It’s not always easy to take up a CEO role. It can be easier if no one liked your predecessor. It can be harder if you’re taking over from the founder and harder still if the founder is still in the business.
The nature of the challenge depends somewhat on the stage at which the founder has left. If they created a start-up with a view from the outset to plan for a mid-term exit, it’s usually not so tough. They knew that the long-term management didn’t suit their skills and/or passions, and that’s why they’ve left.
More difficult is the founder who has created an indelible imprint on the business over a long period of time. They are respected, or even beloved, or at the very least, people find it difficult to distinguish the person from the company or imagine a scenario in which the founder is no longer there.
There are some mistakes to avoid:
- Acting as though the founder never existed or deliberately avoiding their name.
- Removing symbols of their legacy, such as dismantling traditions – these could be key events, company values, slogans, awards and so on.
- Positioning your efforts as remediating things that that were wrong or neglected.
- Rushing in without finding out enough about the past and where people feel the company is at (and not knowing enough to avoid the first three traps listed above).
- And at the other end of the scale, slavishly adhering to practices just because of tradition. Failing to do what you were engaged to do – make changes or take the company to a new level.
The balance can be a subtle one. There are two key principles to bear in mind:
- Hit the ground learning, not running. Don’t let the weight of taking over from a founder make you feel rushed. Don’t announce anything major until you’ve taken time to get out and about in the organisation, and listen to people’s views, concerns and ideas for the company.
- Praise before burying. It is important to celebrate the past, including the founder and the legacy he/she has left. The founder, their deeds and their impact should be celebrated broadly and generously. Hold events that cherish the proud history. But once this has been done, it’s time to move on. Start creating the signs and symbols of a new era.
If you are replacing the founder who never really thought of leaving – even if they suggested otherwise in their public statements, they may be leaving for one of three reasons:
- They are struggling with a business that has outgrown their skillset (e.g. because of massive growth, an IPO or an increase in complexity)
- They are struggling with a business that has gone from making money fairly easily to one that is barely profitable or even bleeding cash
- They are losing the energy or passion for running the business
These situations are notoriously difficult. Even though the founder genuinely wants the company to go from strength to strength, there is often a small part of them that wants to see that nobody else can do it quite as well as them. Common problems include:
- The founder second-guesses or even reverses your decisions
- The founder looks for your mistakes (even if they don’t realise it)
- The founder ‘helps’ too much and blurs people’s sense of who is in charge
So what can you do? There are some key steps:
- When you get into serious conversations about the role (and well before an offer), find out how many times they’ve attempted, in one way or another, to appoint a successor. If there have been three failed attempts in the last 18 months, become very wary!
- Once you have been offered the job, you need to set up a clear psychological contract before you accept. If they aren’t moving out completely, make sure they commit to ring-fencing their role. Get them to state that they won’t second-guess, take over, or confuse people about who is charge. It may be confronting and it won’t necessarily prevent the issues but you may find it very helpful to be able to refer back to this conversation…
- And if/when these issues arise, make sure to have a gentle conversation with them about what had been agreed. If it recurs, consider getting the Board involved.
- And if it doesn’t improve, make it clear that you won’t remain.
Those are the bad scenarios. There’s also the positive examples: the founder has done great things, but you now have the opportunity to build your own legacy.
Key principles to bear in mind here are:
- Legacy is about culture and culture is anthropological. Culture comes from stories, rituals, symbols, rules, norms and language. These are the things that you can start to add (or encourage others to generate – they don’t have to come from you). Before you know it, the new customer service award, the new team meeting structure, the new internal slogan or the types of stories you share in your weekly email have become markers of the new era.
- Legacy is a very long-term concept. Start small and practical. Ensure that the business will still be around in 12 months’ time before you start pushing too hard on where it could be in 20 years.
- But do form that long-term view and gently seed it in. It’s not egotistical to want to create a legacy; it is in fact a powerful source of life meaning.
In all likelihood, if the founder was a good leader, then they would have focused heavily on legacy in their final years in charge. In the words of Erik Erikson, the pioneer of thinking about life crises (‘the identity crisis’, ‘the midlife crisis’ and so on), the end of a career is when one faces a choice between ‘stagnation and generativity’. Hopefully, the founder had taken a generative view – caring more about the future long after their departure than any short-term gratification.
Now you can do the same. And if you let the founder know your concern for the long-term well-being of the company is the same as theirs, that sense of shared purpose should be a very good start.
About the author
Anthony Mitchell is an organisational leadership expert, a regular contributor to Dynamic Business, and Chairman of strategic leadership advisory firm, Bendelta. He’s also Chairman of the Aurora Education Foundation, which provides accelerated education opportunities for high potential Indigenous students and Chairman of Amnesty International Australia from 2011-16. He and his team at Bendelta are seeking participants for their inaugural nature-based leadership program in the Himalayas this October.
