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Life After CEO
Losing the top job often means a tough climb back

BY: MICHAEL STERN Dec. 6, 2004

Just a few years ago, he was the toast of his industry: a dynamic new CEO running a fast-moving public company that seemed about to revolutionize its sector. Sadly, that organization never lived up to its billing. Rapidly changing markets and the tech meltdown forced numerous revisions to the business plan. The company still exists today, but it's clearly an also-ran in its market.

And the CEO? Mark (not his real name) moved on. He became CEO of a smaller public company for a few years, but that job never really jelled. Mark now heads up a division of a mid-size private business that he describes as "small but growing."

Mark had two good kicks at the CEO job. Unfortunately, it was during a time of wrenching change, when even dominant companies in his industry collapsed and restructured. When he moved on from his second post, he had to face facts: he was too young to retire, but no one was lining up to offer him another CEO position. Which explains why he is now heading up new projects for a firm led by an innovative entrepreneur 20 years his junior. "It's the next big thing," he'll say, if you ever get him to talk about his career arc.

Mark had a rough time, to be sure, and no one will ever know whether his tenure would have proved more fruitful if it had occurred a few years earlier (or later). But he's still in there pitching. He survived the brutal setback that has derailed many once flourishing careers. Still, the questions remain: What do you do after you've been CEO? Can you ever go work for someone else again?

As an executive search consultant, I have interviewed hundreds of CEOs and senior executives across Canada. In my experience, few people ever consider life after CEO. Those who are in the top spot now, or those gunning for it, tend to think of chief executive as an earned title they will bear until the day they retire. They never expect to have another job where they are not in charge.

All that may have been the case a few years ago, back when presidents and chairmen were appointed at age 60 as a reward for 35 years of diligent service. Being CEO was the last job you expected to have. These days, though, the corporate ladder has been replaced by the outside airlift. Companies are looking for new ideas and energetic leadership, which means they are hiring younger CEOs than ever before--and often from the outside. At the same time, their tolerance for failure is lower than ever, and the average tenure of a CEO is getting shorter all the time.

But you don't have to mess up to get bounced from the top job. One chief exec I know spent a period of time very successfully increasing his company's top and bottom lines. And he felt he could do even better if the company's owners would only agree to invest more back into the business. For years, he fought that losing battle. Then one day he made the mistake of venting his frustration to the press and he was immediately put out on the street. More importantly, there is the continuing threat of restructurings, mergers and acquisitions, which can unseat even successful executives at any time. All of which suggests that many CEOs today will someday be in Mark's position: contemplating a working career of 10 years or more after they have been used to life at the top. (If CEOs do lose the top job, through no fault of their own, there's one thing they should know. No matter how well they think they can "spin" the story of their departure, the grapevine always assumes the worst.)

When setbacks happen, some fortunate CEOs move right into another top job, never surrendering their title or prestige. For most, however, it's a tough climb back. Some ex-CEOs avoid dealing with this by jumping off the fast track altogether. They become self-employed consultants, providing valuable advice for a fee to former industry colleagues and, often, competitors. Best of all, they are still the person in charge--even if they work only 10 hours a week and their office is in the rec room.

In my opinion, it takes more guts to do what Mark has done--stay active in the business arena. He's still in pretty much the same sector, which means he often deals with former colleagues who are well aware of his reduction in rank. Mark's attitude, however, is always upbeat.

Other former top executives, reading the writing on the wall, undergo a remarkable conversion to social responsibility. One CEO I know made it big in the food business, then cashed in his shares at just the right time. Frank (we'll call him) took another CEO position, but it proved not quite as successful as the first. Today, in his mid-50s, he doesn't have to work; but he has no interest in sitting on a beach, either.

Since no one was offering him another C-level position at a quality company, Frank made the best of the situation: he announced publicly that he was through with building businesses. Now, he wanted to use his skills to "give back." As a result, offers came in from charities and other good causes, organizations in need of leadership that were happy to hire experienced talent if they didn't have to pay full price for it. The cultural institution Frank now works for represents a big step down, in size, prestige and payroll, from his previous employers. But he is still "CEO." And Frank now takes great pride in the improvements he has initiated by bringing new discipline into the organization and initiating a more focused approach to fundraising.

Frank isn't alone; I could name a half-dozen prominent business execs who are now running associations, foundations and charities. None of them had expected to be in the non-profit sector at this point in their careers. But sometimes change is good. For those who can afford the pay cut, there can be tremendous satisfaction, as Frank discovered, in enabling others to accomplish their goals, whether they be in the health sector, education, culture or sport.

And then there are the ex-CEOs who never really adjust to their circumstance. Some simply drop out of sight. Maybe they're happily running dynamic companies on the West Coast or somewhere in the States. More likely, most are working on their golf swings, investigating real estate in Florida and Arizona, and doing some industry consulting should the phone ever ring.

Some former CEOs enter transitional stages that can last for years. One executive I know lost his job as a result of an ownership change. Shaun got a good "package," so he wasn't starving--and he didn't have to take the first job offer that came along (although sometimes I'm not sure that's a good thing). So he hung around the fringes of the business community, showing up at industry conferences, parties and networking events, looking good and smiling broadly. If you asked what he was doing (and you never knew whether you should), he would talk about offers he was considering and deals he was involved in. But nothing lasting ever came of them. For someone who wanted to get back into the game, I think Shaun was too concerned about matching his old title, and gave too little consideration to the potential of the opportunities that did come his way.

For a while, Shaun also looked at buying a business. He was confident he had the right stuff to turn around a troubled situation. Like many executives in his situation, however, he never found an opportunity he liked at a price he was willing to pay. Over time, I could tell that Shaun was losing ground. After two or three years of languishing in ex-CEO limbo, he relocated suddenly to the Maritimes. I'm not sure what he's doing now. No one else seems to know either. In my circles, he has not surfaced again.

There's a clear lesson to be learned from these experiences. If you wait for the perfect job to come along, you may be sitting at home (or paying for your own tickets to industry conferences) for a long time. At some point you have to get off the fence and decide which is more important: regaining the title and prestige you lost, or getting on with your life and career.

Everyone has a best-before date. It varies from industry to industry, and of course everyone knows that CEO jobs don't come open every day. Still, as a recruiter, I can vouch that any senior job-seeker who has been on the shelf for half a year is starting to get stale. Beyond six months, potential employers start having doubts; if you're as good as you say you are, why hasn't someone else snapped you up?

Former executives need to have reasonable expectations. As Mark, above, learned, if there are any questions about why you left your last position, it will be very hard to find a post of equal stature at a company of equal size and prestige. Chances are, you will have to make a choice: pursue a comparable job at a lesser firm, or settle for a subordinate position at a comparable firm. This of course requires you to know your strengths, weaknesses and prospects. Are you better off as a smaller amphibian in a quality pond? Or do you go to the lesser company and work hard to bring it the same kind of success as your previous firm enjoyed?

In other words, how much confidence do you have in yourself? And how much do you miss the big chair?

For those who don't get any offers worth considering, owning a business represents a tempting course. But a franchise or a startup--where you are both CEO and chief bottle washer--are not for everyone. The lead time can be long, it will cost more than you expect, and you may be disappointed at the calibre of people you can afford to hire. They won't be the professionals you were surrounded by back on the top floor.

Consulting is small business without the risk--or the employees. Many find that marketing themselves is the hard part, but the rewards can be lucrative. I know one ex-CEO from the transportation industry who began driving fancy cars and taking exotic vacations only after he was fired from his corner-office job and became an industry consultant. I know that he still misses having a business to run and people reporting to him, but that extra cash can be quite a consolation prize.

After considering all the options, a CEO who decides to go for a lower-level job has one more hurdle to jump: convincing prospective employers that he or she is "over" being the boss. You have to persuade interviewers that you really want the job, that you're committed to rolling up your sleeves and doing the work, and that you're not just taking this gig until something better comes along.

When I'm interviewing executives who are considering a lesser position than they enjoyed before, I want to hear that they understand this problem. I'd expect them to say things such as "I know I've been the lead dog before, but I have a lot to learn in this company and I'm keen to do a good job." If I asked if they were expecting a quick promotion back to their previous level, I would want them to say something reassuring, such as, "Sure, but I understand that I have to earn my spurs here, and I'm prepared to work at this job for three or five years to prove my worth to the company."

If asked, there's nothing wrong with admitting that your adjustment to life after CEO has been awkward. Leaving the top job, even of your own volition, can create strong feelings of loss and letdown. Denying that will only raise eyebrows.

Execs who wish to stay in the game should have realistic goals. Even if your objective is to be CEO again, I find it's best to define your success in stages. You may not get your title back for a while. Maybe success for you, at first, will be to get your phone calls returned. Maybe success will be making it through to the second or third interview. If you stay focused on the process, gaining confidence from your incremental "wins," you may just have the inner strength, wisdom and vision to climb all the way back to the top.

Of course, the best way to avoid setbacks is to manage your career properly while you are safely employed. Some people join their industry associations only after they lose their jobs. The smart people join early and devote a set amount of time to associations, committees, industry conferences and other activities that increase the size of their networks.

One senior executive I know is a consummate networker. She's been out of a job since a U.S. outfit took over the entertainment company where she had worked for nine years. But she's not out of work. Because she had nurtured her personal contact base over the years, job offers came her way almost immediately. She's turned them down, preferring to wait for the right opportunity to come along. In the meantime, she has received so many projects and consulting assignments that she is turning some of them down, too, to create some time for her job hunt. Not a bad problem to have.

Making time to increase your network is good for your business, as it gives you a broader knowledge of the sector and more contacts. But it's also better for your career. Should you ever get the boot, it ensures you have a ready-made list of industry contacts who know you and what you can do. They will be useful for jobs, referrals and references, because they have seen your accomplishments and contributions up close and in person.

If you have to conduct a job search in mid-career, better to start from somewhere higher than the bottom rung of the ladder.