Carolyn Dewar is a senior partner at McKinsey and founder of the firm's CEO Excellence practice, where she spent 20 years counseling Fortune 100 CEOs. She has seen a lot and heard a lot (both good and bad) along the way. But what she hadn't seen, even though many of her clients had asked for it, was a handbook to guide her through all the difficult parts of a CEO's job. There, she wrote a book with colleagues Scott Keller, Kurt Strovink, and Vikram Malhotra. agenda
CEO for All Seasons: Mastering the Leadership Cycle (Scribner) distilled research from 83 high-performing CEOs into a step-by-step playbook. The premise is simple. The CEO job has distinct seasons of preparing for the role, taking office, maintaining momentum, and stepping down, each requiring different capabilities and support.
The reason this is important for directors is that boards have a distinct role to play from season to season if they want the company and its leaders to succeed. “The board plays a critical role in supporting the CEO every step of the way,” says Dewar. “That relationship is critical throughout every step, both to support the CEO and to fulfill our fiduciary responsibility to our shareholders.”
Here's what Dewar's research suggests boards should do:
Spring: Build your CEO bench — before you need it
Two to three years before a CEO change, good boards have already cultivated multiple credible candidates. It's important to focus on “plurality.” “Ideally, you don't need just one,” says Dewar. “Intuit's Brad Smith talked about how not every horse is right for every course. As a board member, you don't know what kind of situation the company will be in or what kind of leader it will need.”
This means requiring incumbent CEOs and CHROs to spend serious time developing candidates. But boards also need to resist the common trap of looking for a clone of the current CEO, especially when things are going well.
“The board's default mode when things are going well is that they want to keep the train moving,” Dewar observes. “They think, 'I had a great run with this person. Let's find a mini-version of them.'” Not only is that unrealistic, but your company is unlikely to need exactly the same thing in the next five to 10 years as it needed in the past 10 years. ”
Instead, boards should use CEO succession planning as an excuse to discuss honest, forward-looking strategy. What are your expected business priorities in three to five years? Is this in growth mode or cost mode? Do you need someone who is digitally proficient? Someone who can navigate geopolitical complexity? The answer should determine who you want to run your company.
Dewar's research points to four competencies that will be most important for the next generation of CEOs. First, it's continuous learning. These are leaders who see the CEO job as the beginning of growth, not the end. Second, you can make decisions even with incomplete information and find signals among the noise without paralyzing your analysis. Third, technical fluency, especially around AI and emerging technologies. The fourth is stakeholder management. It's the ability to involve people rather than ordering them from above. “These tasks are too big for one person to be an all-knowing CEO,” Dewar says. “We want someone who has a proven track record of not just themselves but leading teams to accomplish great things.”
Boards should also look outside the company, even if there are strong internal candidates. “It's easy to be critical of internal candidates because you know them so well,” Dewar points out. “You can get carried away by the new person's shiny object, but really you just don't know what you don't know. So you have to adjust to what's out there.”
Summer: Reset the board
Once hired, the board itself must be reset. This is especially true for boards that have worked with the former CEO for years and developed a comfortable rhythm without being too hands-on. “If you're in a smooth sailing situation, be careful,” Dewar said. “Obviously, if it's a crisis and an unplanned transition, you're probably already in that situation. But if it's a planned transition, the board may need to step up in terms of getting more involved early on, asking the right questions, and making sure the new CEO gets off to a good start.”
This doesn't mean micromanaging. It means helping new CEOs succeed at firsts, moments that set the tone for their entire tenure. The first board meeting is important. The same goes for your first earnings call, your first investor presentation, your first regulatory meeting, or your first customer visit. “It sets the tone for their tenure and will have a ripple effect on how your chosen candidate is perceived,” Dewar says. “What can we do to make them look really good in the first moment?”
The relationship between the CEO and the board chair or lead independent director is very important. Dewar recommends that the chair spend real time with the new CEO early on to establish a good rhythm and synchronization. “Your role as chairman is to manage the board so that the CEO can do his job,” she says. This might mean previewing topics with board members, gathering feedback to feed back to the CEO, and helping the board evolve itself.
At the same time, boards should encourage the new CEO to meet one-on-one with each board member, rather than just holding board meetings. These individual relationships are important. Dewar points to Mastercard's Ajay Banga, who used the board as a consulting service and brought in individual directors with specific expertise. Questions about M&A? Call the board member who completed the transaction. Regulatory issues? Call the person who navigated Washington. “Building those relationships and helping them understand what skills they have on that board and can leverage them is really important,” Dewar says.
One important factor that is often overlooked is that boards need to create space for new CEOs to be open and transparent, rather than feeling like they need to act as if everything is perfect. The tone set at your first board meeting—whether it's safe to acknowledge uncertainty or share your concerns—will determine whether the rest of your term can be candid or performance art.
Autumn: Fighting complacency
This is where the board benefits. Three to five years later, when a CEO has had a strong start and is performing well, the biggest risk is complacency. “Everything is going well,” Dewar said. “Can't we just keep playing the same way? So how do we have the discipline as a board to really shock the system?”
The best boards don't wait for a crisis. They encourage CEOs and top teams to think ahead while current priorities are still being implemented. This might mean taking the board along on a listening and learning tour. Piyush Gupta, former CEO of Singapore's DBS Group, took his board to Silicon Valley to understand where banking technology was heading. That might mean an off-site annual strategy where the board and CEO push each other's ideas about what happens next. “They're on a learning journey together,” Dewar said.
But boards also need the courage to ask difficult questions. “If you were new to the seat, if you came in from the outside, or worse, if you were an activist, what would you see? What would you see differently?” These are not adversarial questions. These are provocations designed to ensure CEOs are thinking bold enough about the hill they need to climb as an organization.
Michael Dell, who has been CEO since he was 19 years old and has navigated decades of changes in technology, markets, and customer needs, asks his team to imagine a competitor that will outperform Dell in three years' time on every front, including products, services, and price. “If we were those competitors, what would we be doing now to be ready to beat Dell in three years?” Dewar says Dewar would ask. “Are board members asking questions like that?”
This also means giving CEOs more leeway to make big bets that could cause short-term disruption. “Maybe we need to give CEOs a little bit of time and know that they're going to have a turbulent quarter or two because they're making big investments for the future,” Dewar said. At the same time, you need to be close enough to understand these puts and takes to avoid surprises.
However, please be careful. Some CEOs don't change direction and are constantly chasing new ideas. “Sometimes, Dewar says, you need to say, 'No, we bet on this. We believe in you. Even if there's noise in the system, we're going to stick with it and give it the time we know it needs.' The board's job is to understand the difference between strategic tenacity and strategic complacency.
Boards should ask Netflix's famous question at least once a year. “If you had to rehire this CEO today, would you do it?'' “It's not about making change for change's sake,'' Dewar says. “Disruption is costly, but at least try to have a conversation about what qualities this organization is looking for in a CEO and whether we have those qualities.”
Winter: Adjust the handover
When the baton is passed from one CEO to the next, bad transitions destroy an estimated trillions of dollars in S&P value each year, Dewar said. “Some CEOs hang on to their jobs because they can't imagine what life will be like,” she says. “They worry about not being relevant or having a purpose.” Helping people develop relationships, hobbies, and interests is about more than just being nice. It's protective.
An even bigger governance issue is that 17% of retired CEOs still have an office as executive chair and come into the office every day. “That's not great governance,” Dewar said. “It's really tough for the new CEO. It's a mess in terms of accountability.” There may be a specific reason to keep someone around for a set period of time, such as being in the middle of a merger, but it's not a courtesy and should be time-limited and tied to a specific job.
Dewar likes the idea of a “one-way phone call” for the new CEO to seek advice from the outgoing CEO. The person who left shouldn't be dialed in many levels down to figure out what's going on and have an opinion. “Warren Buffett said he was going to be silent,” Dewar points out. “Should an outgoing CEO be silent? That's a question that needs to be addressed.”
Successful leadership transitions require boards to manage both the exit and entry points. Intuit's Brad Smith has discussed CEO succession with his board of directors 44 times (once a quarter) over 11 years. Sometimes it was bench development, Dewar said, and sometimes it was timing. “At least every year, take a step back and ask yourself: Can I rehire this person today given where the business is going?”
Some of the most sensitive conversations involve developing a strong successor who may leave if the transition takes too long. “I've seen boards say, 'Maybe we can appoint the current CEO for a few more years, but if we don't make a decision now, we're going to lose someone who's going to be CEO for the next 10 years,'” Dewar said. “It's a very adult conversation.”
Asked for his final advice to board members, Dewar returns to his thoughts. “If you really want your board to be helpful, how do you engage with the CEO? If you really want it to be a productive, positive, expansive relationship, how honest will you be with each other? How much information will you share?”
As always, the rule is “nose in, hand out.” But Dewar urges boards to ask themselves throughout the process whether they are doing everything possible to make their CEOs highly successful. “Because it's great for shareholders, it's great for employees, it's great for all voters,” she says. It's not just the CEO.
