Business leaders have some big questions to answer: how do you keep the culture alive through periods of change? How do you make sure you're handing over to the right people in the most coherent, smoothest way possible?
The most high-profile departure in recent years came in November, when Twitter co-founder Jack Dorsey resigned, leaving CTO Parag Agrawal in charge. After 16 years at the helm, Dorsey claimed that keeping a company founder-led was ‘severely limiting and a single point of failure’ – something many Twitter shareholders had been saying for a number of years. Simon Mottram, who co-founded cycling brand Rapha in 2004, also stepped down in November, saying it was the right time to bring in ‘a new CEO with the skills and experience to take advantage of the huge opportunity Rapha faces.’ Last summer Elle Huerta, who founded wellbeing app Mend in 2016, announced she was stepping back. About the CEO she chose to pass on to, Sara Shah, Elle said ‘passing the torch to her feels so natural, as if it was always the plan.‘
A thorough handover
Kate Glazebrook co-founded Applied, a recruitment platform, in 2015. She served as CEO until 2020, when she handed over to Khyati Sundaram, who had previously been head of product at the company. Kate and Khyati worked together closely for a few months to ensure a smooth handover, focusing on three key aspects: trust, team and relationships.
‘Khyati needed to know that she wasn't walking into a series of hidden challenges, and that I'd give her the space to create new things and do things her way,’ Kate says. The pair also gave the team an opportunity to ask candid questions, as well as spending time with customers, investors, suppliers and other external stakeholders that are pivotal to the smooth running of the business.
‘The reality is that the strengths you need to create a company are quite different to the ones you need to scale it. It's OK to be great at one and not the other,’ Kate admits. Khyati also recognizes that part of her role is continuing what Kate started: ‘As the founder, Kate was incredibly passionate about Applied, so this energy and enthusiasm is something I try to bring to work every day,’ she says. ‘I'm a colleague, not just a CEO. I lean on everybody's expertise and I value their skills highly – and this level of collaboration is something that Kate also cultivated.’
When things don't go to plan
Of course, when there's a change in leadership, things might not always go smoothly. That's what Paul Hemings and Cara Ceppetelli learned. The couple launched BIRD, a fried-chicken restaurant brand that they grew to four locations in London over six years. They built not only a profitable business, but also one where they could put staff's needs first.
‘Cara and I ran the business autonomously – we had investors, but they had no input into the business,’ Paul says. ‘When we decided we wanted to restructure, our original shareholders grew splintered and we took on a new investor. That part happened relatively quickly – it was a case of getting married and getting to know each other after.’
Paul and Cara quickly found that their new investors didn't share their perspective on the human side of the transaction, and they stepped away from the business as a result. The people who'd helped to grow the business with them also left soon after. Now, they're starting a new health-tech business and applying what they learned from their transition away from BIRD. ‘Our takeaway is that we didn't spend enough time understanding the values and morals of the people we were about to do a deal with. When you bring someone onto a team, you have to ask: could I be stranded in an airport with them for eight hours? That's the test.’