You may not want to be thinking about exiting your company right now, but all the best CEOs should have an exit strategy in mind – even if you’re not planning to action that strategy for many years down the line. After all, our time on this earth is short – and our time in business even shorter. In 2013, the average tenure of a CEO was nine years. By 2017, it had shrunk to just five. One out of every seven CEO retirements in the last two decades or so was followed by the forced departure of the incoming CEO in the next three years, with performance cited as a key factor. Naturally, you’ll want to leave your startup in a better place than where you found it. Over the next few blog posts, we’ll look at how best to build your exit strategy.
The key is accelerating company growth at the same time – leaving a company on an upswing suggests confidence and stability, a building with strong foundations and it boosts your future prospects, wherever you should decide to go afterwards. But leaving on a downswing suggests the captain leaving the sinking ship first. Here are five key tips to accelerating company growth as you plan your exit:
Develop a top-tier management team
A top-tier management team, and a top-tier group of C-suite executives, will ensure that the incoming CEO will have a much easier time of getting to grips with things. Establish responsibility and accountability for each position, with a method of reviewing how things can improve. This will greatly help the incoming CEO after you establish rapport – whilst making the company stronger in the long term by building for growth.
Hire the right board advisors
Advisors on the board will have a key relationship with the new CEO; they will experience first-hand the CEO’s decision-making. A board with a wide range of previous experience in a variety of industries will also be well-equipped to suggest different methodologies, each coming from a place of understanding. And again, hiring the right advisors now will stand the company in good stead – their high-quality advice will build growth.
Build a three-year (or more) plan
A rushed succession process will damage both the company and your personal brand. As with everything in business, always plan ahead. Consider when you might want to leave the company, and plan for it at least three years in advance, which includes growth targets and hiring strategies. Include crisis planning, because after all, even the best laid plans can go awry. Communicate these plans with your board and start laying down the groundwork early – the sooner you build the groundwork, the more stable the foundations will be when the succession does happen.
Keep investors happy
By doing all of the above, you’ll also convince investors that you have the best interests of the company at heart. A sudden change of CEO is likely to rock the market, spook investors, and lead to loss of faith in the company – but build a strong foundation, and they will see a confident, energetic CEO who knows how to scale and build a company that won’t fall apart in their absence.
If you want to accelerate your company’s growth and maximise the value of a future exit then contact me ASAP to arrange an initial free and confidential call.
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