Great Leaders Use Honesty to Help Their Successors

Harvard Business Review

Jack Ma, the founder and long-time CEO of Chinese web company, Alibaba, recently announced that he is stepping down as CEO, and now we have learned that Jonathan Lu Zhaoxi will become chief executive of the company in May. Alibaba is an incredible success story. The company began in 1999 and last year had estimated revenues of $40 billion. By comparison, after its first 13 years, Apple had revenues of $8.9 billion.

I admire Ma and believe that he is an amazing leader. Those who have worked with him are lucky — but the man or woman that follows him faces a challenge ahead. How do you succeed someone so revered?

CEO transition has become a routinized activity — companies bring in a well-known consulting firm and follow a checklist to identify and onboard a new leader. And, overall, I'd say that most transitions done this way — with good people and due diligence — deserve a "B" grade. But what's much more complicated, and harder to get right, is a transition when the CEO has grown to be larger-than-life. Like Ma. In these cases, it is up to the departing leader to help, in a way that only he (or she) can.

Ma knows this very well, and predicted his own quandary. He has written in an email to his employees: "Succeeding a founder CEO is a difficult job, especially taking over from a CEO with such a distinct personality...." Some might interpret this as the arrogance of a very successful man. Others might read it as the disarming honesty of a great leader (since the statement is, factually, 100% true). I've observed Ma and from what I know of him, I suspect the latter assessment is accurate: frank and open honesty, not chest pounding arrogance. And that brings us to a very important point.

We want the truth from our leaders. But we have become cynics, accustomed to twisted messages from politicians and company marketing communications so wordsmithed that they lack meaning. These things do not inspire us, or pull us toward someone in a leadership position, with an attitude of wanting to help. They do the opposite. Great leaders have the ability to surprise and reassure people with their direct and honest communication. This is an essential part of what makes them great. And it is especially important in times of big change and uncertainty — such as CEO transitions — where it can smooth the way for the incoming leader.

Will this be the case with Alibaba? I hope so. Ma has put reality on the table, stating clearly what the challenges are and what he wants, with the real authority that comes from his venerated position.

With Ma's endorsement, I expect Alibaba employees will rally around Lu Zhaoxi. They'll be less likely to sit back and wait for the new guy to prove himself, or to gossip continually about their new CEO as inferior. They will be more inclined to actively help, with some sense of urgency, around a huge challenge for the firm. And if they do — Alibaba competitors had better look out for them.

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