Resolving CEO Transition Conflict

A venture capital (VC) organization had a significant interest in a promising software firm in Silicon Valley. As members of the board of directors, they were witnessing problems occurring as the leadership transitioned from the founder-CEO to a new CEO. The VCs were unsure what the root of the problem was, but they suspected that the founder was having problems letting go of the company. They contacted RHR International to assist them in understanding and resolving the issues before they would affect the business.

RHR consultants interviewed the founder, the new CEO, and a sampling of employees to get a clear sense of what was happening. The interviews indicated that the issue was not about the founder letting go. In fact, he was being quite cooperative and reasonable about the process. The interviews also revealed that the new CEO had alienated a large number of employees. Based on what was learned during the interviews, RHR did an in-depth executive assessment of the new CEO.

Given the organizational culture and environment, the assessment indicated that the new CEO was not a good fit for the position. The RHR consultants shared their findings with the VCs and other members of the board and made recommendations. On receiving the recommendations from RHR, the board terminated the new CEO.