For owners, the time to transition is before they’re ready

“The final test of greatness in a CEO is how well he chooses a successor and whether they can step aside and let their successor run the company.”

“The final test of greatness in a CEO is how well he chooses a successor and whether they can step aside and let their successor run the company.”

— Management consultant Peter Drucker

Too often, owner/managers of private companies hold onto the reins for too long.

This tendency deprives younger managers the opportunity to make their mark and the companies do not gain their energy, enthusiasm and leadership in top spots. Worse, this talent leaves because they don’t see opportunity.

Management transition is important because it rejuvenates leadership and provides the basis for continuing growth in businesses. And developing the next generation of leadership and management is the only way for the existing generation to exit on its terms.

Here is an example, using managers who were identified, of two public companies that have worked through this challenge: AutoZone and FedEx.

The management team at AutoZone, with an average age of 51 years, is younger than the named management at FedEx, which has an average age of 61. The age spread of 11 named managers at AutoZone is 38 to 60. The age spread for the named managers at FedEx is 45 to 72.

AutoZone CEO William Rhodes is 49. FedEx CEO Fred Smith is 70.

So, how long to be a CEO?

AutoZone and FedEx clearly followed different strategies and have different histories of evolving managements.

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