The Vatican vacancy, which was filled yesterday, was created because Pope Benedict broke with the tradition of centuries and said, simply, "I can't do this job any more." While his surrender of power was based on physical limitations, its implicit message to other CEOs, who cannot perform their jobs for different reasons, and because of different shortcomings, should be attended to.
Consider how messy, destructive and unsatisfying the end-of-life decisions related to CEOs usually are. Jack Welch's famous GE transition stands as an exception; in that case, after Welch announced he was retiring, there followed "a lengthy and well-publicized succession planning saga... between James McNerney, Robert Nardelli and Jeffrey Immelt."
That rigor was only possible because Welch was a legend and the board essentially ceded him hiring authority over his replacement. But in the non-hagiographic world, the real world, it's rare for a CEO to retire heroically.
Most of the time, CEOs stay far too long and rarely leave of their own will, unless it's for a better job. In fact the more serious their problems, the deeper into the bunker they retreat. The refusal of under-stress, under-performing CEOs to exit gracefully means they typically end up getting fired for non-performance, or get tripped up by personal transgressions. While all CEOs have contracts, those legal safety nets don't protect shareholders. They enrich failed CEOS with gold parachutes, or provide a layer of protection (sometimes) for the company, should the CEO misbehave. I say "sometimes" because when Mark Hurd got canned by Hewlett-Packard for falsifying expense accounts related to a female contractor, he walked away with more than $35 million as a reward for his deceit.
But what about the hundreds of CEOs, like Andrew Mason, whose failures are professional not ethical? Who are clearly not up for the job yet stubbornly remain in place as the bottom falls out of their business and their window for success narrows by the day.
What happens is... nothing. When was the last time, if ever, that you recall a CEO having the brutal self-awareness to say, in effect, "I'm resigning because I'm not able to perform this job at the level it should be undertaken, and there better people than I to move the company forward."
Consider how much shareholder value this would preserve and create -- which, of course, is the CEO's primary responsibility. When a CEO is under attack, it's a massive distraction to the organization at a time when it needs to focus relentlessly on its business. Instead, speculation about the future of the CEO, and the implications of his or her departure for the company and its people, sucks valuable time and energy.
But CEOs never admit defeat. They never concede that for this particular company, at this particular time, they're not the best possible leader. They don't because they're not trained or rewarded for doing so. So they hold on ferociously -- inventing new strategies, firing key leaders and hiring new ones, promising turn-around and reinvention -- when the change they should make is looking at them in the mirror.
Their egos and their sense of sense would never permit that level of honesty. Everything about the CEO rise to the top militates against the humility required to pull a Benedict. Corporate success requires unquestioned confidence and belief in your own super-hero qualities. And the further up you go, the more you find yourself in a self-reinforcing bubble of sycophancy. Your whole sense of self-worth is wrapped up in your CEO-ness; to willingly surrender it would be a form of ego decapitation.
There was no modern tradition in the Catholic church for what Pope Benedict did, and there is no modern tradition for its analog, for a CEO to simply say "I quit." American business, global business, needs a courageous CEO to make that gutsy and self-aware decision; to flip the words of the famous Leonard Cohen song and say "I'm not your man." (And the vast majority are men, which is part of the problem.)
I'm not going to list the current CEOs who would serve their companies and shareholders by taking this step. They know who they are, or should. Past CEOs who should have taken the Benedict farewell include the last handful of dismals of CEOs at Kodak, Leo Apotheker -- a decent but massively ineffectual financial/operational guy who presided over a $30 billion drop in HP's market value, and John Akers, whose 18 years of (sic) leadership almost destroyed IBM.
A new tradition of bold, dedicated CEOs stepping aside when they know that there are better equipped leaders for their companies would be an extraordinarily valuable contribution to capitalism. It's a sign of strength, not weakness. It's a sign of understanding, not failure. Times and companies change, and the ability of leaders to change along with that has natural limits. Sometimes -- as Pope Benedict reminded us -- the current CEO doesn't have a prayer.