While leadership transitions are a natural step for many organizations, the shift from founder to CEO is unique. This leadership change comes with a variety of challenges for both the founder and the new CEO stepping in. To ensure a seamless shift in leadership, here are four best practices that can be implemented.
Level set with your predecessor.
Not every founder transition will be the same – some founders will still want to be involved with the day-to-day of the company, while others might want to move away from the company altogether. For example, Steve Jobs shifted from CEO to Chairman of the Board at Apple, while Instagram co-founder Kevin Systrom left the organization altogether in 2018. No matter what route the predecessor chooses, clearly defining their new role is critical.
Should the founder decide to remain within the organization, successor CEOs should set expectations on what the founder’s new role will entail – both internally, to employees, and externally, to investors and the broader public. By setting clear guidelines from the start, there will be less conflict and disruption as time goes on. It’s important to remember that this person is used to leading the company, and handing over the reigns to someone else can be easier said than done. When these expectations are set, and more importantly, maintained, successor CEOs will have less conflict with the transition and ensure changes in the company are seamless.
Communicate with everyone.
Communication is the key to a successful founder transition. It is inevitable that employees, customers and stakeholders might feel a level of uncertainity following a leadership transition – this is magnified with a shift as critical as outgoing founder to incoming CEO. The only way to combat this is to face that uncertainty head on and start communicating with all parties immediately and consistently.
Being a strong communicator is one of the most important skills a leader can possess. With major shifts like the founder to CEO transition, it becomes even more paramount. Successor CEOs should prioritize transparent and frequent communication and create an open line of communication with employees, customers and stakeholders. By sharing information and openly communicating, it will ease the transition for all parties involved.
Make culture a priority.
It’s easy for company culture to be overlooked in a founder to CEO transition, however it can be one of the most important challenges faced by the successor CEO. A strong company culture and positive working environment leads to better collaboration, communication and business results. This type of culture can be put into flux with a major change in leadership like a founder to CEO transition, and the office environment can shift to one of anxiety and negativity. While it is inevitable the new CEO will face employees with founder loyalty, making company culture a priority can help to offset these challenges.
When successor CEO Brian Niccol stepped in at Chipotle, he not only had to improve its food culture, he also had to reset its company culture. Niccol set out to make both customers and employees “love Chipotle again” by innovating without losing sight of what was most important to both parties. This type of authenticity, honesty and transparency are at the core of a strong company culture. It is the job of successor CEOs to find ways to keep culture strong or improve it to create a better organization as a whole.
With a founder transition, there are often big changes ahead for the company. These changes can come in all forms, whether the company needs to transform their business model, rebuild their reputation, or in the case of Painting with a Twist, operationalize the business to scale and grow. As a successor CEO, these challenges are your primary goal.
From the first day a successor CEO steps into their new role, they must take action. Within 90 – 120 days, the team, the business model and culture should be assessed and a plan of action should be put into place. Successor CEOs must show employees and stakeholders that they can “walk the walk” and take decisive action to solve a company’s challenges.
The founder to CEO transition is not a one-size-fits-all situation and there is no one way to successfully navigate the change. By setting guidelines with their predecessor, practicing transparent and frequent communication, building a strong company culture and taking action, the successor CEO is taking the necessary steps to bring the organization to the next level.
By Eric Thurston
Source: Chief Executive
From August through October 2022, BCG and The Network, a global alliance of recruitment websites, undertook the world’s largest survey dedicated to exploring job seekers’ recruitment preferences—more than 90,000 people participated. This article reports and interprets additional survey findings and offers recruitment recommendations for employers.
Author believes that a more precise understanding of what exactly gives someone good judgment may make it possible for people to learn and improve on it. He interviewed CEOs at a range of companies, along with leaders in various professions. As a result, he has identified six key elements that collectively constitute good judgment: learning, trust, experience, detachment, options, and delivery.
Hiring has exceeded pre-pandemic levels in many markets and the shortage of skilled executives has put pressure in the increasing competition for top talents. If you have specialized and high-demand skills, for example on ESG, sustainability or bio-research, and a solid record of experience, you are well positioned to negotiate your salary.