A recent Forbes article by Robert Sher used Microsoft’s CEO Steve Ballmer’s announcement to step down to ask the question, when is it time for a privately-held company CEO to do the same. What are the signs that you should pay attention to that tell you it may be time to go?
As a privately-held company you can be a lot more nimble in how you move to the next step than a publicly traded company. Selling is certainly an option and can usually happen in 12-18 months. Bringing in someone to run the company while you move up or out is another. In the latter case you could take the title of Chairman or retain the title of CEO while naming your successor President or COO.
I will never forget the time, recently, when I walked into my CEO member’s office for our monthly one-to-one coaching session and he said, “I’ve decided to fire myself”. This was not a spur of the moment decision. We had been talking for months about his frustration to ineffectively lead his management team. Since then he has brought is someone he has confidence in to be CEO while he focuses on special projects that will help grow and diversify his company.
How do YOU know when it’s time? The Forbes article cited four questions to ask yourself as the leader.
1) Are you enthused and energized about taking your company to the next level or do you feel some level of burnout? It takes passion and commitment to keep a company moving forward and upward. And it always takes longer to get there than you think.
2) If you feel you have the energy, do you have the skills required to run a larger company? There is considerable difference running a $5 million company than a $25 million firm or a $50 million company than a $150 million one. Since the primary net worth of a privately-held company’s CEO is tied up in the business are you willing to risk this at your current age?
3) Have you been successful recently? Are you meeting the goals and objectives you have set for your company? If the answer is no then it may be time to step down. This may not have anything to do with your skill set but more with your passion quotient for leading an organization.
4) Is your business still able to achieve what you hoped it could achieve? Many businesses have limitations. Limitations to how big they can become. Limitations to how much profit they can make. Once a business owner realizes this the fire may go out of their belly. Now may be the time to create a liquidity event for himself/herself or turn it over to someone who has the vision and energy to establish other products or markets.
I guess the message here is that if any of the above resonates with you don’t feel that this is an unusual feeling. And don’t beat yourself up for feeling this way. It is a natural course for someone who has been responsible for so many families for so many years. The business is your identity. But it is also your retirement so do the right thing to protect this asset.
Consider Reading This
Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within by William Rothwell. I have not read this book but it is highly rated on Amazon and will take you to their website where you can search for alternative resources if you wish. Rothwell is a professor at Penn State University and also runs a consulting firm. This is not so much about strategies to succeed the owner of the business as it is about always having the right talent in place to continue the growth of your company. Is you workforce aging? This book will outline strategies for creating a complete succession planning program for your business.