A few weeks ago, the Managing Partners of Precision Metrics were asked to speak to a group of Founders/CEOs at an Accelerator Program for early-stage technology companies.
The topic; When Or If, A New CEO Should Join The Organization.
It can be a touchy subject; but the reason we were invited to share our insight was primarily because as recruiters, we see and hear very interesting things when it comes to this topic.
When most founders begin to build their ideas and ultimately a solution, their vision often doesn’t consider that they won’t be taking the growth with that CEO title to the end; IPO, Acquisition, etc. At inception, their thoughts swirl with; “Will we get funding?”, “Early on, can we get the best companies on board to help build credibility?” “Are we going to attract top talent?” “Will we capture enough market share before someone else is able to do it better, faster, cheaper?”
The question, Should we bring in a new CEO? can be a tough one and when left up to the board and VC, can potentially cause a rift. It goes without saying, the possible need for a power transition is best initiated by the Founders.
Ideally, the earlier that the leaders of these young companies begin thinking about this, the better. Aside from setting expectations, it’s beneficial to watch for shifts that could signal it’s time to consider a fresh CEO. Although there are many factors to watch for, if a company is experiencing the following, it could be time to evaluate the big question;
Difficulty Hitting Quotas and Targets
Much More Effort Is Needed To Get The Same Results You Enjoyed A Year Earlier
Constant Change of Strategy
Excuses are Given More Than Results
It makes sense that there is a certain amount of apprehension with the idea of someone else coming in to take over the reins. After all, it can be difficult to imagine anyone caring about your company and quest nearly as much as you do.
The level of “openness” to the idea will fluctuate as time evolves for Founders. Continuing to evaluate strengths and weaknesses will help drive the decision which will prevent the possibility of being blind-sided with a decision coming down from others.
From what we’ve seen in the industry, many of the Founders and Co-Founders who stepped back at some point and allowed someone else to take the reins, found themselves back enjoying what their initial passion was – the actual “building of the technology” and coming up with the next big thing. For many, it’s when they are having the most fun, and rarely have regret.