What to do when a former boss now reports to you: work experts

Warren Buffet He stepped down as CEO of Berkshire Hathaway on December 31, but still works with his colleagues every day.

The 95-year-old, who ran the Omaha, Nebraska-based holding company for six decades, is technically retired but still serves as chairman of the board. In an interview with CNBC’s Becky Quick on “Squawk Box” on March 31, he said he goes to the office every day and remains involved in investment decisions. The company’s CEO is now his hand-picked successor, Greg Abel. “I won’t do anything [investments] He thinks Greg is wrong,” Buffett said.

While CEO, Buffett transformed Berkshire Hathaway from a declining textile company into a global conglomerate that generated overall returns of over five million percent during his tenure. Abel told “Squawk Box” on March 5 that he and his successor talk almost every day. “If I’m in Omaha, we always connect,” Abel said. “If I’m traveling, like yesterday, I check in frequently to see what he’s seen, what he’s heard, what I’m feeling. So if not every day, then every few days.”

Buffett and Abel did not immediately respond to CNBC Make It’s request for further comment about their working relationship, but their situations highlight an unusual dynamic: a leader taking on a secondary role at their company. A former company leader reporting to you may face both challenges and significant advantages, he says Amy Gallois a global workplace dynamics speaker and author of “Getting Over: How to Work with Anyone (Even Difficult People),” out September 2022.

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“You don’t lose that institutional knowledge,” says Gallo. “You have a leader who is in charge of the organization, who knows what it takes to lead this organization, who knows what has worked and what hasn’t worked in the past.”

If your old boss now reports to you and is happy with the arrangement, of course, he can help position you as “the right person to take over, the person who has the skills, the person who will take the organization to the next level of success,” Gallo says.

On the other hand, he notes, you may have a hard time showing your other employees that you are truly the one in charge. “You’ll probably feel undermined. You’ll feel underestimated. You’ll feel like people don’t respect you,” says Gallo. “You may feel like you’re not doing as good a job as the old leader did.”

For most people, the key to effectively handling this situation and possibly becoming a better leader in the process is to minimize the cons while making the most of the pros, he says.

Just like getting a promotion over your friend or giving constructive feedback to your manager, being your boss’s boss can be difficult. The organizational psychologist and leadership development expert says that in many cases the dynamic is “more likely to prove destructive and problematic than truly helpful.” Zoe Fragou.

A former boss may experience grief, loss of identity, anxiety, or an overwhelming sense of uncertainty, and a new leader may struggle with overcompensation and “recalibrating” their professional relationships, Fragou says. “The danger lies at both extremes: Overcompensating by asserting dominance too quickly can undermine trust, while delaying difficult calls to avoid and preserve old connections affects credibility,” he adds.

Moreover, he says, a former CEO may not easily give up his executive mindset overnight Muriel WilkinsCEO of leadership consulting firm Paravis Partners and author of “Leadership Unblocked.”

“It can get in the way of two big things,” Wilkins says. “The first is to name yourself as the new CEO. Second, it may delay some of the decisions you want to make or, frankly, you may feel pressured to make some decisions that you don’t think are necessary at the time.”

The best way to get a former leader to report to you is to maintain a healthy ego “based on genuine self-awareness, self-esteem, and proven ability,” says Fragou. If you can both do this, you’ll probably create a great arrangement, he says.

Think of your direct report as a partner, teammate or close advisor rather than your competitor, Wilkins advises. “I don’t think you should treat this any differently than you would in any other business relationship, where there is a proper hygiene agreement for what the relationship will look like before trouble spots arise,” he says.

Wilkins notes that there is no one-size-fits-all approach to leading a former boss. “The best leaders have the capacity to transform themselves because they understand that their ability to transform an organization is limited by their capacity to transform themselves,” he says.

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