A Capable CEO Should Be Able to Hand Over at the Right Time

#JudgeAGreatLeaderByWhetherTheyMakeTheRightDecisionsAtCriticalOrDangerousMoments #ACapableCEOCanAlsoLeaveAtTheRightTime Robert Iger became Disney’s CEO in 2005. He made the right decisions at many critical moments, leading Disney’s acquisitions of Pixar in 2006, Marvel in 2009, and Lucasfilm—the Star Wars business—in 2012. Along the way, he upgraded and transformed Disney and took its services around the world. Disney+ launched in 2019, giving Disney something new to develop during the exceptionally bleak film and television year of 2020, rather than suffering losses on every front. Whether Iger’s retirement in February 2020 came at the best possible time remains to be seen. At least he positioned Disney to catch up rapidly with Netflix in the newest streaming arena. A leader must be able to step up and shoulder responsibility at critical moments, and to step aside while still doing well. Morris Chang, for example, handed TSMC’s CEO role to Rick Tsai in 2005, returned as CEO in 2009, and finally retired in 2018, handing over to the present leadership team. He left his successors a larger stage and more room to act. TSMC continued moving forward through a well-developed system, setting new highs in revenue, profit, and market capitalization. Compared with the many companies that deteriorate after a handover, Chang deserves respect for his decisions at those pivotal moments. A capable CEO persists when persistence is needed and lets go decisively when it is time. Smooth sailing reveals little about a person’s judgment; difficult times expose the ability to make difficult decisions. In May 2020, at the pandemic’s most difficult point, Airbnb CEO Brian Chesky decisively laid off 25% of the workforce. Alongside those layoffs, he completed a US$2 billion financing, although the valuation fell sharply to US$18 billion. Amid the pandemic’s severity and uncertainty, Chesky made prompt decisions and put the company’s survival first. By late December 2020, its market capitalization exceeded US$90 billion. A CEO must make pivotal decisions at every stage. Stepping down at the right time is particularly difficult. But the point of leaving is to help the business develop further, rather than make it perpetually dependent on you and vulnerable to collapse when you go. Many people would have voted Elon Musk CEO of the year in 2020. Yet if Tesla, SpaceX, and his other businesses would face succession problems, operating difficulties, or a sharp decline in market capitalization without him, then Musk still has more to learn about management and leadership.