Handing Over the Reins
Whether a start up business looking to scale or an established family business with owners who want to take a step back, appointing a new leader is one of the most important and difficult decisions an organisation will make.
Emotional attachment to a business that you have created or that has been in your family for generations is strong and can make the decision making process all the more difficult.
For the purposes of this article we will refer to your most senior leader, your Managing Director or the individual who has overall accountability for the running of your business, as the ‘CEO’. Whether this is a term you adopt internally is entirely a personal decision, though it is worthy noting that some people specifically covet the title, CEO.
There is no blueprint that defines a particularly successful CEO as the makeup of the great CEO will differ from organisation to organisation. According to the Harvard Business Review, 40% of newly appointed CEOs do not live up to performance expectations in their first 18 months on the job.
Knowing what it is your organisation needs goes some way to avoid being disappointed with your new appointment.
Expect the recruitment process to take time. Expect the process to require significant inputs from your team and you will achieve the right appointment.
Reasons to Hire:
Looking to scale and grow
No.1 skill set – Strategy and Planning
Whether growing a business to sell or growing to improve the bottom line, many CEOs are appointed in order to grow a business. Not all founders and owners are skilled in the business growth activities required to take the business to the next level.
Many entrepreneurs and business owners are deep in the detail of the business but that approach is not scalable. Having a CEO or Managing Director performing ‘CEO’ duties is crucial. It is common for owners / founders to have a leadership style where they are very hands on and give their team all the answers – this is leadership through expertise.
Not only does this pose the risk of having all a company’s eggs in one basket, it also turns into a bottleneck that slows the workflow, stunts employees’ individual growth, and detracts from the time leadership can dedicate to steering the company where it needs to go. It can also lead to very narrow thinking as the owner / founders? experience may be deep and technical but can lack broader commercial knowledge.
Scaling a business requires someone to have time and space to plan and set a strategy to ensure the business is successful.
If the CEO is still stuck in the day-to-day doing the employees’ jobs, no one is doing the CEO’s job. Their transition away from the business requires trust in the employees, including the new CEO, to execute their defined duties that contribute to the long-term success of the company. A CEO who can deliver growth requires high levels of skill and expertise in strategy planning, communication and influence.
Lifestyle choice and taking a step back
No.1 skill set – Operations and Delivery
Owners and founders may wish to spend more time away from the business. It could be as simple as wanting to be able to take extended holidays, spend time with family or even a desire to transition to retirement whilst retaining ownership of the business.
In this instance you are not looking for someone to reinvent the wheel or to drive growth and expansion but someone to take on the smooth running of the business. This requires an individual who will join a business and give employees and clients a sense of confidence and authority, without creating a sense of revolution!
In this case it is really important to bring on someone who is strong operationally and can oversee with a true general manager skill set. They may have experience as a COO or CFO and will be able to provide relevant stewardship in these key areas of the business.
This person will not be looking to grow or expand the business so will not require the senior sales experience. They will be trusted to maintain relationships with existing clients, suppliers and employees, but winning new business is not an area you will need them to have experience in.
To discuss the type of leader who could benefit your organisation, contact us today on +61 3 9602 1666 or email@example.com.