Executive Summary Carl De Torres When Lloyd Blankfein was preparing to retire as chairman and CEO of Goldman Sachs on October 1, 2018, he wrote a poignant letter to employees that captured his ambivalence about stepping down. “It’s always been hard for me to imagine leaving,” wrote Blankfein, who had just turned 64. “When times are tougher, you can’t leave. And when times are better, you don’t want to leave. Today, I don’t want to retire from Goldman Sachs, but…it feels like the right time.” Getting this timing right is an essential part of a CEO’s job—and it’s more difficult than it appears. For leaders who have spent decades working to reach the pinnacle of their careers—with all the power, perks, and prestige that come with the role—retiring can be a scary, almost existential prospect. Their self-worth is often connected to their work, and the questions they face go to the heart of their self-image: How can I remain vital and relevant? Will people still respect me without my title? Where should I live now that I’m not tied to headquarters? How will I fill my days? Without an organization to lead, how can I continue to make a difference in the world? While CEOs are working 70-to-80-hour weeks, it is impossible to consider these questions with clarity or to explore what might be possible or fulfilling after they retire. Giving up their jobs feels like stepping off a cliff. Without answers, many CEOs default to remaining too long in the job. Yet by doing so, they may imperil their legacies and their companies. I have spent more than 25 years grappling with these issues—and helping others reflect on them. In 2001, at age 58, I left the CEO job at Medtronic after having served 10 years—a term limit I’d established when I assumed the role. At Harvard Business School, where I teach courses to CEOs, we talk extensively about the arc of a leader’s tenure, finding the right time to exit, and reconstructing one’s professional and personal life after leaving the job. As a board member of numerous organizations, I have been directly involved in counseling CEOs as they devise their exit strategies and postretirement plans. Apart from my board work, I have served as an informal counselor to more than two dozen chief executives who’ve reached out to me when they faced this turning point. In these conversations I encourage CEOs to leave while they are on top, rather than wait too long and risk being forced out by their boards when the business is not doing well. CEOs who refuse to retire make their boards’ job much more difficult. Without a clear timetable, grooming internal successors and following an orderly succession process become challenging. By stepping aside at the appropriate moment, a CEO can create time and space for reflection before making new commitments. With people living into their eighties and nineties, the options are numerous. For a vivid example of the problems caused by a CEO who fails to step down at the right moment, look at General Electric. In 2017, when the GE board forced Jeff Immelt to resign after 16 years, it appointed an internal candidate, John Flannery, as CEO. The timing was terrible: Flannery spent a year trying to clean up the messes he had inherited (which included an ill-advised acquisition and an accounting scandal) before the board lost patience, fired him, and persuaded its newest board member, Larry Culp, to become CEO. Culp now faces a daunting turnaround. During Immelt’s too-long tenure, GE shareholder value declined 73% while that of its peers in the Dow Jones Industrial Average increased 179%. There was a time when business schools studied GE as a model for CEO succession. Now it’s being taught as a case study in how not to handle the process, largely because of Immelt’s failure to properly time his exit. Although CEOs inhabit a rarefied realm, variations on this decision—When should I retire, and what should I do next?—apply to professionals at all levels. This article focuses on the unique circumstances facing CEOs, but parts of the process I suggest are useful to anyone entering the final laps of a career. Get the Timing Right Thinking about when to begin and how to spend a long retirement is a relatively new problem. A generation ago, when most people died in their late sixties or early seventies, the answer was simple: retire and move to Florida for warm weather and daily golf. Today, when many people live well into their eighties and nineties, retirement may last for decades, so deciding what to do is more complex, with a wider range of exciting options available. In his theory of psychosocial development, Erik Erikson described the stage humans reach in late midlife as they approach retirement age and face a choice between generativity and stagnation. Generativity involves spreading your knowledge and wisdom across many people and organizations while actively continuing to learn. In contrast, stagnation occurs when leaders retire altogether and are left with no way to contribute, so they feel disconnected from their communities and society. In my experience, when thinking about the right time for a CEO to retire, tenure in the job is a more important variable than age. It’s rare to find an organization that performs better after a CEO has been in the role more than 10 to 12 years. There are exceptions, of course, including the companies whose long-tenured executives appear in HBR’s best-performing CEOs ranking (some of them company founders, whose role in creating the firm and large ownership stake create power and succession dynamics different from those facing most CEOs). In general, nonfounder CEOs should avoid too-lengthy tenures for several reasons. Being CEO is an extremely demanding, travel-intensive job that requires great creativity, energy, tenacity, and resilience, and leaders often have a hard time sustaining those qualities for more than a decade. The strategies the CEO put in place may simply run out of gas, and the company will require new leadership to implement a strategic transformation. Not wanting to post poor bottom-line results, some long-tenured CEOs make decisions aimed at maintaining near-term results; thus they fail to make the bold investments required to drive long-term growth. Other CEOs display the opposite behavior: Late in their tenure they make a large acquisition in an effort to avoid a growth slowdown—but in so doing, they create complexity that the board is reluctant to hand over to an inexperienced successor. Take a personal inventory of your life, your career, and your time as CEO. Do you still find fulfillment and joy in the job? Do you feel the passion, energy, and excitement you once did? Are you still learning and feeling challenged?

Do you have personal reasons to leave earlier than planned? Is your partner eager to start a new phase of life with you? Do you have family or health issues that may cause you to leave sooner than expected?

Are you facing an unexpected career opportunity that won’t come around again? Former Goldman Sachs CEO Hank Paulson wasn’t planning to leave his role but felt compelled to accept President George W. Bush’s appeal to become U.S. treasury secretary.

How is succession shaping up? If you have multiple internal candidates, how old are they relative to you? If you stay longer, will your successor still be young enough to have a long run in the job? Alternatively, is your successor prepared to be CEO right now and possibly unwilling to wait around if your timetable is uncertain? That situation confirmed the timing of my exit from Medtronic after 10 years: My successor, Art Collins, was only five and a half years younger than I and was ready to be CEO. If I had chosen to stay longer, he most likely would have taken a CEO position elsewhere.

At the other extreme, is your planned successor not ready or running into some difficulties? In that case you may have to extend your tenure so that other candidates can be prepared. Former Merck CEO Roy Vagelos encountered such a situation when his designated successor violated the company’s code of conduct and the board asked Vagelos to stay until it could complete an external search.

Are there company-specific milestones you want to achieve before you depart, such as the integration of a major acquisition, the launch of an important new product, or the completion of a long-running project? John Noseworthy remained in his role as Mayo Clinic CEO until the IT team finished implementing a very complex technology infrastructure system.

Is your industry changing so dramatically that your company would benefit from a fresh perspective? After eight years as the CEO of Novartis, Joe Jimenez handed over the reins to Vas Narasimhan to lead the pharmaceutical company’s push into emerging gene and cell-based therapies.

Does your company have a mandatory retirement age? Not long ago, most companies did (typically 65), but many have dropped it as health and longevity have improved. Today when a board has a high-performing CEO who wants to continue, the directors are often willing to eliminate a mandatory retirement policy. At Ford, where CEOs traditionally retired at 65, the board asked Alan Mulally to stay until just before he turned 69. Merck recently changed its policy to extend Ken Frazier’s tenure as chief executive after he turns 65. Mandatory retirement policies can be useful for forcing out leaders who are reluctant to step aside, but boards should recognize that age 65 is arbitrary and that flexibility may be in the company’s best interest. As Blankfein pointed out, there is no perfect time for a CEO to leave. To avoid staying too long, CEOs should regularly work through these questions, which are designed to identify when to exit: The relevance of these questions will vary in each CEO’s case, but taken together, they provide an important list of issues that leaders should contemplate in deciding when it’s best to move on. Craft Your Next Act Slowly and Deliberately One reason CEOs hold on too long is that they can’t imagine what comes next. This is shortsighted. Today former CEOs have myriad opportunities to continue to lead and make meaningful contributions. Whether they choose to serve on corporate and nonprofit boards, teach, write books, get involved in nonprofit organizations, join a private equity firm, create a foundation, serve in government, or mentor emerging leaders, many former CEOs find that this period of generativity is very fulfilling. Leaders who construct a satisfying post-CEO life often develop a positive reputation—and, in my experience, seem more content. An example is Steve Reinemund, who served as CEO at PepsiCo from 2001 to 2006. During that time he set the standard for values-centered leadership, grew revenue and market capitalization, and diversified PepsiCo’s management. At age 58 Reinemund stepped down to focus on his family’s needs, making way for Indra Nooyi to succeed him. After retiring he spent six years as the dean of Wake Forest’s business school, giving it a focus on values and ethics. In addition, he has served on the boards of Johnson & Johnson, American Express, ExxonMobil, Walmart, and Marriott, where he has been a strong advocate for values, ethics, and diversity. When I discuss retirement with CEOs, I suggest this step-by-step approach: 1. Finish strong and go out on top. Many CEOs worry that they will become lame ducks as soon as their succession timetable is clear. I disagree. You are in charge until the last day, and you should finish your tenure on a high note. As Ecolab CEO Doug Baker puts it, “Run through the finish line.” By staying fully engaged, outgoing CEOs give their successors time to plan their own agendas without the pressures of daily business. That is precisely what John Noseworthy did as Mayo Clinic’s CEO: He gave the board nine months’ notice to select and prepare a successor while continuing to build Mayo’s medical business and leaving the financials in great shape when he retired, on December 31, 2018. During that time his successor, Gianrico Farrugia, was developing an agenda and organizing his top team. 2. Meet with a career coach or a therapist a year in advance. When leaving Medtronic, I had fears about losing relevance, not having a platform, or lacking meaning in my life. So I went back to a therapist I had seen years before and talked those issues through. In addition to exploring my fears, the discussions enabled me to envision what my new life might look like and what my options might be. Recognizing that I didn’t want to take on another full-time role gave me the freedom to explore many other things that life has to offer. I still had no idea how I would feel or what I might do when I left, but I was better prepared to cope with the unknown. After I left the job, I spent two years figuring out my next steps while teaching for 18 months as a visiting professor at two Swiss universities. By staying fully engaged, outgoing CEOs give their successors time to plan ahead. 3. If you’re married, talk through the transition with your spouse. Ask questions such as What would give us the greatest satisfaction? Where will we find fulfillment? Where would we like to live and spend time? What hobbies haven’t we had time to explore? Is there a bucket list of activities—such as living in another country—that my being CEO has prevented us from pursuing? My wife, Penny, and I met with a counselor six months before I left Medtronic to discuss those issues, and we were able to address the different stages we were at in our careers. 4. Say your goodbyes and make a clean break. In the months before you leave, make in-person visits to secure your relationships with key people, your employees, and customers. When your time is up, don’t hang around the C-suite. Move your office to a new location—preferably away from headquarters, but definitely far from the executive wing. I suggest that former CEOs go back to the company only when specifically invited by the new CEO. 5. Take six to 12 months to explore your options before making any firm commitments. Extended time away gives leaders a tabula rasa so that they can think clearly about what comes next. After I left Medtronic, Penny and I rented a villa in Provence and had visits from family and friends—something I had wanted to do previously, but then I couldn’t afford the time away from the company. During this exploration phase, don’t make any firm commitments. The first opportunities that come along may not be the best options, but some leaders accept them out of fear that they won’t be able to fill their time. They may want to retain a title and a business card and to let colleagues know they are still active. Be careful with smaller commitments, too; they can fragment your schedule and prevent you from taking extended vacations or being available for other, higher priorities. This new stage of exploration and saying “not yet” to emerging opportunities may be uncomfortable, but living with the discomfort will help you choose your next step wisely. 6. Make your decisions and move ahead. When you’re ready to take on new roles and activities, be flexible about your time obligations, knowing that these commitments are not forever. Then dive in 100% to learn everything you can and contribute as if you will be there the rest of your life. Weighing All the Options Beyond needing a process for weighing options, many retiring CEOs want to talk specifically about the pros and cons of the options they have. Here are the most common ones: Serve on corporate boards. These days most active CEOs are restricted by their own boards to serving on a single outside board; but once they step aside, they can make vital contributions to multiple organizations. For this reason, recently retired CEOs are very much in demand as directors. Former DuPont CEO Ellen Kullman is an example: She sits on the boards of Amgen, Carbon, United Technologies, and Goldman Sachs (as a colleague of mine), where she shows a knack for digging deep into the details and asking important questions. Serving on boards enables you to stay engaged in the important issues companies are confronting and to develop new professional colleagues. But be aware of the time investment boards can require, especially during crises, because that may constrain your other activities. Teach. As I have learned, teaching MBA candidates and executives can be both rewarding and intellectually challenging, forcing you to remain sharp enough to keep up with your students and to understand the motivations and philosophies of a younger generation. You gain entry to the very different world of academia, with all its intellectual stimulation but also its bureaucratic frustrations. Teaching should not be entered into lightly, because doing it well takes an enormous amount of time. Many retired CEOs find it worth the investment. It has enabled me to fulfill a passion to help authentic leaders develop their capabilities. Coaching the next generation of leaders can be a satisfying way of giving back. Write books. Many retired CEOs write books. Several of these, such as those from Aetna’s Ron Williams (Learning to Lead), Campbell Soup’s Doug Conant (Touchpoints, with Mette Norgaard), Bridgewater’s Ray Dalio (Principles), and Baxter’s Harry Kraemer (Becoming the Best and From Values to Action), have been especially helpful to emerging leaders. Although writing can be very satisfying, it’s important to wait at least a year after retirement so that you can gain perspective and write about more than your experience at a single company. Lead nonprofit organizations. Serving on the boards of nonprofits can be especially gratifying. Some executives even take full-time leadership roles there. For instance, following a successful career as the CEO of U.S. Bancorp, Richard Davis became the chief executive of Make-A-Wish Foundation, in Phoenix, while also serving on the boards of Mayo Clinic and Twin Cities YMCA. But be warned: Although nonprofit leadership is personally rewarding, it can be just as demanding as being the CEO of a for-profit company. Join a private equity firm. The rapid growth of the private equity sector has created a real need for executives with strong operating experience who can bring fresh eyes to the often-troubled companies in PE portfolios. A good example is Harry Kraemer, an executive partner with Madison Dearborn. Kraemer is positive about his experiences; however, several former CEOs have confided to me their disappointment in private equity. They feel that they were promised more responsibility than was delivered and that the firms were simply using their names for prestige. Create a foundation. Many CEOs who accumulate significant wealth over the course of their careers decide to establish a foundation to achieve wider influence on important issues. That’s what former IBM CEO Sam Palmisano did when he established the Center for Global Enterprise (CGE) at Rockefeller University in New York. At IBM, Palmisano developed his theories regarding globally integrated organizations. In creating CGE, he was able to engage with scholars to deepen those ideas and put them into practice. Penny and I used Medtronic stock to create the George Family Foundation, which she chairs, focused on integrated health and healing and authentic leadership. We have found it enormously rewarding to support nonprofit organizations doing important work, but it can be challenging to realize the outcomes you desire. Serve in government. Many former CEOs have moved into government service, whether by appointment or by seeking elective office. My Harvard Business School classmate Michael Bloomberg is a superb example: He served three terms as mayor of New York City and remains an important voice on a range of social and political issues. In the right circumstances, serving in government can be fulfilling, create meaning, and burnish one’s legacy. In the wrong ones it can be deeply frustrating, as former ExxonMobil CEO Rex Tillerson learned during his 14 months as U.S. secretary of state—when he often found himself at odds with President Trump. Mentor leaders. In the past decade rising executives have sought out coaching and mentoring opportunities, and many people recognize that former CEOs make very thoughtful coaches. Coaching the next generation of leaders can be a satisfying way of giving back. Former Novartis CEO Dan Vasella travels the world coaching CEOs and running mentoring programs for leaders. Morgan Stanley’s John Mack finds great joy in coaching young entrepreneurs. The rewards of mentoring far exceed the investment of time required. CONCLUSION At a moment when authentic leaders are needed throughout society, it’s an enormous loss if former CEOs simply retire to warmer regions and make no attempt to help solve the world’s myriad problems. The possibilities listed above enable such experienced leaders to make very important contributions to society while still having time for family and friends, hobbies, and travel. Among the many former CEOs I know, the ones who are thriving have found ways to create or nurture things that will outlast them. Their generative approach to their later years brings them a sense of well-being—and helps improve the world.

The Best-Performing CEOs in the World, 2019

When Jensen Huang cofounded NVIDIA, in 1993, he focused on a single niche: building powerful computer chips to create graphics for fast-moving video games. As the company went public in 1999 and grew through the 2000s, video games remained its growth engine—but even back then, Huang, a Taiwanese immigrant who studied electrical engineering at Oregon State and Stanford, could see a different path forward. Data scientists were beginning to ask computers to perform much more sophisticated calculations more quickly, so NVIDIA began spending billions of dollars on R&D to create chips that would support artificial intelligence applications. By the mid-2010s its AI-focused chips had come to dominate this nascent market, showing up inside autonomous vehicles, robots, drone aircraft, and dozens of other high-tech tools. One look at NVIDIA’s stock chart shows how this bet has paid off: From late 2015 to late 2018, the company’s stock grew 14-fold—a performance that puts Huang, 56, in the top spot on HBR’s list of best-performing CEOs in the world this year. CEO 100 Ranking Name/Company Information 1. Jensen Huang

NVIDIA Industry: Information Technology | Country: United States | Start Year: 1993 | Insider: YES | MBA: NO | Financial Rank: 4 | Sustainalytics: 101 | CSRHUB: 179 2. Marc Benioff*

Salesforce.com Industry: Information Technology | Country: United States | Start Year: 2001 | Insider: YES | MBA: NO | Financial Rank: 6 | Sustainalytics: 122 | CSRHUB: 229 3. François-Henri Pinault

Kering Industry: Consumer Goods | Country: France | Start Year: 2005 | Insider: YES | MBA: YES | Financial Rank: 30 | Sustainalytics: 137 | CSRHUB: 118 4. Richard Templeton

Texas Instruments Industry: Information Technology | Country: United States | Start Year: 2004 | Insider: YES | MBA: NO | Financial Rank: 56 | Sustainalytics: 59 | CSRHUB: 135 5. Ignacio Galán

Iberdrola Industry: Utilities | Country: Spain | Start Year: 2001 | Insider: NO | MBA: YES | Financial Rank: 87 | Sustainalytics: 26 | CSRHUB: 43 6. Shantanu Narayen

Adobe Industry: Information Technology | Country: United States | Start Year: 2007 | Insider: YES | MBA: YES | Financial Rank: 43 | Sustainalytics: 204 | CSRHUB: 82 7. Ajay Banga

Mastercard Industry: Information Technology | Country: United States | Start Year: 2010 | Insider: YES | MBA: YES | Financial Rank: 13 | Sustainalytics: 166 | CSRHUB: 284 8. Johan Thijs

KBC Industry: Financial Services | Country: Belgium | Start Year: 2012 | Insider: YES | MBA: NO | Financial Rank: 78 | Sustainalytics: 36 | CSRHUB: 111 9. Satya Nadella

Microsoft Industry: Information Technology | Country: United States | Start Year: 2014 | Insider: YES | MBA: YES | Financial Rank: 86 | Sustainalytics: 99 | CSRHUB: 13 10. Bernard Arnault

LVMH Industry: Consumer Goods | Country: France | Start Year: 1989 | Insider: NO | MBA: NO | Financial Rank: 7 | Sustainalytics: 337 | CSRHUB: 154 11. Erik Engstrom

RELX Industry: Commercial Services | Country: United Kingdom | Start Year: 2009 | Insider: YES | MBA: YES | Financial Rank: 97 | Sustainalytics: 75 | CSRHUB: 2 12. Michael Mussallem

Edwards Lifesciences Industry: Health Care | Country: United States | Start Year: 2000 | Insider: YES | MBA: NO | Financial Rank: 18 | Sustainalytics: 195 | CSRHUB: 254 13. Elmar Degenhart

Continental Industry: Automobile | Country: Germany | Start Year: 2009 | Insider: NO | MBA: NO | Financial Rank: 67 | Sustainalytics: 153 | CSRHUB: 177 14. Anders Runevad**

Vestas Industry: Industrials | Country: Denmark | Start Year: 2013 | Insider: NO | MBA: YES | Financial Rank: 114 | Sustainalytics: 27 | CSRHUB: 85 15. Bernard Charlès

Dassault Systémes Industry: Information Technology | Country: France | Start Year: 1995 | Insider: YES | MBA: NO | Financial Rank: 24 | Sustainalytics: 373 | CSRHUB: 174 16. Nancy McKinstry

Wolters Kluwer Industry: Commercial Services | Country: Netherlands | Start Year: 2003 | Insider: YES | MBA: YES | Financial Rank: 94 | Sustainalytics: 211 | CSRHUB: 83 17. Hamid Moghadam

Prologis Industry: Real Estate | Country: United States | Start Year: 1997 | Insider: YES | MBA: YES | Financial Rank: 52 | Sustainalytics: 111 | CSRHUB: 382 18. Benoît Potier

Air Liquide Industry: Materials | Country: France | Start Year: 1997 | Insider: YES | MBA: NO | Financial Rank: 66 | Sustainalytics: 61 | CSRHUB: 384 19. Jean-Paul Agon

L’Oréal Industry: Consumer Goods | Country: France | Start Year: 2006 | Insider: YES | MBA: NO | Financial Rank: 142 | Sustainalytics: 129 | CSRHUB: 1 20. Mark Parker

Nike Industry: Consumer Goods | Country: United States | Start Year: 2006 | Insider: YES | MBA: NO | Financial Rank: 22 | Sustainalytics: 522 | CSRHUB: 183 21. Jacques Aschenbroich

Valeo Industry: Automobile | Country: France | Start Year: 2009 | Insider: NO | MBA: NO | Financial Rank: 159 | Sustainalytics: 92 | CSRHUB: 15 22. Simon Borrows

3i Industry: Financial Services | Country: United Kingdom | Start Year: 2012 | Insider: YES | MBA: YES | Financial Rank: 145 | Sustainalytics: 39 | CSRHUB: 140 23. Jamie Dimon

JPMorgan Chase Industry: Financial Services | Country: United States | Start Year: 2005 | Insider: YES | MBA: YES | Financial Rank: 84 | Sustainalytics: 188 | CSRHUB: 311 24. Laurence Fink

BlackRock Industry: Financial Services | Country: United States | Start Year: 1988 | Insider: YES | MBA: YES | Financial Rank: 5 | Sustainalytics: 308 | CSRHUB: 571 25. Gregory Goodman

Goodman Industry: Real Estate | Country: Australia | Start Year: 1995 | Insider: YES | MBA: NO | Financial Rank: 42 | Sustainalytics: 228 | CSRHUB: 479 26. Lisa Su

Advanced Micro Devices Industry: Information Technology | Country: United States | Start Year: 2014 | Insider: YES | MBA: NO | Financial Rank: 72 | Sustainalytics: 141 | CSRHUB: 428 27. Xavier Huillard

Vinci Industry: Industrials | Country: France | Start Year: 2006 | Insider: YES | MBA: NO | Financial Rank: 83 | Sustainalytics: 396 | CSRHUB: 128 28. Alfred Chan

Hong Kong and China Gas Industry: Utilities | Country: China /Hong Kong | Start Year: 1997 | Insider: YES | MBA: NO | Financial Rank: 47 | Sustainalytics: 432 | CSRHUB: 266 29. Debra Cafaro

Ventas Industry: Real Estate | Country: United States | Start Year: 1999 | Insider: NO | MBA: NO | Financial Rank: 32 | Sustainalytics: 415 | CSRHUB: 364 30. Gilles Andrier

Givaudan Industry: Materials | Country: Switzerland | Start Year: 2005 | Insider: YES | MBA: NO | Financial Rank: 133 | Sustainalytics: 254 | CSRHUB: 55 31. Martin Bouygues

Bouygues Industry: Industrials | Country: France | Start Year: 1989 | Insider: YES | MBA: NO | Financial Rank: 74 | Sustainalytics: 479 | CSRHUB: 108 32. Chuck Robbins

Cisco Systems Industry: Information Technology | Country: United States | Start Year: 2015 | Insider: YES | MBA: NO | Financial Rank: 186 | Sustainalytics: 38 | CSRHUB: 30 33. Hisashi Ietsugu

Sysmex Industry: Health Care | Country: Japan | Start Year: 1996 | Insider: YES | MBA: NO | Financial Rank: 85 | Sustainalytics: 529 | CSRHUB: 29 34. Richard Fairbank

Capital One Industry: Financial Services | Country: United States | Start Year: 1994 | Insider: YES | MBA: YES | Financial Rank: 23 | Sustainalytics: 560 | CSRHUB: 293 35. Heinz-Jürgen Bertram

Symrise Industry: Materials | Country: Germany | Start Year: 2009 | Insider: YES | MBA: NO | Financial Rank: 138 | Sustainalytics: 251 | CSRHUB: 64 36. Michitaka Sawada

Kao Industry: Consumer Goods | Country: Japan | Start Year: 2012 | Insider: YES | MBA: NO | Financial Rank: 177 | Sustainalytics: 77 | CSRHUB: 60 37. Marillyn Hewson

Lockheed Martin Industry: Industrials | Country: United States | Start Year: 2013 | Insider: YES | MBA: NO | Financial Rank: 97 | Sustainalytics: 301 | CSRHUB: 219 38. Douglas Baker Jr.

Ecolab Industry: Materials | Country: United States | Start Year: 2004 | Insider: YES | MBA: NO | Financial Rank: 63 | Sustainalytics: 492 | CSRHUB: 188 39. Fabrizio Freda

Estée Lauder Industry: Consumer Goods | Country: United States | Start Year: 2009 | Insider: YES | MBA: NO | Financial Rank: 26 | Sustainalytics: 585 | CSRHUB: 271 40. Reinhard Ploss

Infineon Technologies Industry: Information Technology | Country: Germany | Start Year: 2012 | Insider: YES | MBA: NO | Financial Rank: 175 | Sustainalytics: 65 | CSRHUB: 94 41. Carlos Rodriguez

ADP Industry: Information Technology | Country: United States | Start Year: 2011 | Insider: YES | MBA: YES | Financial Rank: 115 | Sustainalytics: 175 | CSRHUB: 268 42. Feike Sijbesma

DSM Industry: Materials | Country: Netherlands | Start Year: 2007 | Insider: YES | MBA: YES | Financial Rank: 194 | Sustainalytics: 19 | CSRHUB: 61 43. Shigenobu Nagamori

Nidec Industry: Industrials | Country: Japan | Start Year: 1973 | Insider: YES | MBA: NO | Financial Rank: 16 | Sustainalytics: 501 | CSRHUB: 426 44. Luis Maroto

Amadeus IT Industry: Information Technology | Country: Spain | Start Year: 2011 | Insider: YES | MBA: YES | Financial Rank: 132 | Sustainalytics: 173 | CSRHUB: 220 45. Douglas Peterson

S&P Global Industry: Financial Services | Country: United States | Start Year: 2013 | Insider: YES | MBA: YES | Financial Rank: 134 | Sustainalytics: 237 | CSRHUB: 161 46. Íñigo Meirás

Ferrovial Industry: Industrials | Country: Spain | Start Year: 2009 | Insider: YES | MBA: YES | Financial Rank: 162 | Sustainalytics: 245 | CSRHUB: 45 47. Michael Mahoney

Boston Scientific Industry: Health Care | Country: United States | Start Year: 2012 | Insider: YES | MBA: YES | Financial Rank: 48 | Sustainalytics: 591 | CSRHUB: 252 48. Jean-Pascal Tricoire

Schneider Electric Industry: Industrials | Country: France | Start Year: 2006 | Insider: YES | MBA: YES | Financial Rank: 211 | Sustainalytics: 60 | CSRHUB: 28 49. Glenn Chamandy

Gildan Activewear Industry: Consumer Goods | Country: Canada | Start Year: 2004 | Insider: YES | MBA: NO | Financial Rank: 174 | Sustainalytics: 182 | CSRHUB: 84 50. George Kwok Lung Hongchoy

Link REIT Industry: Real Estate | Country: China /Hong Kong | Start Year: 2010 | Insider: YES | MBA: YES | Financial Rank: 80 | Sustainalytics: 439 | CSRHUB: 275 51. Olivier Filliol

Mettler Toledo Industry: Health Care | Country: Switzerland | Start Year: 2008 | Insider: YES | MBA: YES | Financial Rank: 130 | Sustainalytics: 149 | CSRHUB: 350 52. Masahiko Uotani

Shiseido Industry: Consumer Goods | Country: Japan | Start Year: 2014 | Insider: NO | MBA: YES | Financial Rank: 104 | Sustainalytics: 330 | CSRHUB: 303 53. Frederick Smith

FedEx Industry: Transportation | Country: United States | Start Year: 1971 | Insider: YES | MBA: NO | Financial Rank: 58 | Sustainalytics: 319 | CSRHUB: 549 54. Tadashi Yanai

Fast Retailing Industry: Retail | Country: Japan | Start Year: 1984 | Insider: YES | MBA: NO | Financial Rank: 7 | Sustainalytics: 486 | CSRHUB: 625 55. Robert Iger

Disney Industry: Communication | Country: United States | Start Year: 2005 | Insider: YES | MBA: NO | Financial Rank: 36 | Sustainalytics: 570 | CSRHUB: 429 56. Michael Zahn

Deutsche Wohnen Industry: Real Estate | Country: Germany | Start Year: 2008 | Insider: YES | MBA: NO | Financial Rank: 75 | Sustainalytics: 366 | CSRHUB: 457 57. Michael Lamach

Ingersoll-Rand Industry: Industrials | Country: United States | Start Year: 2010 | Insider: YES | MBA: YES | Financial Rank: 134 | Sustainalytics: 343 | CSRHUB: 207 58. Rune Bjerke***

DNB Industry: Financial Services | Country: Norway | Start Year: 2007 | Insider: NO | MBA: NO | Financial Rank: 205 | Sustainalytics: 52 | CSRHUB: 171 59. Mike Lawrie****

DXC Technology Industry: Information Technology | Country: United States | Start Year: 2012 | Insider: YES | MBA: YES | Financial Rank: 123 | Sustainalytics: 130 | CSRHUB: 484 60. Peter Wennink

ASML Industry: Information Technology | Country: Netherlands | Start Year: 2013 | Insider: YES | MBA: NO | Financial Rank: 248 | Sustainalytics: 24 | CSRHUB: 34 61. Jean-François van Boxmeer

Heineken Industry: Consumer Goods | Country: Netherlands | Start Year: 2005 | Insider: YES | MBA: NO | Financial Rank: 201 | Sustainalytics: 110 | CSRHUB: 185 62. Tim Cook

Apple Industry: Information Technology | Country: United States | Start Year: 2011 | Insider: YES | MBA: YES | Financial Rank: 124 | Sustainalytics: 406 | CSRHUB: 265 63. Ma Huateng

Tencent Industry: Communication | Country: China | Start Year: 1998 | Insider: YES | MBA: NO | Financial Rank: 2 | Sustainalytics: 600 | CSRHUB: 644 64. Carlos Tavares

Peugeot Industry: Automobile | Country: France | Start Year: 2014 | Insider: NO | MBA: NO | Financial Rank: 250 | Sustainalytics: 82 | CSRHUB: 14 65. Paolo Rocca

Tenaris Industry: Energy | Country: Argentina | Start Year: 2002 | Insider: YES | MBA: NO | Financial Rank: 65 | Sustainalytics: 329 | CSRHUB: 647 66. Florentino Pérez Rodríguez

ACS Industry: Industrials | Country: Spain | Start Year: 1993 | Insider: YES | MBA: NO | Financial Rank: 53 | Sustainalytics: 626 | CSRHUB: 415 67. David Simon

Simon Property Industry: Real Estate | Country: United States | Start Year: 1995 | Insider: YES | MBA: YES | Financial Rank: 15 | Sustainalytics: 606 | CSRHUB: 620 68. Dean Connor

Sun Life Financial Industry: Financial Services | Country: Canada | Start Year: 2011 | Insider: YES | MBA: NO | Financial Rank: 195 | Sustainalytics: 188 | CSRHUB: 197 69. Oliver Bäte

Allianz Industry: Financial Services | Country: Germany | Start Year: 2015 | Insider: YES | MBA: YES | Financial Rank: 249 | Sustainalytics: 72 | CSRHUB: 68 70. Jeffrey Sprecher

Intercontinental Exchange Industry: Financial Services | Country: United States | Start Year: 2000 | Insider: YES | MBA: YES | Financial Rank: 27 | Sustainalytics: 619 | CSRHUB: 568 71. George Cope*****

BCE Industry: Communication | Country: Canada | Start Year: 2008 | Insider: YES | MBA: NO | Financial Rank: 219 | Sustainalytics: 156 | CSRHUB: 136 72. Takahisa Takahara

Unicharm Industry: Consumer Goods | Country: Japan | Start Year: 2004 | Insider: YES | MBA: NO | Financial Rank: 113 | Sustainalytics: 460 | CSRHUB: 330 73. Greg Case

Aon Industry: Financial Services | Country: United Kingdom | Start Year: 2005 | Insider: NO | MBA: YES | Financial Rank: 31 | Sustainalytics: 554 | CSRHUB: 621 74. Yves Guillemot

Ubisoft Industry: Communication | Country: France | Start Year: 1988 | Insider: YES | MBA: NO | Financial Rank: 89 | Sustainalytics: 512 | CSRHUB: 402 75. Marc Casper

Thermo Fisher Scientific Industry: Health Care | Country: United States | Start Year: 2009 | Insider: YES | MBA: YES | Financial Rank: 63 | Sustainalytics: 707 | CSRHUB: 332 76. Jean-Sébastien Jacques

Rio Tinto Industry: Materials | Country: United Kingdom | Start Year: 2016 | Insider: YES | MBA: NO | Financial Rank: 168 | Sustainalytics: 108 | CSRHUB: 467 77. Pascal Soriot

AstraZeneca Industry: Health Care | Country: United Kingdom | Start Year: 2012 | Insider: NO | MBA: YES | Financial Rank: 202 | Sustainalytics: 160 | CSRHUB: 257 78. Simon Wolfson

Next Industry: Retail | Country: United Kingdom | Start Year: 2001 | Insider: YES | MBA: NO | Financial Rank: 91 | Sustainalytics: 607 | CSRHUB: 333 79. Raymond McDaniel Jr.

Moodyʼs Industry: Financial Services | Country: United States | Start Year: 2005 | Insider: YES | MBA: NO | Financial Rank: 90 | Sustainalytics: 412 | CSRHUB: 533 80. Daniel Amos

Aflac Industry: Financial Services | Country: United States | Start Year: 1990 | Insider: YES | MBA: NO | Financial Rank: 17 | Sustainalytics: 671 | CSRHUB: 618 81. Bobby Kotick

Activision Blizzard Industry: Communication | Country: United States | Start Year: 1991 | Insider: YES | MBA: NO | Financial Rank: 11 | Sustainalytics: 461 | CSRHUB: 858 82. James Robo

NextEra Energy Industry: Utilities | Country: United States | Start Year: 2012 | Insider: YES | MBA: YES | Financial Rank: 126 | Sustainalytics: 294 | CSRHUB: 493 83. Paul Perreault

CSL Industry: Health Care | Country: Australia | Start Year: 2013 | Insider: YES | MBA: NO | Financial Rank: 142 | Sustainalytics: 595 | CSRHUB: 122 84. Ivan Menezes

Diageo Industry: Consumer Goods | Country: United Kingdom | Start Year: 2013 | Insider: YES | MBA: YES | Financial Rank: 283 | Sustainalytics: 58 | CSRHUB: 5 85. André Desmarais†

Power Corporation of Canada Industry: Financial Services | Country: Canada | Start Year: 1996 | Insider: YES | MBA: NO | Financial Rank: 116 | Sustainalytics: 276 | CSRHUB: 574 85. Paul Desmarais Jr.†

Power Corporation of Canada Industry: Financial Services | Country: Canada | Start Year: 1996 | Insider: YES | MBA: YES | Financial Rank: 116 | Sustainalytics: 276 | CSRHUB: 574 87. Alfred Kelly Jr.

Visa Industry: Information Technology | Country: United States | Start Year: 2016 | Insider: NO | MBA: YES | Financial Rank: 186 | Sustainalytics: 291 | CSRHUB: 246 88. Sheng Yue Gui

Geely Automobile Industry: Automobile | Country: China /Hong Kong | Start Year: 2006 | Insider: YES | MBA: YES | Financial Rank: 56 | Sustainalytics: 686 | CSRHUB: 464 89. Piyush Gupta

DBS Bank Industry: Financial Services | Country: Singapore | Start Year: 2009 | Insider: NO | MBA: YES | Financial Rank: 152 | Sustainalytics: 290 | CSRHUB: 414 90. Colin Goldschmidt

Sonic Healthcare Industry: Health Care | Country: Australia | Start Year: 1993 | Insider: YES | MBA: NO | Financial Rank: 100 | Sustainalytics: 521 | CSRHUB: 427 91. Marc Grynberg

Umicore Industry: Materials | Country: Belgium | Start Year: 2008 | Insider: YES | MBA: NO | Financial Rank: 215 | Sustainalytics: 265 | CSRHUB: 151 92. Jussi Pesonen

UPM Industry: Materials | Country: Finland | Start Year: 2004 | Insider: YES | MBA: NO | Financial Rank: 253 | Sustainalytics: 107 | CSRHUB: 133 93. Leonard Schleifer

Regeneron Pharmaceuticals Industry: Health Care | Country: United States | Start Year: 1988 | Insider: YES | MBA: NO | Financial Rank: 19 | Sustainalytics: 682 | CSRHUB: 654 94. Jens Bjørn Andersen

DSV Industry: Transportation | Country: Denmark | Start Year: 2008 | Insider: YES | MBA: NO | Financial Rank: 173 | Sustainalytics: 230 | CSRHUB: 389 95. Björn Rosengren******

Sandvik Industry: Industrials | Country: Sweden | Start Year: 2015 | Insider: NO | MBA: NO | Financial Rank: 270 | Sustainalytics: 143 | CSRHUB: 38 96. Masayoshi Son

SoftBank Industry: Communication | Country: Japan | Start Year: 1981 | Insider: YES | MBA: NO | Financial Rank: 10 | Sustainalytics: 703 | CSRHUB: 699 97. Daniel Hajj Aboumrad

América Móvil Industry: Communication | Country: Mexico | Start Year: 2000 | Insider: YES | MBA: NO | Financial Rank: 49 | Sustainalytics: 508 | CSRHUB: 732 98. Gary Dickerson

Applied Materials Industry: Information Technology | Country: United States | Start Year: 2013 | Insider: YES | MBA: YES | Financial Rank: 207 | Sustainalytics: 347 | CSRHUB: 167 99. Brian Roberts

Comcast Industry: Communication | Country: United States | Start Year: 2002 | Insider: YES | MBA: NO | Financial Rank: 68 | Sustainalytics: 604 | CSRHUB: 570 100. Bruce Flatt

Brookfield Asset Management Industry: Financial Services | Country: Canada | Start Year: 2002 | Insider: YES | MBA: NO | Financial Rank: 25 | Sustainalytics: 855 | CSRHUB: 525 Huang is a new face at #1, but he’s no newcomer to the list: He ranked #2 in 2018 and #3 in 2017. (Last year’s top performer, Pablo Isla, of the Spanish retailer Inditex, moved from CEO to chairman, taking him out of consideration for 2019.) That consistency is typical of our list. Unlike rankings that are based on subjective evaluations or short-term metrics, it relies on objective performance measures over a chief executive’s entire tenure—and these “career numbers” tend to hold steady. It’s no surprise, then, that 65 of last year’s CEOs reappear this year. They do so despite a change in our methodology. Since 2015 our ranking has been based not only on financial performance but also on environmental, social, and governance (ESG) ratings. For the past four years we’ve weighted ESG scores to account for 20% of each CEO’s final ranking. This year we tweaked the formula, increasing that share to 30%. The shift reflects the fact that a rapidly growing number of funds and individuals now focus on far more than bottom-line metrics when they make investment decisions. One sign of this changing sensibility: In August 2019, 181 U.S. CEOs who are members of the Business Roundtable signed a statement affirming that the purpose of a corporation is to serve not just shareholders but four other groups of stakeholders: employees, customers, suppliers, and communities. How We Calculated the Rankings To compile our list of the world’s best-performing CEOs, we began with the companies that at the end of 2018 were in the S&P Global 1200, an index that reflects 70% of the world’s stock market capitalization and includes firms in North America, Europe, Asia, Latin America, and Australia. We excluded CEOs who’d been in the job for less than two years to ensure that we had a sufficient track record to evaluate. We also omitted those who left office before July 31, 2019. All told, we ended up with 883 CEOs from 876 companies (several companies had co-CEOs) based in 29 countries. Our research team was headed by Nana von Bernuth, an adjunct professor at INSEAD, with assistance from the coders Peggy Lam and Onorina Buneanu and the data consultants Morand Studer and Daniel Bernardes of Eleven Strategy. The team gathered each company’s daily financial data, as compiled by Datastream and Worldscope, from the CEO’s first day on the job until April 30, 2019. (For the handful of CEOs who took office before 1995, we calculated returns using a start date of January 1, 1995, because prior industry-adjusted returns were unavailable.) We then calculated three metrics for each CEO’s tenure: the total shareholder return (including dividends reinvested) adjusted by country to offset any increase in return attributable merely to an improvement in the local stock market; the TSR adjusted by industry to offset any increase resulting from rising fortunes in the overall industry; and change in market capitalization (adjusted for dividends, share issues, and share repurchases), measured in inflation-adjusted U.S. dollars. We then ranked each CEO—from 1 (best) to 883 (worst)—on each financial metric and averaged the three rankings to obtain an overall financial rank. Incorporating three metrics is a balanced and robust approach: While country-adjusted and industry-adjusted returns risk being skewed toward smaller companies (it’s easier to get large returns if you start from a small base), the change in market capitalization is skewed toward larger companies. To measure performance on nonfinancial issues, HBR consulted with Sustainalytics, a leading provider of environmental, social, and governance (ESG) research and analytics that works primarily with financial institutions and asset managers. We also used CSRHub, which collects, aggregates, and normalizes more than 600 ESG data sources, including eight data sets from leading ESG research firms, and works mainly with companies that want to improve their ESG performance. We computed one ESG rank using Sustainalytics ratings and one using CSRHub ratings for every company in our data set. To calculate the final ranking, we combined the overall financial ranking (weighted at 70%) and the two ESG rankings (weighted at 15% each). HBR’s list of best-performing CEOs was conceived by Morten T. Hansen, Herminia Ibarra, and Urs Peyer. Previous rankings were published in HBR in 2010, 2013, and each year since, but the methodology has changed several times during that span. Download the Data Behind the Ranking The change in ESG weighting did create one casualty: Amazon CEO Jeff Bezos. On the basis of financial performance alone, Bezos has been the top CEO every year since 2014. However, he failed to make this year’s list owing to Amazon’s relatively low ESG scores. According to Sustainalytics, one of two ESG data firms that assist HBR with its ranking, those scores reflect risks created by working conditions and employment policies, data security, and antitrust issues. As in past years, women are underrepresented among the 100 leaders. The 2019 list does bring a small measure of good news, however: Four female CEOs made the ranking (all are in the top half), up from three in 2018 and just two in prior years. Each year when HBR publishes this list, some readers protest the paucity of women; each year we respond by saying it’s the result not of the performance of female CEOs but of how few women serve in the role—a phenomenon we, too, find regrettable. On average, they became CEO at age 45 and have been in office 15 years. 4 are women, up from 3 last year. 86 are insiders, unchanged from last year. The CEOs who appear in this year’s list display remarkable longevity—and illustrate how happy boards are to allow a high-performing leader to stay in the job for many years. The CEOs of the S&P 500 have an average tenure of 7.2 years; in comparison, HBR’s best-performing CEOs have been in the job 15 years, on average. (Our methodology, which excludes CEOs with less than two years’ tenure, may be a factor in why that number is so high.) The articles that accompany the ranking examine this long tenure through different lenses. In “The CEO Life Cycle,” the recruiting firm Spencer Stuart discusses the results of a data-driven study that reveals a common pattern in how CEOs perform according to their tenure. Among its findings: Those who perform well enough to survive into their second decade on the job tend to experience a period of above-average performance—something many of the CEOs on HBR’s list are currently enjoying. And in “The CEO’s Guide to Retirement,” Bill George, a Harvard Business School professor who spent a decade as the CEO of Medtronic, argues that many CEOs linger too long because they can’t find the right time to retire and can’t conceive of what they’ll do next. He offers a road map for approaching both questions. For now, however, investors in the companies whose CEOs rank this year will hope that Huang and the others stay in place—and keep right on performing.

The CEO Life Cycle

Carl De Torres T he executives who appear on Harvard Business Review’s 2019 list of best-performing CEOs in the world show remarkable longevity in their roles: The average honoree has been CEO for 15 years, more than double the S&P 500 average in 2017 of 7.2 years. All these people have created tremendous value during their careers—but like most other CEOs, many have experienced short-term ebbs and flows in performance. For boards, that can create a quandary: How to tell when a CEO is suffering from a negative blip versus a longer-term problem, and how to react? These CEOs’ stellar career numbers can create another issue: How does a board know when it’s time for a high-achieving leader to step down? Very little data exists on how CEOs tend to perform over time; CEOs, directors, and investors often fill the knowledge vacuum with anecdotes, assumptions, and rules of thumb. For instance, when we asked CEOs about the ideal tenure for the role, many mentioned the widely touted seven-year average. When we surveyed directors, they said that CEOs generally should leave the job after 9.5 years—a point at which, many believe, performance typically plateaus. Why these expectations? No one has a compelling or evidence-based answer. They are simply conventional wisdom. To better understand the typical course of value creation over a leader’s tenure, we launched what we call the CEO Life Cycle Project. Our team of researchers tracked year-by-year financial performance over the complete tenures of 747 S&P 500 chief executives and conducted 41 in-depth interviews with CEOs and directors about their experiences. The study reveals a surprising pattern of headwinds and tailwinds that CEOs are likely to face during their years in the role and upends some common views about CEO tenure and value creation. For example, it suggests that some boards part ways with a strong CEO too early after a predictable and often temporary performance slump, while others tolerate a mediocre performer for too long. Our Methodology We analyzed the entire tenures of 747 S&P 500 CEOs who left office from 2004 to 2017. Their time in the role ranged from three months to 41 years. We first calculated each company’s annual market-adjusted total shareholder return (the difference between the company’s TSR and the S&P 500 TSR) for each year in a CEO’s tenure. That produced 7,000 discrete performance observations, which we used to create an average baseline representing how CEOs fare each year, regardless of market environment. Next we standardized the data for easier comparison. Instead of typical time-based comparisons, which would look at how various CEOs performed in a specific calendar year, we examined CEO performance on the basis of years in office. For example, instead of comparing how all CEOs performed in 2012, we looked at how each one performed in the first year on the job, in the second year, and in the following three stages. This way we not only randomized market effects and industry trends but also could compare CEOs who were operating in different slices of time. To rule out alternative explanations for the performance differences we observed, we examined organizational and individual data that might have had a material effect, such as the decade in which the CEO started, the industry, prior CEO or board experience, age at start date, gender, founder status or IPOs, revenue and income changes, capital expenditures, market cap, and extraordinary events like the global financial crisis. We included these inputs in multilevel statistical models to discover how variables affected performance and to confirm that our results still held. After analyzing the data, we conducted 41 interviews with high-performing CEOs in our data set and board directors who observed those CEOs to understand how leaders and boards think and talk about performance, tenure, and the critical moments and milestones in a CEO’s career. Understanding this pattern—and the critical moments when performance tends to shift—will enable a new dialogue between boards and CEOs. Recognizing the typical stages of value creation can empower boards to drive accountability, support CEOs at each stage in the best possible ways, and think about the sustained success of the organization. For CEOs this framework can help build trust and transparency with directors, manage expectations, adapt to the changing context of their tenure, and assess, as one CEO told us, “the incredibly difficult question of ‘Are you still the right one for the task ahead?’” Rarely do any two CEO tenures look alike. Each leader is on his or her own journey and faces very specific circumstances. Still, by comparing CEO performance on the basis of years in office rather than calendar years, and by viewing a composite of individual journeys, we have identified five distinct stages of value creation that many CEOs will experience during their tenure. Year 1: The Honeymoon Most CEOs achieve above-average performance in their first year. They enter the job with fully charged batteries, ready to take the lead. “In most cases, the person has longed for the job and has given thought to how they would operate and energize the organization,” one director told us. Enthusiasm for change lifts the stock price and unites investors, the board, and the organization. During the honeymoon, CEOs learn to deal with competing priorities, decide where to focus their attention, and determine which stakeholders deserve a portion of their limited time. The key differentiator for later success is how much the new CEO learns versus merely operates. With so many demands on his or her time and attention, it can be easy to get stuck in execution mode. Actively developing the ability to step back, reflect, and recalibrate in view of early experiences expands a CEO’s tool kit, improves pattern recognition, and increases speed to action. Most new CEOs find themselves on one end of the organizational-health spectrum as they enter the role. Either they inherited an enterprise with sound operations and a defined strategic direction or they’re now in charge of one in crisis, requiring a turnaround. For CEOs in healthy companies, less is more; the initial goal is to continue along an established path. Those inheriting a crisis take bold action instead. Though their approaches differ, both groups tend to experience a honeymoon, with optimism fueling above-average share performance. Looking back at this period, some CEOs recognize that great financial results in their first year may have set an unrealistically high bar, potentially sowing the seeds for problems during the next stage. One chief executive recalled, “The stock overshot. You get momentum investors. But the CEO can’t go out and say, ‘You know what? The stock’s too high.’ The reality of performance hit, and we underperformed [in our second year].” Year 2: The Sophomore Slump After the exuberance of the honeymoon, the pendulum typically swings the other way, often driven more by unmet expectations than by significant problems. In some cases, an unanticipated challenge will garner more negative attention from investors than it deserves. As one CEO put it, “Somewhere in the first 12 to 18 months you are going to run into a buzz saw.” CEOs should recognize the frequency of sophomore slumps and manage expectations about a potential slowdown. “Even when you think you’re communicating too much, you’re probably not communicating enough,” one director said. CEOs and boards can turn this early period of underperformance into an opportunity to work closely together, further refine strategic direction, and—most important—build trust and reset where necessary. When they recognize that they’re in this stage, directors are more likely to remain calm, support the agreed-upon direction, and not encourage management to take action for action’s sake. However, a large performance dip during which the CEO and the board cannot sufficiently align may set the stage for future trouble. Our data shows that CEOs who experience a deep sophomore slump are significantly more likely to be ousted in later years. How can boards tell if a CEO is experiencing a blip versus a longer-term problem? High-performing CEOs told us that full transparency with the board, the leadership team, and investors helped them navigate the second year. They gathered valuable feedback and proactively sought one-on-one conversations to increase buy-in. Because of these trust-building actions, much of the early goodwill persisted, even as performance lagged. Boards should ask critical questions during this period, but they should do so constructively and supportively. A dialogue will help bring expectations—both positive and negative—closer in line with reality. Years 3 to 5: The Recovery If they survive the sophomore slump, most CEOs enter a period of favorable tailwinds. Their moves in the first two years begin paying off. The board has had a front-row seat for the CEO’s handling of the slump; investors can see positive outcomes and signal support. “You gained the trust of your team and coalesced by facing a crisis together,” one CEO told us. CEOs in this stage are working hard for the future. By now their imprint is all over the organization: The strategic direction is set, the organizational culture continues to evolve, and positive board dynamics have been established. For some CEOs this is an ideal time to pursue M&A opportunities. It’s also when they experiment with ideas and plant the seeds for new initiatives, whether in R&D, product cycles, or capabilities to advance the strategy—often under the radar of other stakeholders. This is a period, said one CEO, when “your actions and the amount of work are not reflected instantaneously in performance and may be punished by the market in the short term.” By now the CEO should have enough experience to deal with that disconnect. CEOs who have not thoroughly recovered from the sophomore slump can find themselves under growing pressure from the board. As one director told us, “It’s in the third or fourth year when the board starts asking the really hard questions.” Some CEOs who had come under pressure during this period told us they wished they had spent more time with directors outside the boardroom early on to build strong relationships. Many successful CEOs had done so, often going out of their way to meet with individual directors while traveling. Toward the end of this stage, CEOs risk developing a blind spot. Confidence can turn into overconfidence, particularly if they’ve had several years of high performance. Some become restless. They may miss the frequent promotions and job changes they experienced on their path to the role—or recognize the strain on their lives and their families. Others start to focus on legacy-related questions; they think and talk about purpose. Some think about how long big investments will take to pay off and hesitate to put a lot of time and effort into a bet that might not be profitable until after they’re gone. Years 6 to 10: The Complacency Trap The recovery period is often followed by a time of prolonged stagnation and mediocre results. Performance may not be outright negative (and in some cases may be camouflaged by a rising market), but CEOs tend to struggle to deliver at the level of earlier years. One strong year may be followed by a couple of weaker ones. Unsure of whether a poor year signals major problems on the horizon, some boards delay intervening, whereas others act quickly to remove a CEO. Many CEOs in our data set left during this period, as you’d expect given the average tenure. As CEOs enter this stage, the risk of complacency is high—at the CEO, board, and organizational levels. Now that they’re sitting firm in the saddle, some relax their grip. Some become overinvolved in outside activities—boards, speeches, charities—and are distracted from work. After several years in the top position, maintaining personal energy and keeping up with a fast-changing world are taking a toll. Several directors pointed to an incrementalism trap in which CEOs start to think about success less daringly or resist taking a hard look at their past decisions. In the early days, they were making changes to their predecessors’ decisions; now they need to revisit their own and admit when they’ve run their course. That can be more difficult. CEOs who outperform in this stage recognize the need for reinvention. They stay focused on the business and continue to question the status quo. “Complacency was my biggest concern,” one told us. “Inside the company, people started to assume that we were going to deliver great results….I had to say, ‘No, we’ve got to keep finding new ways of doing things.’” In contrast, some leaders adopt an “If it ain’t broke, don’t fix it” mentality and fail to sufficiently rethink strategy. Even when the CEO recognizes the need to pivot, inertia on the board can slow or prevent change. Uncertainty about what and how to change can drag out the process, perhaps until it’s too late. One director observed that many CEOs “get defensive when performance starts to dip, which doesn’t serve them well.” Instead they should look for new opportunities for the company. Some CEOs and directors describe this as a period of delayed gratification, when they willingly forgo short-term gains for long-term bets. These transformation efforts have the potential to reshape the organization, often with far-reaching effects on the business model. But pressure for short-term gains may continue to build, requiring CEOs and directors to stay closely aligned on the vision and the time frame. Delays in M&A activity or the product development cycle, longer-than-anticipated integration periods, or missed synergy targets add further pressure, temporarily dragging down TSR and distracting from potentially big payouts from a successful transformation. One CEO told us, “It is a painful period when product A is starting to decline but you can’t talk about product B that will succeed it. You know there’s a great story to tell; you just can’t tell it yet.” The Five Stages of CEO Value Creation A team of researchers at Spencer Stuart tracked year-by-year financial performance over the complete tenures of 747 S&P 500 CEOs and conducted in-depth interviews with some of them to illuminate the pattern of stages below. For boards, the onset of the complacency trap presents a crucial question: Is our CEO a sprinter or a marathoner? Directors grapple with whether to bring in someone new or commit to a long-term vision with the incumbent. Our data shows that performance often spikes in the year of a significant event—a major acquisition, a technological innovation, a transition in a product cycle, a geographic expansion—with depressed returns in the preceding or following years. The board may begin to wonder whether the CEO is simply running out of ideas. One director said, “Some people have a clear view of how to steer the ship in the early years. I won’t call them one-trick ponies, but they do then struggle in their second act.” Even if directors begin mulling a leadership change, they tend to be hesitant. “The downside of a change in CEO seems huge to a board,” said one director. Our data suggests that boards should act decisively: Either accelerate the succession or protect the CEO from outside pressure. Years 11 to 15: The Golden Years CEOs who survive the complacency trap typically go on to experience some of their best value-creating years. Their long-term commitment and ability to reinvent themselves and the company are coming to fruition. Some CEOs described a flywheel effect: Projects and investments that produced no results early on were finally paying off. By now boards’ additional trust in their CEOs has proved to be warranted. The CEOs have gained deep institutional knowledge, led through business cycles, and mastered several crises. The likelihood that one good year will be followed by another steadily increases. These CEOs have learned to navigate complex multi-stakeholder situations. “When you survive into the golden years, it means that…you have not only managed the company well, but managed your board well, managed stakeholders, anyone who could call into question your continuing survival at the top,” said one CEO. Many of the long-tenured CEOs we interviewed were motivated by the idea of building a legacy. Their performance is explained in part by our sample. Most CEOs have dropped out of the race by this stage, whether for performance, health, or personal reasons, so it’s the strongest leaders who stay longer than a decade. Indeed, when we have shared our data, some observers have questioned whether the outperformance of the golden years is due solely to this survival bias—the fact that weaker leaders were weeded out earlier. But our research shows other factors at play. When we investigated attrition rates in our data, we saw CEOs leaving the job in consistent numbers year in and year out. If attrition alone explained the ups and downs, we would see corresponding movements in attrition and performance. Additionally, those CEOs who lasted into a second decade show a similar pattern of highs and lows over their tenure. Their survival wasn’t simply a function of their performance; the credibility and trust they built with the board and investors helped them stay the course in challenging years. CEOs who survive the complacency trap often then have some of their best years. In this stage the timing of succession becomes a key question for boards and CEOs. High-performing CEOs often have more discretion about when to step down. “If you’re successful for 10 years or so, it’s very hard for board members to look you in the eye and say, ‘You ought to go,’” said one CEO. “So you could stick around a long time and yet not be doing your job as well as somebody else could. I wanted to leave on a high note.” Although companies and investors benefit from having a high-performing, long-term CEO, it can complicate succession planning. A recent PwC study confirmed our findings that long-serving CEOs outperform others, yet succeeding a legendary CEO disproportionately results in underperformance and potential removal from office. CONCLUSION Corporate boards are under more pressure than ever before. Activist shareholders have become adept at exerting outsize influence and keeping directors on their toes. Index funds, which can’t sell shares when they are unhappy with a company’s leadership or governance, increasingly use their influence to hold boards accountable for CEO performance. This external pressure raises the odds of adversarial dynamics between CEOs and directors, leaving many CEOs feeling unsupported and misunderstood. Boards’ own view of their role has also expanded: Many now seek to add value to the most important decisions facing the company, ranging from strategy to talent and culture. Our framework gives executives and directors a common language for candid conversations about potential risks and opportunities at each stage. It can help boards view performance in a larger context and avoid overreacting in moments of doubt—or tolerating mediocrity for too long. It can also help them collaborate on succession planning and identify an optimal moment for the leader to step down.

The CEO’s Guide to Retirement

Carl De Torres When Lloyd Blankfein was preparing to retire as chairman and CEO of Goldman Sachs on October 1, 2018, he wrote a poignant letter to employees that captured his ambivalence about stepping down. “It’s always been hard for me to imagine leaving,” wrote Blankfein, who had just turned 64. “When times are tougher, you can’t leave. And when times are better, you don’t want to leave. Today, I don’t want to retire from Goldman Sachs, but…it feels like the right time.” Getting this timing right is an essential part of a CEO’s job—and it’s more difficult than it appears. For leaders who have spent decades working to reach the pinnacle of their careers—with all the power, perks, and prestige that come with the role—retiring can be a scary, almost existential prospect. Their self-worth is often connected to their work, and the questions they face go to the heart of their self-image: How can I remain vital and relevant? Will people still respect me without my title? Where should I live now that I’m not tied to headquarters? How will I fill my days? Without an organization to lead, how can I continue to make a difference in the world? While CEOs are working 70-to-80-hour weeks, it is impossible to consider these questions with clarity or to explore what might be possible or fulfilling after they retire. Giving up their jobs feels like stepping off a cliff. Without answers, many CEOs default to remaining too long in the job. Yet by doing so, they may imperil their legacies and their companies. I have spent more than 25 years grappling with these issues—and helping others reflect on them. In 2001, at age 58, I left the CEO job at Medtronic after having served 10 years—a term limit I’d established when I assumed the role. At Harvard Business School, where I teach courses to CEOs, we talk extensively about the arc of a leader’s tenure, finding the right time to exit, and reconstructing one’s professional and personal life after leaving the job. As a board member of numerous organizations, I have been directly involved in counseling CEOs as they devise their exit strategies and postretirement plans. Apart from my board work, I have served as an informal counselor to more than two dozen chief executives who’ve reached out to me when they faced this turning point. In these conversations I encourage CEOs to leave while they are on top, rather than wait too long and risk being forced out by their boards when the business is not doing well. CEOs who refuse to retire make their boards’ job much more difficult. Without a clear timetable, grooming internal successors and following an orderly succession process become challenging. By stepping aside at the appropriate moment, a CEO can create time and space for reflection before making new commitments. With people living into their eighties and nineties, the options are numerous. For a vivid example of the problems caused by a CEO who fails to step down at the right moment, look at General Electric. In 2017, when the GE board forced Jeff Immelt to resign after 16 years, it appointed an internal candidate, John Flannery, as CEO. The timing was terrible: Flannery spent a year trying to clean up the messes he had inherited (which included an ill-advised acquisition and an accounting scandal) before the board lost patience, fired him, and persuaded its newest board member, Larry Culp, to become CEO. Culp now faces a daunting turnaround. During Immelt’s too-long tenure, GE shareholder value declined 73% while that of its peers in the Dow Jones Industrial Average increased 179%. There was a time when business schools studied GE as a model for CEO succession. Now it’s being taught as a case study in how not to handle the process, largely because of Immelt’s failure to properly time his exit. Although CEOs inhabit a rarefied realm, variations on this decision—When should I retire, and what should I do next?—apply to professionals at all levels. This article focuses on the unique circumstances facing CEOs, but parts of the process I suggest are useful to anyone entering the final laps of a career. Get the Timing Right Thinking about when to begin and how to spend a long retirement is a relatively new problem. A generation ago, when most people died in their late sixties or early seventies, the answer was simple: retire and move to Florida for warm weather and daily golf. Today, when many people live well into their eighties and nineties, retirement may last for decades, so deciding what to do is more complex, with a wider range of exciting options available. In his theory of psychosocial development, Erik Erikson described the stage humans reach in late midlife as they approach retirement age and face a choice between generativity and stagnation. Generativity involves spreading your knowledge and wisdom across many people and organizations while actively continuing to learn. In contrast, stagnation occurs when leaders retire altogether and are left with no way to contribute, so they feel disconnected from their communities and society. In my experience, when thinking about the right time for a CEO to retire, tenure in the job is a more important variable than age. It’s rare to find an organization that performs better after a CEO has been in the role more than 10 to 12 years. There are exceptions, of course, including the companies whose long-tenured executives appear in HBR’s best-performing CEOs ranking (some of them company founders, whose role in creating the firm and large ownership stake create power and succession dynamics different from those facing most CEOs). In general, nonfounder CEOs should avoid too-lengthy tenures for several reasons. Being CEO is an extremely demanding, travel-intensive job that requires great creativity, energy, tenacity, and resilience, and leaders often have a hard time sustaining those qualities for more than a decade. The strategies the CEO put in place may simply run out of gas, and the company will require new leadership to implement a strategic transformation. Not wanting to post poor bottom-line results, some long-tenured CEOs make decisions aimed at maintaining near-term results; thus they fail to make the bold investments required to drive long-term growth. Other CEOs display the opposite behavior: Late in their tenure they make a large acquisition in an effort to avoid a growth slowdown—but in so doing, they create complexity that the board is reluctant to hand over to an inexperienced successor. Take a personal inventory of your life, your career, and your time as CEO. Do you still find fulfillment and joy in the job? Do you feel the passion, energy, and excitement you once did? Are you still learning and feeling challenged?

Do you have personal reasons to leave earlier than planned? Is your partner eager to start a new phase of life with you? Do you have family or health issues that may cause you to leave sooner than expected?

Are you facing an unexpected career opportunity that won’t come around again? Former Goldman Sachs CEO Hank Paulson wasn’t planning to leave his role but felt compelled to accept President George W. Bush’s appeal to become U.S. treasury secretary.

How is succession shaping up? If you have multiple internal candidates, how old are they relative to you? If you stay longer, will your successor still be young enough to have a long run in the job? Alternatively, is your successor prepared to be CEO right now and possibly unwilling to wait around if your timetable is uncertain? That situation confirmed the timing of my exit from Medtronic after 10 years: My successor, Art Collins, was only five and a half years younger than I and was ready to be CEO. If I had chosen to stay longer, he most likely would have taken a CEO position elsewhere.

At the other extreme, is your planned successor not ready or running into some difficulties? In that case you may have to extend your tenure so that other candidates can be prepared. Former Merck CEO Roy Vagelos encountered such a situation when his designated successor violated the company’s code of conduct and the board asked Vagelos to stay until it could complete an external search.

Are there company-specific milestones you want to achieve before you depart, such as the integration of a major acquisition, the launch of an important new product, or the completion of a long-running project? John Noseworthy remained in his role as Mayo Clinic CEO until the IT team finished implementing a very complex technology infrastructure system.

Is your industry changing so dramatically that your company would benefit from a fresh perspective? After eight years as the CEO of Novartis, Joe Jimenez handed over the reins to Vas Narasimhan to lead the pharmaceutical company’s push into emerging gene and cell-based therapies.

Does your company have a mandatory retirement age? Not long ago, most companies did (typically 65), but many have dropped it as health and longevity have improved. Today when a board has a high-performing CEO who wants to continue, the directors are often willing to eliminate a mandatory retirement policy. At Ford, where CEOs traditionally retired at 65, the board asked Alan Mulally to stay until just before he turned 69. Merck recently changed its policy to extend Ken Frazier’s tenure as chief executive after he turns 65. Mandatory retirement policies can be useful for forcing out leaders who are reluctant to step aside, but boards should recognize that age 65 is arbitrary and that flexibility may be in the company’s best interest. As Blankfein pointed out, there is no perfect time for a CEO to leave. To avoid staying too long, CEOs should regularly work through these questions, which are designed to identify when to exit: The relevance of these questions will vary in each CEO’s case, but taken together, they provide an important list of issues that leaders should contemplate in deciding when it’s best to move on. Craft Your Next Act Slowly and Deliberately One reason CEOs hold on too long is that they can’t imagine what comes next. This is shortsighted. Today former CEOs have myriad opportunities to continue to lead and make meaningful contributions. Whether they choose to serve on corporate and nonprofit boards, teach, write books, get involved in nonprofit organizations, join a private equity firm, create a foundation, serve in government, or mentor emerging leaders, many former CEOs find that this period of generativity is very fulfilling. Leaders who construct a satisfying post-CEO life often develop a positive reputation—and, in my experience, seem more content. An example is Steve Reinemund, who served as CEO at PepsiCo from 2001 to 2006. During that time he set the standard for values-centered leadership, grew revenue and market capitalization, and diversified PepsiCo’s management. At age 58 Reinemund stepped down to focus on his family’s needs, making way for Indra Nooyi to succeed him. After retiring he spent six years as the dean of Wake Forest’s business school, giving it a focus on values and ethics. In addition, he has served on the boards of Johnson & Johnson, American Express, ExxonMobil, Walmart, and Marriott, where he has been a strong advocate for values, ethics, and diversity. When I discuss retirement with CEOs, I suggest this step-by-step approach: 1. Finish strong and go out on top. Many CEOs worry that they will become lame ducks as soon as their succession timetable is clear. I disagree. You are in charge until the last day, and you should finish your tenure on a high note. As Ecolab CEO Doug Baker puts it, “Run through the finish line.” By staying fully engaged, outgoing CEOs give their successors time to plan their own agendas without the pressures of daily business. That is precisely what John Noseworthy did as Mayo Clinic’s CEO: He gave the board nine months’ notice to select and prepare a successor while continuing to build Mayo’s medical business and leaving the financials in great shape when he retired, on December 31, 2018. During that time his successor, Gianrico Farrugia, was developing an agenda and organizing his top team. 2. Meet with a career coach or a therapist a year in advance. When leaving Medtronic, I had fears about losing relevance, not having a platform, or lacking meaning in my life. So I went back to a therapist I had seen years before and talked those issues through. In addition to exploring my fears, the discussions enabled me to envision what my new life might look like and what my options might be. Recognizing that I didn’t want to take on another full-time role gave me the freedom to explore many other things that life has to offer. I still had no idea how I would feel or what I might do when I left, but I was better prepared to cope with the unknown. After I left the job, I spent two years figuring out my next steps while teaching for 18 months as a visiting professor at two Swiss universities. By staying fully engaged, outgoing CEOs give their successors time to plan ahead. 3. If you’re married, talk through the transition with your spouse. Ask questions such as What would give us the greatest satisfaction? Where will we find fulfillment? Where would we like to live and spend time? What hobbies haven’t we had time to explore? Is there a bucket list of activities—such as living in another country—that my being CEO has prevented us from pursuing? My wife, Penny, and I met with a counselor six months before I left Medtronic to discuss those issues, and we were able to address the different stages we were at in our careers. 4. Say your goodbyes and make a clean break. In the months before you leave, make in-person visits to secure your relationships with key people, your employees, and customers. When your time is up, don’t hang around the C-suite. Move your office to a new location—preferably away from headquarters, but definitely far from the executive wing. I suggest that former CEOs go back to the company only when specifically invited by the new CEO. 5. Take six to 12 months to explore your options before making any firm commitments. Extended time away gives leaders a tabula rasa so that they can think clearly about what comes next. After I left Medtronic, Penny and I rented a villa in Provence and had visits from family and friends—something I had wanted to do previously, but then I couldn’t afford the time away from the company. During this exploration phase, don’t make any firm commitments. The first opportunities that come along may not be the best options, but some leaders accept them out of fear that they won’t be able to fill their time. They may want to retain a title and a business card and to let colleagues know they are still active. Be careful with smaller commitments, too; they can fragment your schedule and prevent you from taking extended vacations or being available for other, higher priorities. This new stage of exploration and saying “not yet” to emerging opportunities may be uncomfortable, but living with the discomfort will help you choose your next step wisely. 6. Make your decisions and move ahead. When you’re ready to take on new roles and activities, be flexible about your time obligations, knowing that these commitments are not forever. Then dive in 100% to learn everything you can and contribute as if you will be there the rest of your life. Weighing All the Options Beyond needing a process for weighing options, many retiring CEOs want to talk specifically about the pros and cons of the options they have. Here are the most common ones: Serve on corporate boards. These days most active CEOs are restricted by their own boards to serving on a single outside board; but once they step aside, they can make vital contributions to multiple organizations. For this reason, recently retired CEOs are very much in demand as directors. Former DuPont CEO Ellen Kullman is an example: She sits on the boards of Amgen, Carbon, United Technologies, and Goldman Sachs (as a colleague of mine), where she shows a knack for digging deep into the details and asking important questions. Serving on boards enables you to stay engaged in the important issues companies are confronting and to develop new professional colleagues. But be aware of the time investment boards can require, especially during crises, because that may constrain your other activities. Teach. As I have learned, teaching MBA candidates and executives can be both rewarding and intellectually challenging, forcing you to remain sharp enough to keep up with your students and to understand the motivations and philosophies of a younger generation. You gain entry to the very different world of academia, with all its intellectual stimulation but also its bureaucratic frustrations. Teaching should not be entered into lightly, because doing it well takes an enormous amount of time. Many retired CEOs find it worth the investment. It has enabled me to fulfill a passion to help authentic leaders develop their capabilities. Coaching the next generation of leaders can be a satisfying way of giving back. Write books. Many retired CEOs write books. Several of these, such as those from Aetna’s Ron Williams (Learning to Lead), Campbell Soup’s Doug Conant (Touchpoints, with Mette Norgaard), Bridgewater’s Ray Dalio (Principles), and Baxter’s Harry Kraemer (Becoming the Best and From Values to Action), have been especially helpful to emerging leaders. Although writing can be very satisfying, it’s important to wait at least a year after retirement so that you can gain perspective and write about more than your experience at a single company. Lead nonprofit organizations. Serving on the boards of nonprofits can be especially gratifying. Some executives even take full-time leadership roles there. For instance, following a successful career as the CEO of U.S. Bancorp, Richard Davis became the chief executive of Make-A-Wish Foundation, in Phoenix, while also serving on the boards of Mayo Clinic and Twin Cities YMCA. But be warned: Although nonprofit leadership is personally rewarding, it can be just as demanding as being the CEO of a for-profit company. Join a private equity firm. The rapid growth of the private equity sector has created a real need for executives with strong operating experience who can bring fresh eyes to the often-troubled companies in PE portfolios. A good example is Harry Kraemer, an executive partner with Madison Dearborn. Kraemer is positive about his experiences; however, several former CEOs have confided to me their disappointment in private equity. They feel that they were promised more responsibility than was delivered and that the firms were simply using their names for prestige. Create a foundation. Many CEOs who accumulate significant wealth over the course of their careers decide to establish a foundation to achieve wider influence on important issues. That’s what former IBM CEO Sam Palmisano did when he established the Center for Global Enterprise (CGE) at Rockefeller University in New York. At IBM, Palmisano developed his theories regarding globally integrated organizations. In creating CGE, he was able to engage with scholars to deepen those ideas and put them into practice. Penny and I used Medtronic stock to create the George Family Foundation, which she chairs, focused on integrated health and healing and authentic leadership. We have found it enormously rewarding to support nonprofit organizations doing important work, but it can be challenging to realize the outcomes you desire. Serve in government. Many former CEOs have moved into government service, whether by appointment or by seeking elective office. My Harvard Business School classmate Michael Bloomberg is a superb example: He served three terms as mayor of New York City and remains an important voice on a range of social and political issues. In the right circumstances, serving in government can be fulfilling, create meaning, and burnish one’s legacy. In the wrong ones it can be deeply frustrating, as former ExxonMobil CEO Rex Tillerson learned during his 14 months as U.S. secretary of state—when he often found himself at odds with President Trump. Mentor leaders. In the past decade rising executives have sought out coaching and mentoring opportunities, and many people recognize that former CEOs make very thoughtful coaches. Coaching the next generation of leaders can be a satisfying way of giving back. Former Novartis CEO Dan Vasella travels the world coaching CEOs and running mentoring programs for leaders. Morgan Stanley’s John Mack finds great joy in coaching young entrepreneurs. The rewards of mentoring far exceed the investment of time required. CONCLUSION At a moment when authentic leaders are needed throughout society, it’s an enormous loss if former CEOs simply retire to warmer regions and make no attempt to help solve the world’s myriad problems. The possibilities listed above enable such experienced leaders to make very important contributions to society while still having time for family and friends, hobbies, and travel. Among the many former CEOs I know, the ones who are thriving have found ways to create or nurture things that will outlast them. Their generative approach to their later years brings them a sense of well-being—and helps improve the world.