Column: On Stepping Down Gracefully

Some CEOs of long tenure must have gotten a slightly queasy feeling as they watched the recent events in the Arab world. Even if they bear no resemblance at all to Hosni Mubarak or Muammar Qaddafi—even if they are the most competent and benevolent of leaders—they may well feel horror at how rapidly the fortunes of a comfortable autocrat can disintegrate. They may wonder at the frightening human tendency, when the writing is on the wall, to resort to the denial, delusions, anger, and antics we’ve seen from these despots. Such examples suggest that in one’s hour of humiliation, it is mighty difficult to follow the obvious advice: If the end is inevitable, the only sane strategy is to salvage your reputation. How you handle yourself during your final months and weeks in power will have a big impact on how you are remembered. How you handle yourself during your final months and weeks in power will have a big impact on how you are remembered. In fact, research by the Nobel Prize winner Daniel Kahneman suggests it will have a determinative impact. Through a series of experiments, he established that people’s memories of experiences are shaped by peak moments, whether good or bad, and by how those experiences ended. This “peak-end rule” holds a lesson for office leavers—whether they are being forced out or have chosen to move on. Since it will be too late when you’re on the way out the door to change the peaks of your tenure, your only remaining shot at affecting how you’ll be judged by history is to create a favorable impression with your exit. Will you be remembered as a selfish narcissist or a selfless steward? The people you work with—your charges, peers, bosses, clients, and customers—will recall the first of these images if you devoted your final days to bragging about your accomplishments, grabbing goodies for yourself, and settling personal scores. They will recollect the second if they saw you thanking those who helped you, encouraging customers to remain loyal, and even mending fences with old adversaries. Be aware that people will devote particular attention to how you interact with your successor. They will judge whether your congratulations are authentic. They will scrutinize your body language, noting how close you stand, how sincerely you smile, and whether you appear interested, bored, or disdainful when your successor is speaking. In the special case of a CEO who is retiring to the chairmanship, they will also note whether you show deference to and respect for the new boss or treat him or her as the same old underling—by interrupting, for example, or lecturing, or insisting on having the last word. David Kelley, a founder of IDEO, is one ex-CEO who has impressed me in this regard. Shortly after he stepped up to chairman and Tim Brown became CEO, I took part in an IDEO off-site meeting. I couldn’t help noticing the difference in David’s behavior: He spent most of three days standing at the back of the room, listening carefully but only rarely making comments. I mentioned that it was a change from my previous observations of him. He said it was Tim’s show now, and his job was to get out of the way. That’s an incident I still think and tell about, and I’ve since heard other IDEO folks mention David’s gracious behavior during the transition. I guess that makes it a great example of the peak-end rule: Many of us carry a flattering picture of David. His graceful exit only helped to color his legacy as IDEO’s founder and former CEO.

Column: On Stepping Down Gracefully

Partner Center