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Aligning a Board, a Founder, and a New CEO

By Svein Olsen Mellemstater, Partner

I WAS TASKED WITH RECRUITING AN EXTERNAL CEO TO REPLACE AND CO-OPERATE WITH THE FOUNDER OF A STARTUP COMPANY WITHIN THE MEDICAL DEVICE SECTOR.
THE COMPANY’S BOARD OF DIRECTORS WAS CONCERNED THAT THE FOUNDER WOULD NOT ALLOW THE NEW CEO TO MAKE THE NECESSARY ADJUSTMENTS TO SECURE A SIGNIFICANT RETURN ON INVESTMENT.
THIS PRESENTED A UNIQUE CHALLENGE. ON THE WHOLE, FOUNDERS OF COMPANIES TEND TO BE VERY PROTECTIVE OF THEIR OWN INVENTIONS. THE CHALLENGE HERE WAS TO ASK THE VERY PASSIONATE FOUNDER OF THE FIRM TO STEP ASIDE AND LEAVE HIS BABY IN THE HANDS OF THE NEW CEO. HOW COULD WE CREATE THE NEEDED TRUST BETWEEN THE FOUNDER AND THE NEW CEO? AND HOW COULD WE KEEP THE BOARD HAPPY AT THE SAME TIME?
IT WAS A BALANCING ACT THAT REQUIRED A LOT OF PRECISION, INVESTIGATION, AND OPEN COMMUNICATION THROUGHOUT THE ORGANISATION. I HAD TO WORK BOTH SMART AND HARD TO ALIGN THE BOARD WITH THE FOUNDER ON THE NEW ROLE OF “FOUNDER” AND THAT OF THE CEO TO BE HIRED.
TO ACCOMPLISH THIS, WE INSISTED ON MEETING WITH THE FOUNDER AND AS MANY BOARD MEMBERS AS POSSIBLE. WE ENGAGED IN MANY FACT-FINDING DISCUSSIONS SINCE WE NEEDED TO FULLY UNDERSTAND THE EXPECTATIONS AND CONCERNS OF ALL PARTIES INVOLVED.
AS IT TURNED OUT, THESE INTERVIEWS EXPOSED A GAP IN EXPECTATIONS, AS WELL AS IN THE PREFERRED PROFILE OF THE NEW CEO. WE WORKED CLOSELY WITH THE ORGANISATION TO GET EVERYTHING IN ORDER BEFORE EMBARKING ON THE ACTUAL SEARCH.
TO HELP SECURE MAXIMUM ALIGNMENT ON THE ROLE DESCRIPTION AND THE AUTHORITY OF THE NEW CEO, WE SPENT A LOT OF TIME ON THE RECRUITMENT PROFILE. IT WAS AS DETAILED, THOROUGH, AND PRECISE AS POSSIBLE.
THE RESULT? WE RECEIVED SUCCESSFUL SIGN-OFF BY ALL MEMBERS OF THE BOARD’S HIRING COMMITTEE. WITH THAT MESSAGING AND ALIGNMENT SET, THE SEARCH FOR A CEO COULD BEGIN. THE BOARD, FOUNDER, AND EVENTUALLY THE NEW CEO WILL HAVE A CRYSTAL-CLEAR UNDERSTANDING OF ROLES AND RESPONSIBILITIES.
THE COMPANY IS SET ON A CLEAR PATH FOR A SUCCESSFUL RETURN ON INVESTMENT, AND THE FOUNDER WILL HAVE AN OPEN, COLLABORATIVE RELATIONSHIP WITH THE SOON-TO-BE CEO.

Changing a company’s revenue source and culture cannot be done overnight. By creating a long-term plan, sticking to it at every decision point, and trusting in the proof of a scientific hiring process we were able to have a material impact on the business. After 6 years of working with Mercuri Urval the client said ‘thank you for helping us to transform our business.’ This was not done through one overarching project but through a series of interventions that were developed and adapted in line with the business’s changing needs.

Svein Olsen Mellemsæter, Partner & Director
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