At some point along every Founders journey comes the time when they consider what their role should be in the next stage of their business’s growth. With many Founders assuming the role of CEO, this question becomes not solely about the ownership of their business, but also about the leadership of their business.
The reality of planning and effecting any transition is that it usually directly involves not just the Founder themselves, but half a dozen or more key stakeholders - Chairs, Investors, Co-Founders and the C-Suite team - throughout the end-to-end process. Equally, whilst not directly involved, external stakeholders including key clients and partners are often also part of the consideration, if not the actual conversation.
The Excelerator Partners team has had the privilege of supporting many Founders seek their replacement, managing the recruitment of their new CEO.
There is rarely a more critical, sensitive, complex and impactful brief that we will support our clients on than this. And the pathway that is chosen can be highly variable – from the immediate replacement of the Founder for a new external CEO; to the hiring of perhaps a COO or CCO who is aligned as the Founder’s successor within 12 months; to the re-alignment of one Co-Founder to another C-suite role and the exit of the other Co-Founder for a new CEO.
And in all these scenarios, the Founder’s role post the commencement of the new CEO is as critical to determine, not only for themselves and the rest of the business, but also for the potential new CEO candidates to understand. Indeed, the design of the new CEO and Founder role briefs can be one of the most energising and value creating tasks a Board undertakes, unlocking new value and impetus in the business.
Here are our key takeaways to help all stakeholders involved in this complex journey:
Emotiveness – no matter how formally and professionally the process is led, it will always be highly emotive for the Founder CEO – empathy, openness and generosity from all parties should be the bedrock throughout. One of the most impactful testimonials our team has received was from a Founder that focussed on the kindness and fun they had felt throughout the recruitment process and how it had totally re-energised them in their own business.
Timeliness – the most difficult scenarios are when it’s been left too late, for whatever the reason. We’ve very rarely experienced our clients saying they started this change process too early, but frequently both Founders and Investors acknowledge that they should have acted sooner. Starting the conversation and the planning as soon as you enter a new growth phase, and then progressing to an active search at the right time in the journey is critical.
Peer Analysis – all stakeholders should seek advice and listen to stories of those who have trodden the pathway already (successfully and unsuccessfully). Whilst it is a truly unique scenario in many ways, there are definitely key learnings from the market. Ultimately, the topic deserves a large quantum of conversation and reflection!
Determining CEO v1.0 – remember that this is the first time you are crafting a CEO role brief. The Founder may well have been the CEO for many years, but the business has never had the opportunity before to determine exactly what the CEO role brief should look like, and exactly the profile of individual they seek. Embrace that this isn’t Founder v2.0, but rather CEO v1.0 definition.
Stabilising & Energising the Team – it can be easy for the focus of discussions to be centred primarily around the Founder and the Investor, but it’s vital that the rest of the team, particularly the leadership team, are part of the thinking. They will undoubtedly ultimately play a critical role in the recruitment process of the new CEO, and their feedback can often provide insights that shape the new CEO role brief and the Founder’s future brief. It often transpires that they will probably have been one step ahead of any decisions and communications in their thinking.
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