The business sector is changing, with a record-breaking number of chief executives either losing their jobs or resigning from their positions – a figure that in January 2020 was 39.5% higher than it was the previous year, according to 24/7 Wall Street.
This mass exodus of leadership has transformed the world of business as we know it, with companies scrambling to find replacements for these CEOs. When the top leader steps down, it can cause panic and confusion. Their responsibilities now must be delegated or assumed by new management, which can impact the structure the company worked hard to build over time. Additionally, CEOs are often viewed as the core of a business, and changes in upper management can often lead to lower morale among staff.
As important as CEO leadership is, shifts are normal, and your CEO may not be a permanent fixture at the company. The good news is that changes in management don't have to lead to widespread alarm as long as you communicate with your team and act like the leader they need.
CEOs who have recently stepped down
Jeff Bezos stepped down from Amazon on July 5, 2021, but remained on as executive chairman. He left his leadership role just three years after being named the richest man in modern history.
In 2016, Ursula Burns stepped down as CEO of photocopying company Xerox after starting there as an intern in 1980. She remained on the board as chairwoman until 2017, when she left Xerox completely.
Karen Katz was the CEO of Neiman Marcus until she stepped down in January 2019. Katz started as merchandising manager for Neiman Marcus in 1985, and remains a board member at Humana, Under Armour and Casper.
Suzanne Greco is the sister of Subway co-founder Fred DeLuca. She took over as CEO in 2015 after Fred’s death, and stepped down in 2018. She then became a senior advisor for Subway. Greco started working for the company in 1973.
Not much is publicly known about the resignation of Kevin Systrom, former CEO of Instagram. It was announced in September 2018, less than two years after Instagram's plan to better integrate videos into the platform.
Known for preppy and dainty jewelry, Kendra Scott stepped down from her namesake jewelry company in February 2021, almost 20 years after the company's inception. She will remain with the brand in a design and customer experience role, as well as continue its philanthropic efforts.
The one-time CEO of L Brands, which owns Bath & Body Works and formerly owned Victoria's Secret, stepped down in February 2021. Les Wexner left as part of a restructuring effort, separating L Brands into two companies: Victoria's Secret and Bath & Body Works.
What to do when your CEO steps down
Maintain a positive attitude.
Before your team jumps to conclusions, address your employees in a calm, empathetic manner. Be sensitive to their anxieties, and approach the matter with confidence and positivity.
"People might … think that their jobs and careers are on the line and [that] they must leave immediately before they feel humiliated about being asked to leave," said Ketan Kapoor, co-founder and former CEO of Mettl. "One negative thought can lead to [another, which] quickly becomes a vicious circle. So it's important to address the audience and assure them that the situation is under control, and there's nothing to panic about. With a small effort, you can prevent the workplace from being toxic."
While you don't want to be blindly optimistic with your team, you should explore the positive sides of each challenge. Peter Thies, president and co-founder of The River Group, advised being prepared to balance concerns with opportunities.
"The goal is for the team to have a shared understanding of the opportunities, a common view of nature of the changes that will likely happen and an open discussion of any risks," Thies said. "In most cases, the actual impact on teams in the near term is far less than most people make up when they first hear the news of a new CEO. An open discussion of this is very comforting to most teams. Change will happen, but it rarely occurs overnight."
Open communication is a crucial strategy to avoiding crisis during any company change. Respect your employees enough to alleviate their concerns without disclosing any private information, and do so before there's time for gossip to spread or panic to rise. Be upfront and transparent with them as soon as the news breaks.
"Unfortunately, there are rumor mongers at every workplace, and you must keep them in check," Kapoor said. "Maintaining openness and transparency is the key here. Before the employees approach you for answers to a thousand questions clouding in their mind, be proactive and announce a team meeting with the different departments."
During these meetings, he added, ask staff to share any thoughts or concerns they might have, and answer what you can. This might include any changes in hierarchy, how the switch will impact their positions and what to expect in the upcoming weeks.
Create an action plan.
If you don't already have one in place, you should form a plan to transition your team through the process. This will give them some stability in a situation that might breed uncertainties.
"It is likely that the departure of your CEO will seriously disrupt the company, so it's worth creating an action plan to be implemented during the transition period," said Steve Pritchard, business consultant for ASPLI. "Having a plan will help you to be ready for the potential changes a lot quicker."
To do this, Pritchard advised developing a timeline and calculating the amount of time it will take for a new CEO to fill the position.
From there, you can determine how to spend that time efficiently while being open with your team about changes. Don't rely on upper management to come to you; be proactive in getting answers to questions – both your team's and your own – and offering a strategy for the upcoming weeks.
"Take the opportunity to understand the new CEO's values, agenda and intentions for the company," Thies said. "Are these in line with the strategy you support? Do you believe that he or she will be the right kind of leader? In a managerial role, you want to answer these questions for yourself so that you can then prepare to discuss this with others."
Sammi Caramela contributed to the writing and reporting in this article. Some source interviews were conducted for a previous version of this article.