A retired CEO, Jerry was a sad, aging man who reflected constantly on the emptiness of his life. Listening to him, it became clear to me that he had never had any interests outside work. And the prospect of spending time at home with a partner who seemed to have turned into a stranger made him all the more depressed.
For people like Jerry the public recognition that accompanies a position at the top of an organization becomes the most meaningful dimension of their lives. Their life anchors are their identification with an institution of great power; influence over individuals, policies, finances, and the community; and constant affirmation of their importance as individuals and of their role as leaders.
With retirement, all these anchors disappear from one day to the next. The destabilizing effect is often exacerbated by a realization of what has been lost, or sacrificed, years earlier, on the way up to the top: a fulfilling personal life; a good relationship with a spouse, children, and friends; and time to develop outside contacts and interests. That’s one reason why many top executives delay retiring and cling to power for as long as they can.
Other hidden but potent psychological and emotional factors also conspire to make retirement difficult. To begin with, people usually attain top leadership positions just when the effects of aging become more noticeable. When top executives look in the mirror, the face frowning back at them from the mirror shows the ravages of age, unleashing a wave of negative emotions: fear, anxiety, grief, depression, and anger.
Self-consciousness about the deterioration of the body (a sense, almost, of being defective) can stimulate the search for substitutes for attractiveness and virility. For some people — and top executives are prime candidates, given the prestigious positions they occupy — wielding power is a gratifying substitute, becoming a replacement for lost looks. Small wonder that so many are reluctant to let go. If the power of office is the only thing they have left, they will hold onto that office as long as they can.
Another complicating factor for those faced with the prospect of relinquishing power is the talion principle. Derived from early Babylonian laws it states that criminals should receive the like-for-like punishment for injuries inflicted on their victims. Leadership involves making difficult decisions that affect the lives and happiness of others — positively, but also negatively. Because of their unconscious belief in the principle, leaders file all those decisions in a memory bank and, as the number of “victims” mounts, so does the expected retaliation. This makes them extremely defensive and provides another incentive not to retire.
It’s inevitable that top executives who have placed work at the center of their entire adult lives will be devastated when power dynamics shift and a named-but-not-yet-in-office successor begins to win converts to his or her very different dream for the future of the organization. Like an old lion they will lash out in an attempt to put ambitious ladder-climbers in their place. The wit who said the primary task of a CEO is to find his or her likely successor and kill the bastard had a point: that “bastard” stands to destroy the outgoing CEO’s most cherished dreams.
These fears are accentuated by the need all of us have to leave behind a legacy: leaving a reminder of one’s accomplishments can be equated symbolically with defeating death. Many top executives question whether their successors can be relied on to respect the monument that took them so long to build.
Most companies are woefully negligent in their understanding of the psychological dynamics of retirement. The default mode is simply to abandon people on the verge of retirement, giving them little or no help in preparing for such a critical life change. There is, I feel, an opportunity here. No one can stop executives from aging, but companies can give them a transition to retirement — and help themselves in the process.
The case of Ronald, former head of Asia of a global information technology firm, illustrates what companies can do. In this company, the VP for talent management had been very eager to offer special work arrangements for hard-to-replace, experienced executives approaching the mandatory retirement age.
With the support of the group CEO, she had introduced a flexible, phased retirement policy that allowed senior executives approaching normal retirement age to reduce the hours that they worked, or work for the organization in a different capacity after retirement. It gave retirees the opportunity to transition gradually, in contrast to the abrupt termination common in many companies.
In this instance, Ronald became a special advisor to the group CEO with a brief to help develop the company’s African markets. The arrangement not only helped the Group CEO to develop a strategy and organization for a fast-growing region, it gave space for both Ronald and his wife to experiment with non-workplace activities without having him leave the workplace altogether. What’s more, Ronald and his wife had always had a special interest in Africa, making Ronald’s ongoing work something both could engage in.
Arrangements like Ronald’s are win-wins for both companies and retirees. Given the damage that can be caused by a powerful executive’s struggle to retain power and remain relevant, managing slow retirements could be at least as important as onboarding new hires quickly.
Manfred F.R. Kets de Vries is the Distinguished Professor of Leadership Development and Organizational Change at INSEAD in France, Singapore, and Abu Dhabi. His most recent book is The Hedgehog Effect: The Secrets of Building High Performance Teams(Wiley, 2011).