The Founder had been running the business very successfully for 40 years but the market was changing. Revenues were flat and profits were declining. The Board realised that change was needed with a new business model likely. As the Founder was largely the person responsible for sales, an interim Chief Executive was appointed to improve the operational side of the business and make recommendations for change. The interim made it clear that he did not want a permanent job. The challenge was to bring in a permanent Chief Executive and bring about a change in role for the Founder. Previous attempts to bring in a new Chief Executive in the past had been vetoed by the Founder.
A number of things needed to happen in parallel. The Board needed to understand the succession planning process and, in particular, the likely transitional issues faced in delivering the existing strategy. The Founder needed to buy in to the need for change – in part to having a new professionally qualified CEO but also to accept that his role needed to change or that he needed to retire.
Our process started with a conversation over dinner to understand the motivations and desires of the Founder and his wife (also on the Board) and to explain how succession planning worked and what the implications of having a new CEO would be. The dinner was instructive – the wife wanted the Founder to stop work, it emerged there were health issues, and there was considerable disagreement between Board members as to how to proceed.
Thereafter there were three parallel work streams – aligning the Board in one direction, managing the Founder’s transition and recruiting a new CEO.
Getting a collective buy in to the current situation, the requirements of the role and the specification for the right candidate took 6 weeks, 6 iterations of the candidate brief and considerable debate. Yet this consultation period enabled a search firm to then find a shortlist of 3 candidates in a month and for the interview group to be able to show how the candidate met the requirements of the brief.
We then chaired the selection process for both first and second interviews ensuring evidence-based questioning in a structured way so that we could fairly compare the three candidates. The second interview was preceded by psychometric profiling to provide further evidence to question at interview.
The Founder was bought out as it became clear that his views on the way forward and those of the business were different. A new, entrepreneurial CEO started within 4 months of the Board approving the search. Inevitably given the history a new start had to be made with the management team and 2 early appointments were quickly made to strengthen capability.