction will remain in force this year.

DPC identified an urgent initiative: the reconstitution of High Potential Development programs. Discussion Partners recommendations were highlighted in our June 2020 book, Leadership Development-The Next Curve to Flatten!

The Covid-19 pandemic was a game changer, which continues into 2024 for executives who approach their careers with an attitude of: “Life is too short or I have other interests I want to pursue.” We are also finding that executives, if not leaving immediately, are adopting what DPC refers to as “the Divisibility Factor” – i.e., dividing by two their original departure date.

Discussion Partners identified an approach that we actively encourage be considered for 2024 as enterprises navigate executive transitions.

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1. Frame the challenge in terms of strategic, leadership and demographically realistic terms.
2. Embrace the reality that hybrid is here to stay and create a dashboard that monitors vs. tries to disprove the concept.
3. Do neither by design nor inference manifest a lack of career commitment to those who prefer a hybrid model.
4. Do a reset of leadership development programs emphasizing empathy, transparency, collaboration and predictability skills development.
5. Create soft-landing company affiliation programs for executives who choose to transition through advisory, mentoring, emeritus approaches.
6. Clear delineation of who is and isn’t a High Potential while ensuring the commitment for development of franchise players.
7. Isolate while tolerating leaders who “don’t get it,” transitioning them to “first do no harm” circumstances.
8. Reexamine Total Rewards strategy for diversity, equity and inclusion.
9. Adopt the Roosevelt adage for recruitment: “Try everything. If it works, keep doing it. If not, try something else.”
10. Assume your company is a learning laboratory — develop?aggressively.

The demographic realities with broader context of aspirational and attitudinal influencers suggest it is contraindicated not to think situational vs. traditional, as the problem is not a short-lived dilemma, but rather a systemic challenge that will be with us for a while.

Executive Transitions - The 2024 Prediction

As referenced in Discussion Partners two books on transitions, in the not-so-distant past, there was something magical about age 65 as it was when most left the workforce.? At the time, however, after they received their gold watch and embarked on a cruise, there was not much life left based upon actuarial tables and cultural norms.

The last 20 years have seen a dynamic change in date certain for transitions in the context of the mantra, “It is time to retire retirement,” captured in the book Workforce Crisis by Ken Dychtwald, Tammy Erickson and Bob Morison reinforced by thought leaders Drs. Lynda Gratton and Andrew Scott in their books, The 100 Year Life and The Next Long Life, focusing on favorable demographics. Also in the recent past, Tom Wilson’s Next Stage and Ken Dychtwald and Bob Morison’s What Retirees Want concentrating on transition planning were published all with the similar thematic: The demographics being addressed by arcane attitudes and policies are the most problematic of enterprise challenges.

Chip Conley, the best-selling author and co-founder of The Modern Elder Academy in his just published book Learning To Love Midlife reinforces age-driven aspirations, inclusive of executives, to be proactive in pursuit of life experience.? This book adds to the phenomenon DPC noted in 2020 whereby executives are accelerating their retirement plans in pursuit of non-job-related fulfillment experiences.?

Discussion Partner Collaborative Executive Transition Experience

Discussion Partners launched a Transition Advisory Service offering in 2013 after the publication of our book, Executive Transitions-Plotting the Opportunity!

Since that time we have worked with over 900 executives in a variety of sectors and published now two best-selling books on the topic, most recently Executive Transitions 2-Leveraging Experience for Future Success!

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In respect to our experience, we have organized our Transition Advisory support into four phases.

Phase 1-Ensuring Enterprise Continuity

Making sure that care and thought are given to the preservation of momentum as manifested in the Succession Plan through constructive access, advice and prescriptive documentation.

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Interim Period Issues – Post-Successor Selection

Be mindful there is oftentimes a “rock in the middle of the river” attitude to be avoided in a post-announcement environment.? Be advised we usually find "the obstruction" well intentioned and focused on the executives’ “best interests” so as “not to bother them.” Still, it is difficult to be working in an environment that seems to have forgotten one has a pulse.?

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While there WILL be a feeling of emotional disorientation associated with departure, it is most advisable to recognize that transition is a platform to other areas of personal and creative expression and by no means the suspension of commercial and personal interests.

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The Playbook

The suggestion of this exercise may seem odd. However, our experience is that it is particularly useful when a successor may not be up to the task immediately.? It is also nontrivial in reaffirmation of legacy.

The value of having a brief treatise on your experience with a limited distribution is twofold:

1. Helps others see “your role through your eyes” and
2. Reduces “blowback” in that after you leave, it's less likely you'd be ??blamed for others' mistakes.

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Our concept is a 2- to 3-page memorandum, which focuses on the following:

• The initiatives that you feel were well executed;
• Those that are in process and/or you feel were deficient;
• Two to three top-of-mind suggestions for securing progress in your previous role.

Phase 2-Legacy Driven Next Stage Launch

Succinctly put, it’s taking proactive steps to ensure that the efforts you undertook and the success you engendered are recalled in the most positive terms as you embark on your “next stage.”

In Discussion Partners' experience regardless of age and psychographic profile, it is prudent to substitute the question of: “How will I focus my energies for the next three to five years?” to: “What will I do with the rest of my life?”? This is the principle of Inflection Point, which we utilize in our discussions with executives who have an extensive work history often with one to two employers.

Transition Principles

The below represents a baseline from which we develop tactics for executives who are departing from a “continuing concern.”

? Control the Communication Process - Avoid relying only on the formal elements of communication. There is a need to augment this effort with an informal communication process to personalize and engage in conversations with selected managers.

? Confirm the Legacy - There is a need to define “how I want to be remembered” from “how I am perceived.”? The most effective way to do this is to have a dialogue with trusted advisors where you pointblank ask the question: “What will you remember about me?”

? Networking - Classify your internal and external networks capturing the contact information for managers who would provide insight/access for you in the future -- what we refer to as the “Nifty 50.” This is the minimum! There is a need to commit to interacting with these folks at least on a quarterly basis, recognizing that the interactions will be sustainable provided the dialogue has mutual value.

? Relationship Sustainability - The first order of business is to prepare and send, following the formal announcement, an e-mail to at least these 50 executives internal and external embedded with: a) preliminary thoughts as to career focus and b) contact information.

? Accessibility - Independent of the networking activity above, there is a need to utilize multiple vehicles (e-mails, social media, and the lost art of letter writing) to maintain contact with a broader number of executives.

Phase 3 - Rejuvenation Break - Taking a break to recharge and reflect on next steps in your career trajectory.? ?

The Concept of the Commercial Sabbatical

The foundation for the “Commercial Sabbatical” concept we promote derives from our research and client experience. Based upon executive demographics and aspirations, it is embedded within our hypothesis that successful executives after a period of disconnection are desirous to reengage in commercial activities.

1. Older Executives (65 plus) focus on two or three activities part time post-transition.
2. Bridge Executives (55 to 65) focus on two or three activities part time post-transition for a period of approximately two years then return to “work” in an advisory and/or employee capacity at a level of approximately 50% of the time until age 65 or older.
3. Off-Ramp/On-Ramp Executives (55 and below) if not focused on replication of a full-time setting immediately focus on two to three activities for a period of approximately one year and then return to work as advisors and/or employees until age 65 at a level in excess of 50%.

Phase 4 - Cyclical Planning ??

Conceptualization, deliberation, and implementation of the plan developed prior to departure and refined subsequently.

A critical finding from DPC experience to date is executives have an attitude that control of calendar is the primary filter for determinant of where and how they will be spending their time.

Transitioning Executive Research

The below represents our current thinking on the question: “Where are executives likely to spend their time post-employment?"? Our assumptions are derived from our initial research project of over 2,000 executives, ongoing pulse surveys since 2013 and our transition advisory work with over 800 executive clients.

Be advised our overarching finding is that while it is likely executives will engage in two or three endeavors part time as aforementioned, there is a manifested desire to “control the calendar.”

Discussion Partner Transition Focus

• New Role/Alternative Employer
• Consulting Advisory
• Academic Pursuit as Adjunct Professor
• Author/Blogger
• Personal Investor
• Commercial Board Membership
• Political Involvement
• Philanthropy
• Social Responsibility (including NGO Boards)
• Higher Education-Student
• Arts
• Entrepreneur - non-commercial
• Start-Up Initiator
• Sports - Recreational
• Other - Rock Star?

Discussion Partners Transition Advisory Conclusions

Over a decade ago, Tammy Erickson, Ken Dychtwald and Bob Morison in their McKinsey award-winning HBR article, "It’s Time to Retire Retirement" and their follow-up book Workforce Crisis asserted in an elegant way that retirement is not a phase down from relevance.? Moreover, it is a platform for one to pursue alternative interests and avenues for personal satisfaction -- points of view borne out by DPC research and client experience.

Discussion Partners' research and advisory interdictions reinforce this hypothesis.? Moreover, as we enter 2024, the shift in demographics with the now largest worker cohort (Millennial and Gen Z born before 2002) along with global economic dynamics, the whole arena of executive transitions is at a crossroads.?

The three requisites Discussion Partners encourages are:

1. enterprise support to executives in conceptualizing their personal plan.
2. rigorous analysis as to the readiness of the successor.
3. a shift in attitude on the part of the executive to embark on the beginning of new adventures, not an end of relevance and contribution.

The labor shortage complicated by the “great resignations” should prompt a sense of urgency and experimentation in all Talent Readiness areas, particularly Executive Transitions as we enter 2024.