When Calvin McDonald, a former Loblaw executive, stepped into his new role as president and CEO of Sears Canada at the end of June, he was, in essence, completing the exit strategy of his predecessor. Dene Rogers, who held the top job at Sears since 2006, had told his board two years ago that he would be decamping with his family back to the United States once Sears weathered the recession and hired a management team that could take the business forward.
The newest twist in career management is to have an exit strategy—even before taking on a new assignment. Senior executives are even openly discussing their exit strategies with their employers.
That makes sense in a corporate landscape where the average lifespan of a chief executive is shrinking. According to an annual CEO turnover report by global management consulting firm Booz & Co., the average CEO tenure was 6.6 years in 2010, 18 months shorter than in 2000. For CEOs who come from outside the firm, the lifespan is even shorter, at 4.3 years versus an average 7.1 years for insiders. “Any prudent senior executive is thinking of an exit strategy,” says Louise Wilson, the Calgary-based director of PwC’s people and change practice.
Kelly Blair, a Toronto-based senior partner at executive search firm the Caldwell Partners International, prefers the term “career tactic” to “exit strategy,” but says more executives are thinking in terms of time lines, as well as end rewards, when evaluating new roles. “I’m seeing much more conscientious decisions being made around ‘I will take this on for this time line or this goal.'”
And executives are growing more comfortable discussing their plans with higher-ups. Denise Baker is the assistant dean at the Hari B. Varshney Business Career Centre at University of British Columbia’s Sauder School of Business. She notes that the higher the executive’s rank, the more open the person may be with the employer—”once I accomplish this, I will be moving on.” The younger generation is helping to make the corporate culture more open, she adds. “They want to have that discussion with their employer around career plans. And we say to employers, ‘If you don’t have that conversation, they will go.'”
Another way to think of an exit strategy, says Rob Mitchell, a professor at the Ivey School of Business at University of Western Ontario, is as a “harvest strategy.” “By thinking about what your goals are, it really drives your inputs and the processes you engage in,” he says. A harvest strategy sounds less negative, but it amounts to the same thing: having an end goal and developing the skills and experience needed to achieve it.
According to Paul Smith, a managing partner at executive recruiting firm Odgers Berndtson in Toronto, creating an exit strategy begins with asking yourself some questions: “How will I know when I’ve accomplished what I’ve set out to do? Have I taken the company to another level? Is there a good succession plan in place? What should I hope to gain in terms of experience, skills or rewards? How will this position me for the next step?”
With the company lifer no longer the norm, when is the ideal exit time? “There is no magic number,” says PwC’s Wilson. Putting in two to three years to execute a corporate transformation may be too short, while 10 years in one place may be too long, she says. “If you are in a role due to your technical expertise and that expertise becomes obsolete, you may find yourself without a portfolio. But if you are a good leader, you could grow with the company. It depends on how agile you are,” Wilson says.
Of course, having that strategy becomes especially useful if you wind up the one asked to leave. “I tell my undergrads they have a two-year window when they go into a firm and then they should be asking themselves, ‘Do I stick around?'” says Ann Frost, an Ivey associate professor. “But oftentimes, you don’t get to control that.”