Should a Business Founder Step Back or Step Down?
Your Strategy for Letting Go in Business
Are you a business founder who has decided it is time to take a step back from the business you built? How do you do this successfully? What is letting go in business?
One of your key decisions will be how much involvement you plan to have after stepping away.
Your Choices: Step Back or Step Down
The choice you must make is whether to step back and retain involvement in the business – like Google founders Larry Page and Sergey Brin when they decided to step back as CEO and president of Google’s parent company, Alphabet – or step down to relinquish (almost all) control. Both are potentially rocky roads for you to travel, with plenty of pitfalls on the way. It’s hard to let go of your company.
How Do You Step Back Successfully?
If you have grown tired of doing all the running in the running of your company, but still wish to remain involved in the business, your role will change dramatically. You must understand how for your business to continue to be successful and grow its revenues further.
The main change is how you operate within the business. You will no longer be the one who makes all the decisions, but you will retain strategic oversight. You will remain involved in developing the business strategy that aims to generate consistent results.
To make this transition successfully, you will need to do two things:
- Build a leadership team
- Agree your role with your team
Let’s look at each in a little detail.
1. Building a leadership team
Stepping back successfully is a gradual process. You start by giving your teams autonomy over projects and helping them to develop their own business acumen. If they make mistakes, you are on hand to help, but they remain fully accountable for getting things right.
Over time, your teams learn more about themselves and the business, and you equip them for doing more without turning to you.
Through this process, you may find natural leaders who are able to take responsibility for their teams and for the role that those teams play within the business. Your head of sales, director of marketing, chief financial officer, and so on. If you don’t have the people within your company to lead each part of it, then you will need to hire senior-level executives externally.
Stepping back is a series of small steps. By building your company’s leadership competencies across all its functions one-by-one, you increase your business’s capability to grow. The people stepping up or being hired into senior roles will have greater experience, knowledge, and expertise than you in their field.
Eventually, you should find that your business can manage itself. Your role then becomes one of overseeing strategy rather than overseeing operations.
The final step in stepping back is to put in place a managing director or new CEO. You must define the new CEO role. Is there someone within your company who can perform the role (like Sundar Pichai at Alphabet), or should you look externally for the right person?
2. Agreeing your new role
You should agree your new role with your new CEO/MD and leadership team. Make sure that they understand their responsibilities and roles within the business. Put in place reporting lines that take you away from daily operations – it is your chief executive’s role to ‘drive the bus’.
Equally importantly, make sure that you understand your role – to help develop the strategic direction of the business. It is not to get involved in the daily running of the business and undermine the authority of your leaders and your CEO or MD.
How Do You Step Down Successfully?
You may be considering the ‘nuclear option’ – to step down entirely without stepping back first. If this is your choice, you must still plan it. You will need to:
- Examine your organization, its leadership team, and its capabilities
- Decide on the talent you need to manage and grow the business successfully
- Hire a professional management team
- Step away, but remain available
Unless you wish to remove yourself from the business entirely – in which case, you would be selling it – you should keep the right to veto business decisions. You’ll need to establish guidelines on when you will use this power. Stepping down is very much a decision to relinquish (almost all) control over your business. Which is why it is so important to have the right management team and CEO in place.
Your New CEO Is Key
Whether promoting from within or hiring externally, it is essential to get the right CEO (and leadership team) in place. Your employees are used to following your lead, and for them your ‘departure’ from the business may be a shock.
Thus, it is essential to spend time assessing your current managers and leaders and ensuring that they meet your expectations of what is needed from each to take your business forward. You may find a CEO from within your ranks. You may find that you are short of a CEO and other crucial leaders.
At Lime Talent, we help business founders like you to step back and step down. We know how hard it is to let go, and we understand the gravity of getting the right people in place for your business. To find your new CEO and other executives, contact us to learn about our executive search services.
In our next article, we discuss ‘Who does the CEO role now, and how do you ensure success?’