End of an Era: Thoughtfully Planning the Departure of a Founder
by Chris Cancialosi
I recently sat down with a good friend and fellow entrepreneur to catch up. We get together on a fairly regular basis and I value our time together as a chance to share our experiences, challenges and successes through our respective careers. And because we are at very different points in our entrepreneurial journeys, we are able to provide each other with a new perspective.
During our last conversation, my friend made a reflective observation that I really admired. He told me that he’d been recently pondering the impact of his inevitable departure from the company he has run for the past thirty years. Although he has no immediate plans to retire or leave, the truth is, he won’t stay in his role forever.
In a recent town hall meeting, he came to the stark realization that the way he behaved every day sent messages to his team. Whether intentional or not, his people took his cues on how to behave within the company to heart.
Faced with this immense influence and responsibility, my friend realized how deeply his departure would impact the organization he had worked most of his adult life growing. As a result, he has become very intentional in planning his departure in order to minimize any negative repercussions.
The Impact and Influence of Founders
Founders have enormous influence on the culture of their organizations. Their personal beliefs and assumptions about the right and wrong way to do things takes on a life of its own as they onboard new employees during the startup phase. If the beliefs of the founder don’t make for good business, the organization will fail to thrive and will likely shut down. If the organization succeeds, that success only serves to reinforce for members of the organization that those ways of working are, in fact, the right ways to work.
As the organization continues to grow, new members will either adapt to the culture or fail and depart. More time and more success only serves to further embed the culture and way of doing things as the ‘right’ way. Even when founders leave an organization at this stage, their legacy can continue to drive thinking and behavior in the organization for years to come.
This isn’t necessarily a bad thing. The danger arises when the organization is reliant on the embedded ways of working despite changes in the environment that change the game. Being great at baseball is fantastic so long as the game doesn’t suddenly change to football and you’re left wearing a batting helmet.
A Challenge or an Opportunity?
When founders have been successfully leading their organizations for long periods of time, their departure can be extremely challenging. It may come at a time when the organization finds itself at a crossroads; a point where the old ways of doing things may not be the best path to the future.
In these cases, the culture may need to evolve in some ways to better position the organization moving forward. But a founder’s poorly planned (or unplanned) departure can leave the organization they created set on autopilot as the remaining team members continue on the path that was established for them.
This type of situation can bring an organization to its knees as people grapple to make sense of the departure and try to understand how they will continue without them.
While certainly challenging, this does provide the founder with the opportunity to be proactive about preparing their organization for the time when they finally make their exit.
How to Prepare for a Proper Exit as a Founder
Here are four things to ensure that your departure as a founder goes smoothly:
1. Take the time to properly reflect. Consider the beliefs, assumptions and values that you hold and how they have shaped your organization. This may require seeking the help of others as you reflect on the current culture of your organization and all the strengths that may come with it.
In order to do this right, founders and their leadership teams need to understand the culture in which they operate and think deeply about how it may serve the organization well, or potentially derail them, in the future.
Founders can then begin an intentional process of shaping the culture over time, by role-modeling needed future behaviors, by shaping recruiting processes to hire the right talent, by shaping the compensation structure to reward and reinforce the needed behaviors in the future, and by evolving other key systems and processes to carry the organization forward and yield sustainable success.
2. Don’t wait to develop your plan. Waiting until your departure is imminent will only leave you regretting the chance you had to plan ahead. More importantly, it puts the sustainability of your company at risk. If for nothing else than to mitigate risk, planning for your exit now helps ensure that no matter what, your team will be able to carry on in a sustainable way.
3. Select a successor early enough to implement a thorough transition. Often, founders will wait too long to identify and begin grooming their heir. Take the time to engage your successor in reflecting on the current culture and how it may need to evolve to help drive the behaviors required for success during their tenure. By partnering with your successor in this process, you can reinforce your underlying beliefs and assumptions about what is important. Then, you can both understand how those beliefs may or may not need to evolve to set the organization up for success once you are gone.
4. Keep your team engaged. As the time of your exit nears, take the time to engage your team to help them understand what is happening and what it means for them and the organization’s future. Culture is a collective concept; so actively engaging team members in understanding the culture, the strategy and the ways in which things may need to change can be beneficial. It allows people to become a part of the process rather than sitting back and feeling like something is being done to them. It also helps align them around what may need to change and what must remain stable in order to succeed in your absence.
Whether by design or default, no founder can guide the ship forever. Eventually, things will change. Preparing for this eventuality can have a profound effect on the future of what you and your team have worked so hard to build.
As a founder, you and your team have all had a hand in building a solid foundation that has weathered many storms. You’ve all seen it grow and evolve over the years and the foundational culture that you’ve created together has helped drive that success. Being thoughtful about your departure is like adding that final coat of varnish on the house that will help team members seal and protect that foundation as they carry on in your absence.
This article originally appeared on Forbes.