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Readying for the New CEO – A Start-up CEO Transition Done Right - Part 3

What Role Should the Old CEO Play?



A University of South Carolina study from 2012 found that, after giving up the title of CEO, 40% of outgoing CEOs stay involved with the company in some way. But a founder CEO is both similar and different. Unlike a CEO who joins the company after founding, founders typically have a lot invested in the company – both in terms of equity and attachment. Many of the employees at that stage have joined the company because of a commitment to their vision, if not them personally, and many have become friends through the long hours of toil that it takes to get a company off the ground.


In most cases, even though the company may have outgrown them, startup CEOs have skills, relationships, and abilities that will help the company continue to move forward, thus, it’s imperative to craft a role for them post-transition. The Chief People Officer can help the CEO explore their strengths and help them think through the next steps for their career.

In our case, Brandon is excited to continue to develop Stash’s business through partnerships and business-to-business offerings—a job of building, which he is extremely and uniquely well-suited for. To have him continue to sit on the board, while also driving revenue, is a tremendous positioning of his skills. 


Not every outgoing CEO has the personality or the ability to carry this transition off, but when it works, it’s magic. I have seen it go very wrong as well. In my prior experience at an internationally recognized brand, I saw an outgoing CEO continue to keep his hands in the “pie” for the entire tenure of the new CEO, only to confuse subordinates about who was actually running the company and he ultimately undermined the new CEO.  No surprise, the on-going meddling caused the old CEO to feel he had to oust the new CEO and return to the seat himself.  This caused great turmoil in the company at the expense of morale and profitability. 


Perhaps this is why many outgoing CEOs prefer to ride off into the sunset. Navigating this decision really calls for a trusted relationship among the board, senior staff, and the CEO. The Chief People Officer, knowing the outgoing CEO well—their temperament and capabilities—can stand in that middle ground and help to determine what will work best for the company, its many stakeholders, and the new CEO. I have learned a lot in this journey – both the right questions to ask and the potential pitfalls to avoid. I look forward to helping Stash (and Liza and Brandon) to navigate this transition successfully.

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