Industry digest: When is the right time for a leader to step aside?

Joe Biden’s decision not to stand for re-election in the US begs the question: is there a right time for a leader, whether in politics or business, to retire? In Biden’s case, few would disagree with his call to hand over to a younger candidate given the frailties he revealed in his TV debate with Donald Trump. The ageing process comes to us all, and if a leader’s ability to perform at their best is impeded by declining physical and mental health, then reducing hours or retiring altogether are really the only options. But accepting one’s limitations is never easy, and even Biden spent several weeks’ protesting that he was fit for another term at the age of 81 before the evidence of the polls made the decision for him. While every leader is different, some are more self-reflective than others – more willing to listen to the nagging voices within them telling them the time has come to go or scale back. Bill Gates was only 53 when he gave up his day job at Microsoft to spend more time on his philanthropic work while former New Zealand Prime Minister Jacinda Ardern was 42 when she retired from politics last year citing occupational burn-out. From the automotive world, Akio Toyoda was remarkably frank when he announced last year that he was stepping down from his longstanding position of President and CEO of Toyota at the age of 66. Describing himself as ‘an old-fashioned person’ when it came to digitalisation, EVs and connectivity, he said he was making way to ‘let young people enter the new chapter of what the future of mobility should be like’. The example of Toyoda is not intended to feed the ageist stereotype that older people are more traditional in their ways and less open to new technology but to show how leaders can play a proactive part in ensuring a healthy and seamless succession in the interests of their organisation. Compare and contrast to what is currently happening at News Corp and Fox Corporation, where the row over who will succeed 93-year-old Rupert Murdoch at the helm of the media empire is more extreme than any of the plotlines of Succession, the fictionalised TV series that was inspired by the Murdoch dynasty. The real-life drama will play out in court in September, where Murdoch senior is seeking to change the terms of a trust to hand strategic control of his empire to his son, Lachlan, while stripping away the equal voting rights of his other son, James, and daughters Elisabeth and Prudence. In an era when effective succession planning is playing an increasingly critical part in future-proofing businesses, it is utterly extraordinary that the future direction of perhaps the world’s most powerful media empire will be decided in a Nevada courtroom. Fortunately, I come across many automotive businesses that are taking a much longer view of succession planning when it comes to identifying high-potential employees relatively early in their careers and putting the right development programmes in place. We also discovered during research for our Skills Evolution Roadmap 2025 project that some organisations are tapping into leaders who have stepped down from their executive roles to fill their skills gaps, getting value from their experience and practical help on a temporary or part-time basis. Providing succession pathways for talented employees brings the added benefit of helping to retain high-performing staff at time of intense competition for skills, while also laying the foundations for an ultimately smooth transition. When the time comes for the leader to pass the baton, I am reminded of the old Cub Scout motto. Be prepared. Lynda Ennis is the founder of global automotive and mobility executive search company Ennis & Co.