Founder Exiting the Business? Here Are 5 Tips for a Smooth Transition.

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

Just about every founder believes he or she will be able to keep growing his or her business well into the future. But the reality is, bringing a startup to stabilized growth takes a certain set of skills while moving into larger expansion and development takes another. Most founders reach a point where they plateau and simply can’t grow the business any further. This isn’t because they’re poor leaders. It’s just because, as the saying goes, “What got you here won’t get you there.” 

Not only is making the decision to let go and bring in someone new to lead one of the biggest decisions a founder can make, but the transition itself can also be tough for two main reasons. 

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

First, founders usually put an incredible amount of personal risk and sacrifice into their companies over many years. They don’t want to lose what they’ve built. Second, a change of the guard can disrupt the culture of the company. Most founders have a strong personality, and the way they control the flow of data and who does what is a major driver of the business. When they unplug, the business loses its North Star, which creates risk and uncertainty. Investors can become wary and perceive the business as less stable and riskier to support. It takes time for new management to replace that sense of direction and safety. 

Despite these hurdles, businesses can use these five best practices to move forward without too much interruption. 

1. Be crystal clear on the objective and timing

Global Tech News Daily

Make sure everyone knows the answers to a couple of important questions. What are the benefits the company will get from new management? What will the company be able to do with someone different at the helm? 

Once leaders within the business can pinpoint a vision with all the positive advantages and lay this out clearly for their team, they should be able to identify exactly when the handoff will happen. Look for a period that will provide the fewest disruptions. A concrete date on the calendar will allow both individuals and teams to prepare mentally and logistically before the change happens. 

2. Set clear expectations for the founder’s role

Global Tech News Daily

Founders may choose to have no involvement at all with their business after the transition, or they can opt to maintain connections by putting on a different hat. For example, they can have a seat on the board, stay on in a specific capacity like heading the product department or continue to consult. 

If they choose to be involved, then they and the teams they support will need to understand the specific role they hold and the authority they do or do not have. With those boundaries in place, it can be easier for the founder to start practicing new responsibilities and for workers to start expecting a different type of support from them.

3. Gain agreement and commitment from the founder about the plan

Most founders like having control. They get used to being in charge and not being challenged. As such, they can become married to the way the company is run and resist the transition. Solidifying buy-in and a unified front between the old faction and the new makes for a smoother transition and provides reassurance to workers and investors. 

It goes without saying that the company board should get the founder and new leadership on the same page as quickly as possible so there are no mixed messages or conflicts. There should be consistent check-ins to ensure the founder and new CEO both understand that working together against any negativity, undermining or disruption is the best path forward. As the founder and new CEO work out disagreements, make sure not to let any issues be known to the company or market, as this can undermine the new CEO’s plans and objectives.

4. Communicate the plan both internally and externally

Many customers and teams love their founders. This can cause some resistance and negative sentiment regardless of what the new management is like or what their qualifications are. 

Good internal and external communication can break down any ill will by setting clear expectations and showing that the transition plan has been well thought through. It also reduces the odds that those overseeing the transition will undermine the CEO by being inconsistent or not being transparent.

5. Aim for no overlap

Lengthy overlaps between the founder and the new leader can create confusion about who is really in charge. To mitigate this, the founder, new CEO and company board should collaborate to make the handoff of responsibilities as efficient as possible. Ideally, there should be no overlap at all.

Take your business to the higher level it deserves

These best practices work. In a recent acquisition, a founder and his wife had funded their business from credit cards while their children were young. You can imagine the fear and personal sacrifice that comes with putting your family in that situation. Several of their kids worked within the business too, which created really strong ties to the company. So, the founder and his wife were very selective about whom they sold to and made sure the sale of the company wouldn’t result in sunsetting their product. 

They put mechanisms in place to ensure employees would be appreciated and the work environment they’d created would continue, but the key here is they resisted the urge to re-engage. Because they took those precautions and left immediately, we were able to build relationships with their team and move forward in a positive way. Ultimately, the transition went really smoothly.

Even though bringing in new leadership isn’t easy, it can absolutely be the right move. With these guidelines to keep you on track, the shift from one to the other can be one of the most powerful things you do to energize your company and jumpstart its next chapter of success.

News Related

OTHER NEWS

First Trust Energy AlphaDEX Fund (FXN) Hits a 52-Week High

The First Trust Energy AlphaDEX Fund FXN is probably a suitable pick for investors looking for momentum. FXN hit a 52-week high and is up 59.6% from its 52-week low ... Read more »

Meta Threatens To Close Facebook And Instagram In Europe Over Data Scramble

In a document filed with the U.S. Securities and Exchange Commission (SEC), Meta Platforms Inc (NASDAQ:FB) has warned it could be forced to close Facebook and Instagram in Europe if ... Read more »

How a To-Don't List Can Help You Achieve Your Goals

To-do lists are helpful tools for many people, but they can quickly take over our lives, making daily living feel like just another item to cross off of a never-ending ... Read more »

Immunovant (IMVT) Reports Wider-Than-Expected Loss in Q3

Immunovant, Inc. IMVT reported a net loss of 36 cents per share in the third quarter of fiscal 2022 (ended Dec 31, 2021), wider than the Zacks Consensus Estimate of ... Read more »

Buckle's (BKE) Sales Run Continues in January, Comps Gain 4.2%

The Buckle, Inc. BKE looks well poised on the back of its robust strategic efforts, including strength in e-commerce business and an impressive sales trend. BKE has been putting up ... Read more »

6 Best-Leveraged ETF Areas of Last Week

Wall Street put up a moderate show last week with the S&P 500 (up 1.6%), the Dow Jones (up 1.1%), the Nasdaq Composite (up 2.4%) and the Russell 2000 (up ... Read more »

Interpublic (IPG) to Report Q4 Earnings: What's in the Cards?

The Interpublic Group of Companies, Inc. IPG is scheduled to report fourth-quarter 2021 results on Feb 10, before the opening bell. – Zacks Let’s check out how things have shaped ... Read more »

Mednax (MD) Buys Night Lite Pediatrics to Boost Portfolio

Mednax, Inc. MD and its affiliated practices Pediatrix Medical Group recently acquired Night Lite Pediatrics, LLC in Orlando, FL. Night Lite is a private 13-clinic pediatric urgent care practice. The ... Read more »

Best Growth Stocks to Buy for February 7th

Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, February 7th: – Zacks Apple AAPL: This company whose business primarily runs around its ... Read more »

Gol Linhas (GOL) Stock up 16.2% in a Month: More Upside Left?

Shares of Gol Linhas GOL have displayed an uptrend on the bourses over the past month, gaining 16.2% against its industry’s 3.1% decline. – Zacks Image Source: Zacks Investment Research ... Read more »

Top Research Reports for Bank of America, Coca-Cola & salesforce

Monday, February 7, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including Bank ... Read more »

Sanofi's (SNY) Enjaymo Gets FDA Nod For Rare Blood Disorder

Sanofi SNY announced that the FDA has approved its monoclonal antibody, Enjaymo (sutimlimab-jome), to decrease the need for red blood cell transfusion due to hemolysis in adult patients with cold ... Read more »

The Zacks Analyst Blog Highlights: Alphabet, T-Mobile US, Advanced Micro Devices, Mondelez International and Chubb

For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

Why Mid-America Apartment Communities (MAA) is a Great Dividend Stock Right Now

Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

On Core Values, Self-Honesty and Having Fun with Jairek Robbins, the New President of SUCCESS

“You gotta answer your DMs, man,” says Jairek Robbins, half laughing, in his latest Brilliant Thoughts interview with Tristan Ahumada. Robbins, who is an acclaimed business coach, best-selling author and ... Read more »

Surging Earnings Estimates Signal Upside for Xilinx (XLNX) Stock

Investors might want to bet on Xilinx (XLNX), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and ... Read more »

BCB Bancorp (BCBP) is a Top Dividend Stock Right Now: Should You Buy?

Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

The Zacks Analyst Blog Highlights: AbbVie, Merck, Eli Lilly, Novartis and Pfizer

For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

BankUnited (BKU) Stock up 3.4% on New Share Repurchase Plan

BankUnited, Inc. BKU has announced a new share repurchase plan. The company’s board of directors has approved the repurchase of up to $150 million in shares of BKU’s outstanding stock. ... Read more »

TEGNA Inc. (TGNA) Soars 7.4%: Is Further Upside Left in the Stock?

TEGNA Inc. TGNA shares rallied 7.4% in the last trading session to close at $21.34. This move can be attributable to notable volume with a higher number of shares being ... Read more »

Can BCB Bancorp (BCBP) Run Higher on Rising Earnings Estimates?

BCB Bancorp (BCBP) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

Earnings Estimates Moving Higher for Marathon Oil (MRO): Time to Buy?

Marathon Oil (MRO) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

Transport ETFs to Buy on Solid Q4 Earnings

The fourth-quarter earnings picture for the transportation sector has been robust. This is especially true as earnings of 95.2% of the market capitalization of the sector that has reported so ... Read more »

The Zacks Analyst Blog Highlights: STMicroelectronics, BP and Asbury Automotive Group

For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

Earnings Estimates Moving Higher for Robert Half (RHI): Time to Buy?

Robert Half (RHI) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

Are You Looking for a High-Growth Dividend Stock? Bar Harbor Bankshares (BHB) Could Be a Great Choice

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor’s dream. But for income investors, generating consistent cash flow ... Read more »

Comcast vs. ViacomCBS: Which Stock is a Better Buy for 2022?

The entertainment industry is growing rapidly, with surging demand for over-the-top (OTT) content and other services. Therefore, prominent industry participants Comcast (CMCSA) and ViacomCBS (VIAC) should benefit. But which of ... Read more »

Here's Why You Should Add Quidel (QDEL) Stock To Your Portfolio

Quidel Corporation QDEL has been gaining on the back of its strong diagnostics portfolio. A solid third-quarter 2021 performance, along with solid potential in In-Vitro Diagnostics (“IVD”) products, is expected ... Read more »

Why State Street Corporation (STT) is a Great Dividend Stock Right Now

Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

FAA Approves Request by 19-Year-Old to Continue Tracking Elon Musk's Jets

The ongoing drama between Elon Musk and 19-year-old Jack Sweeney on Twitter seems to have reached new heights as Sweeney has now doubled down on receiving legal documentation to continue ... Read more »

Here's How Small Businesses Can Survive the Post-Pandemic Economy

The last two years have been especially difficult for small business. The good news is that it’s made many entrepreneurs smarter, stronger and more adaptable. The bad news, though, is that ... Read more »

How Business Leaders Can Thrive in Puerto Rico

Having helped several entrepreneurs move to and establish themselves in Puerto Rico, I’ve noticed that the island’s tropical lifestyle, enticing tax incentives and booming financial sectors have attracted many successful business owners. ... Read more »

5 Reasons Why You Should Give Gifts to Employees Any Time of Year

Ask around, and you’ll find that many professionals don’t feel they work in the most optimistic or fun-loving environment these days. The ongoing health crisis continues to make working from ... Read more »

'I Do Not Believe Silencing Joe is The Answer': A Complete Timeline Of the Spotify and Joe Rogan Controversy

The past few weeks have been a whirlwind of controversy surrounding Spotify and Joe Rogan’s podcast The Joe Rogan Experience. The streaming platform, which signed a reported $100 million deal ... Read more »

Spectrum Brands (SPB) Q1 Earnings Lag on Cost Inflation

Spectrum Brands Holdings Inc. SPB reported mixed first-quarter fiscal 2022, wherein the bottom line missed the Zacks Consensus Estimate, while sales beat the same. Strength in the pet segment and ... Read more »

Tyson Foods (TSN) Q1 Earnings Top Estimates, Sales Up Y/Y

Tyson Foods, Inc. TSN posted impressive first-quarter fiscal 2022 results, with the top and the bottom line increasing year over year. Sales and earnings surpassed the Zacks Consensus Estimate. – ... Read more »

Diodes (DIOD) to Report Q4 Earnings: What's in the Cards?

Diodes DIOD is slated to release fourth-quarter 2021 results on Feb 9.For the fourth quarter, the company expects revenues of $476 million (+/-3%). The Zacks Consensus Estimate for revenues is ... Read more »

What to Expect Ahead of Sonos (SONO) Q1 Earnings Release?

Sonos, Inc. SONO is scheduled to report first-quarter fiscal 2022 results on Feb 9.For fiscal first quarter, the Zacks Consensus Estimate is pegged at $647.17 million, indicating a year-over-year increase ... Read more »

Hasbro (HAS) Q4 Earnings & Revenues Beat Estimates, Stock Up

Hasbro, Inc. HAS reported impressive fourth-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The bottom line outpaced the consensus mark for the sixth straight quarter, ... Read more »

Zacks Industry Outlook Highlights: GoDaddy, QuinStreet and Asure Software

For Immediate Release Chicago, IL – February 7, 2022 – Today, Zacks Equity Research discusses GoDaddy GDDY, QuinStreet QNST and Asure Software ASUR. – Zacks Industry: Internet Delivery Link: https://www.zacks.com/commentary/1862576/3-internet-delivery-stocks-to-watch-in-a-challenging-industry ... Read more »