What’s the Key to a Smooth Retail CEO Transition?

On a recent HBR on Leadership podcast, Jason Buechel, CEO of Whole Foods, discussed how important it was for him to address employees’ concerns as he underwent a transition period to replace legendary co-founder John Mackey in 2022.

Mackey had led the organic chain for more than 40 years.

In tackling a CEO transition, his foremost advice was to “understand the voice of the team members.”

Buechel, who on Monday was given the additional title of VP of Amazon Worldwide Grocery Stores, spent his 11-month transition period partaking in a  “Whole Conversations Tour,” speaking to associates and other Whole Foods’ partners to find out what was most important to them.

“In some cases, they had fears with John’s retirement of, are there going to be major changes to our culture or our quality standards? What are things going to look like going forward?” Buechel noted. “And so did our stakeholders, whether it was suppliers or customers, community partners. I think it’s important to understand the voice of all of those stakeholders as you’re making the transition.”

His secondary advice for those transitioning to CEO was to lean into their strengths as a leader. He said, “For me, John and I, we lead in very different ways. And that’s why we’re so complementary in working together. So I think it’s also about being authentic to yourself and at the same time, making sure that you’re supporting the company and where it needs to go.”

The retail industry has seen a number of CEO turnovers over the last year, including at Macy’s, Nike, Petco, Victoria’s Secret, REI, Ulta Beauty, Kohl’s, Ross Stores, Havertys, Signet Jewelers, and Dollar Tree.

In a blog entry, McKinsey called out four keys to success in CEO transitions:

• Not making it about you: McKinsey wrote, “All this attention and power can quickly create a celebrity CEO phenomenon where the transition becomes all about you. Successful CEOs don’t let this happen — they keep their minds focused on the institution.”
• Listening, then acting: According to McKinsey, “With people overanalyzing every word and move the new CEO says and makes, the urge to decide, declare, promise, and explain is strong. The best leaders in transition know that it is better to listen and find out what is really going on before making broad declarations or premature moves.”
• Nailing your firsts: McKinsey shared, “Getting your first impressions right will send strong messages about how you intend to lead differently (from the previous CEO, as well as versus how you have led in previous roles) and the renewal opportunity you see for the organization.”
• Playing “big ball”: Sandy Cutler, former CEO of the power management company Eaton, told McKinsey, “Play big ball, not small ball. By that I mean spending time on things that no one else can in ways that magnify your effectiveness without getting mired in things that don’t make a difference.”

Spencer Stuart advises setting a goal to establish a workable executive team within 12 months to avoid a “sophomore slump.” The executive research firm wrote in a blog entry, “Some CEOs never fully recover from a slow start to their tenure. The question new CEOs must resolve immediately is how prepared they are to be decisive on the critical people moves that will define their leadership team and, quite potentially, their success.”