Making The Handoff

As the right hand guy of Gibson founder, Dan Gibson, our Chairman Greg Downes witnessed almost daily battles between Dan and his son Dave on the direction of the organization. “One day after one of those shouting matches, Dan walked out and simply said, ‘Dave’s in charge now.’” Greg knew it could be done better than that.

“When it came time for Dave and I to transition, we did it better than he and Dan did, but there was still a lot of room for improvement,” said Greg.

For organizational success, getting leadership transition right is a bottom-line proposition. According to member-based advisory firm CEB, those teams that get leadership transition right hit their three-year performance goals 90% of the time. The attrition risk is also 13% lower than average with a high performing transition. Profitability is 2 to 5% higher.

Not all leadership transitions are the same; they are situational in nature. From their research, CEB describes five types that make up the great majority of all hand-offs:

1. Smooth Sailing (3%) – A previously arranged plan was in place and the transition occurs under normal business conditions. These are the lucky few.
2. Replacing an Icon (18%) – The outgoing leader was very successful in their role. They are a very tough act to follow requiring the new leader to respect the legacy while putting their own stamp on things.
3. Jump Start (19%) – The preceding leader’s performance was solid. The organization faces new challenges they must quickly respond to with a new strategy or direction.
4. Following a Train Wreck (27%) – The previous leader failed spectacularly. A clear vision is needed and quick attention to relationships.
5. Breaking Ground (31%) – The role was handled by someone else and is created to meet new challenges. Typically there is an expansion of the leadership team requiring rearranging the duties of current team members.

When Greg passed me the baton, I was definitely “Replacing an Icon”. How could I possibly fill his shoes? How could I be him? The answer was that I couldn’t and I’m not. I have to be me. But the pressure I put on myself to live up to Greg’s iconic standards internally and in the community were immense. On the other hand, I bet if you asked Greg, true to his humble nature, he would say that I inherited a “Jump Start” situation.

Ego & Greed Get In The Way
“After you’ve been the leader of an organization for any length of time, it’s really hard to watch, much less admit, that someone could do things better than you did,” Greg told me as I discussed this blog with him.

He continued, “So often ego gets in the way of a good transition. The transitioning leader who quite often is the founder and maybe even the father, is absolutely convinced no one will be able to fill his shoes, will work as hard as he did, care as much and generally just do it his way.”

“The job and his role may be what defines him as a person. Most important, he just can't give up control of what he built. To turn over any part of his responsibilities would diminish his role and more than likely his favorite thing in the whole world,” said Greg. “And that is ‘being the man.’”

Greg cautioned that greed can complicate the transition too. “It’s closely related to ego. Quite often these two issues are happening simultaneously and it’s my belief they are the main drivers of failed transitions.”

“Many leaders are simply too greedy or selfish to create enough compensation under the ‘salary cap’ to adequately pay for the talent it takes to succeed them. They can't or won't justify hiring someone to do what they are already doing, and they sure aren’t going to be okay paying him or her more than they make, which may be necessary,” said Greg.

To me that’s almost like running in a relay and approaching the handoff zone only to speed on past your teammate without handing off the baton. I googled “how to pass a relay baton” and got these four instructions. So simple, yet so appropriate.

1. Time it so that when the approaching runner hits the mark, the outgoing runner starts to sprint.
2. Reach back with the outgoing runner's receiving hand, arranging an inverted "V" with the hand
3. Move the approaching runner's arm in an upward motion and place the baton in his hand. He takes the baton from the outgoing runner.
4. Always run through the pass, never slowing down in the timing of the exchange.

What’s The Risk?
CEOs tend to have sizeable egos. After all, a healthy amount of it keeps them believing in the vision and forging ahead even when things are difficult. However, without being committed to something much greater than themselves, the risk of falling into the ego and greed traps is quite significant.

Lucky for all of us at Gibson, Dave and Greg both embodied servant leadership at its finest; they humbled themselves for the good of the organization. In their own way, they each left an incredible legacy. While they might debate the details of our handoffs, there is no debating that both of these guys put ego and greed aside when it came to the organization.

Today that spirit lives on. It’s why we put an ESOP in place in 2010 to share ownership with all of our employees. It’s why we GIVE What Matters Most to organizations like the Boys & Girls Clubs. From the very beginning, we’ve been committed for the long haul to our clients, colleagues, and to our communities. And that’s not about to change as I run my leg of the race.