When my co-founder and I started talking seriously about transition, the reactions we got ranged from ‘Why would you?’ to ‘How could you?’ to ‘There is no way you will find someone!’
Reasonable reactions, given that very few founders in the development sector attempt a transition and even fewer document their experience–irrespective of whether it’s a success or failure.
By our sixth year, my co-founder and I had proven a model, and built a team and an organisation to deliver that model. Our reasons for transition were several: aspirations for UnLtd India to scale and to bring on a leader with the skills and experience to do so; our own personal aspirations for new adventures; and my co-founder’s health challenges.
Our first attempt took us more than a year and was an absolute failure. Disillusioned, I decided to stay on, moving from being a co-director to CEO for three more years.
The next time we discussed transition was in our tenth year and I was determined to do a better job of it this time around. I gathered every piece of information and advice I could find from across sectors. I also promised that I would write about our experience in the hope that it would be valuable for other founders looking to transition.
Please note that the following steps and key learnings cover the phase from ‘having decided to transition’ to ‘on-boarding your successor’ and NOT the post-transition phase.
1. Understand why you want the transition: Spend time to get clarity on the motivation. It could be organisational reasons of needing a different kind of leadership or it could be a personal reason like your desire to move on. Understanding the ‘why’ will help you assess whether transition is the right answer. It will also help you to articulate the messaging to others and plan a time frame.
2. Identify key milestones for transition: Ask yourself, ‘What do I need to put in place, for my successor and the organisation to do well?’ This could include a financial goal, a critical team hire, a clear strategy for growth or even putting a specific system in place. Identify only priority milestones and not an exhaustive list of everything you wish for the organisation.
3. Explore your future role: Do you want to continue setting the vision and strategy for the organisation, post-transition? Do you want to be the face of the organisation? Do you want to remain on the board? How much time would you be spending on the organisation?
4. Think about the board’s future role: In the early stages, founders often appoint family or trusted friends to the board. Hence the board tends to rely on the founders to set and safeguard the vision, provide operational oversight and raise funding. Transition brings an opportunity to assess the future role of the board and any changes required in the composition and responsibilities.
5. Get buy-in from the board: Since boards tend to be heavily invested in the founders, it is critical that they understand the rationale for transition and support you and your successor through the transition period. It also critical that they agree and opt into the evolving role of the board (See point 4).
6. Have a communication plan: Draft a clear communication plan targeting the team, current funders and key stakeholders. The plan should include when and how you intend to tell them, your key points, and how you are likely to address the key concerns of all these groups. Get your board to approve the plan.
7. Get the team’s buy-in: This is the hardest part. I first spoke to the senior team and heard various concerns, such as mission and culture drift, team churn and change in growth trajectories. While many of these concerns become real only when your successor joins, it certainly helped the senior team and me to talk about how it might play out and how it could be addressed. These discussions helped in the next phase where we met each functional team with their team lead. We repeated the same process. I then met with the whole team together and made sure that they were on the same page.
- Don’t be afraid of the conversation. Listen carefully to the team’s concerns.
- Ask your team to keep the news confidential. Give them talking points if someone asks them about it.
- Some members might decide to leave because of the transition. See if there is any way to retain them. If you can’t persuade them to stay, be gracious and support them in their search for the next role.
8. Agree on the non-negotiables: Recruiting a CEO is the most critical hire you will ever make. Hence a regular job description will not suffice. Take the time to create a detailed matrix of the experiences, skills and beliefs required. Rank them in the order of priority, from ‘nice to have’ (read not necessary) to ‘must have’ (read non-negotiable). If you have ranked everything as non-negotiable, start again! Make sure the board and your senior team are on the same page.
9. Get buy-in from current funders: I was wary of this conversation for fear of the funders pulling the funding. There is no easy way around this. Talk to each of your current funders, explaining the rationale, desired profile of the successor, your role going ahead, risks and how you will address them. Also ask them for advice on the transition process. Make room for special requests. For instance, they may ask you to remain as their key point of contact. Remember, they have invested in your work and hence have the right to protect it.
10. Assess internal candidates: Internal versus external is a perennial debate. Internal candidates are best where there is a complete fit to the required profile or where the organisation has the time and resources to build their skills in certain areas. Where neither of this fits, go for an external candidate. It is best practice to open up the process to internal and external candidates, and choose the best option. However, there is a likelihood of internal candidates losing motivation or quitting if they are not selected.
11. Design the interview process: The process must have various aspects:
- Allow key stakeholders to give and hear inputs on the candidate–you could include stakeholders beyond the team and the board, such as beneficiaries/customers and long-term partners.
- Give the candidate opportunities to learn about your work from diverse sources.
- Make efficient use of everyone’s time.
12. Identity the transition duration and plan: The transition period is the time that the founders spend alongside the successor. The duration depends on your successor’s readiness to hit the ground running, and the board and your comfort at letting go of the reins. This period can also taper down from you being full-time in the office to remote full-time to part-time to minimal. The period may increase or decrease once you see your successor on the job. The idea of the transition plan is to immerse your successor in the organisation.
13. Document: This is a critical part of transitions. Often, under the founders’ leadership, a lot of information on why and how things are done is stored in people’s brains. Documentation of processes and learnings is limited to either a few high-level documents or a few functions within the organisation.
Post-transition, your successor will likely make a few changes. So, documenting the organisation as it stands today allows your successor to grasp how things are done, the rationale behind them, and enables them to make informed decisions about any changes in the future.
It might not always be possible to document everything. So, prioritise key aspects that must be completed during or ahead of the transition period.
14. Introducing your successor: There could be different approaches to this. Here is what worked well for us:
- Inform the team only when your successor has signed the contract.
- Make introductions to key stakeholders on mail ahead of their joining date. Follow this up with in-person meetings jointly held with the CEO and the founder/s.
- If there is an upcoming public event, include a formal introduction to the CEO.
- The last step is announcing the recruitment to a wider community via newsletter or social media.
Keep at least two months between the person joining and the last step. By this time, you would have made personal introductions to key stakeholders and given enough time for your successor to get a deeper sense of the organisation and vice versa.
15. Balancing act: During the transition, you have to be conscious of the following:
- Being there as a guide/support even as you give the CEO space to explore the organisation’s work for themselves.
- Facilitate interactions with key stakeholders while allowing the CEO to form their own relationships.
- Ensure that the CEO feels comfortable to share thoughts and recommendations, but make sure no major or critical decision is taken until the transition is complete.
- Most importantly, safeguard the vision even as you give the CEO autonomy to paint the vision as they see it.
The big thing to know is that no matter how carefully you execute the transition, it is a tumultuous period. There will be unexpected challenges (big and small). I am yet to hear of a transition that went as per plan. However, the good news is that if everyone prioritises the organisation’s well-being, it often turns out fine.
Lastly, remember to take care of yourself. When the day came to walk out of our offices one last time, the transition suddenly became very real. I felt a mix of exhilaration, pride, relief and anxiety. It struck me that through the transition period, the last person I took care of was myself.
Letting go of your baby and a decade’s worth of work, can be quite a roller coaster ride of emotions. You might end up beating yourself up for things that you didn’t do or could have done better. In those moments, remember that you gave it your best with all the information you had. Hence, be kind and gentle to yourself. Take the time to rest, reflect, rejuvenate until you are ready to go out into the world as a beginner again.