Eight Steps to Successfully Managing a Founder Transition

Photo: Alex Counts

The departure and replacement of long-tenured Chief Executive Officers (CEOs) of international humanitarian organizations are clearly complex and often go awry. When the CEO is also the founder, the situation becomes even trickier. The issues involved are not unique to social change organizations, but they are perhaps more pronounced. Egos can get bruised, feelings hurt, and people struggle to function in new roles, in part because they are not properly supported. Mission focus gets blurred, if not temporarily lost. 

I announced in May 2015 that I was in my final year as CEO of Grameen Foundation, which I established in 1997 with the support of Nobel laureate Professor Muhammad Yunus. My goal was for our founder transition to be a model for how it can be done effectively and gracefully. I wanted to do it in such a way that the mission remains paramount and everyone involved feels valued, respected, and part of making the organization better and healthier during and after the process. This post is meant to summarize what we learned by providing some practical advice to others managing such a transition. 

  1. Develop a framework for the CEO’s succession well in advance of anyone contemplating the transition. This should be done with input from the CEO and one to three board members. This can complement an emergency succession plan, in which the CEO outlines his or her recommendations to the leadership in the case that he or she suddenly dies or is incapacitated. Don’t underestimate the strong forces, both psychological and practical, which often cause people to put both of these exercises off. 

  2. In most situations, it is best if the CEO voluntarily decides to not serve on the organization’s board after stepping down as CEO, at least for a few years. Having the CEO on the board during their successor’s early years can make things uncomfortable if not untenable for the new leader. By taking this role off the table, the board does not have to spend time debating the wisdom of inviting the departing CEO to stay on the board. 

  3. It is important for the CEO to signal to staff and the board that he or she has no interest in trying to control the organization once the CEO role passes to his or her successor, or even to an Interim CEO if one is identified to manage the transition. This helps make it clear who is in charge at any given point in the process. However, the outgoing CEO can and should share their point of view about organizational matters with the remaining leaders, especially when asked to do so. When decisions are made and announced that the departing or departed CEO is thought to likely disagree with, it is important that they stay silent or signal that they will support the decision (even if they may not agree with it).    

  4. Figure out what aspects of the transition are most important to the key parties involved, and structure it to address those desires as much as possible. For instance, a departing CEO may have a strong desire to shape how the announcement of his or her departure is made, or to have access to archives (for perhaps writing a memoir) or to soon-to-be former colleagues. 

  5. If there is a prolonged transition, which is often a good idea if the organization can afford it, set up the outgoing CEO to contribute to advancing the mission in tangible and visible ways. These can include raising money, advising the interim and permanent successor, writing a comprehensive and confidential transition memo, assuring stakeholders publicly and privately about the qualifications of their successor once named, and helping to organize a farewell gala with robust fund-raising and celebratory components. 

  6. Assign people to check in on a regular, even weekly basis with key people involved in the transition. For example, the board chair or head of human resources can talk weekly to the departing CEO to see how the transition was going from his or her perspective, and also share their own views. This helps ensure that small misunderstandings – which are inevitable – do not fester and grow into larger issues, and also that course corrections can be taken throughout the process. 

  7. While the views of the departing CEO should be solicited on the recruitment and selection of his or her successor, including them on the Search Committee is generally not a good idea. The incoming CEO should feel allegiance to and chemistry with the people who will be staying, most importantly the board that he or she will report to, rather than the person who is leaving. 

  8. If all sides are interested and agreeable, attempt to define an ongoing role for the outgoing CEO towards the end of the transition, especially if he or she is a long-tenured founder. This role should allow the founder to contribute in ways that work for everyone involved, and that add value. It must be something that the incoming CEO is comfortable with, and can review and change over time if needed. This role could include conferring a title like President emeritus; having the departing CEO continue to represent the organization on the boards of aligned organizations and industry working groups; contributing to the organization’s blog on a regular basis; or mentoring staff.*

I do not believe that all of these steps are appropriate for every organization going through a transition. However, I think many of them are good practices that should be considered and modified to suit an organization’s particular situation. Nor was our own process without a few hitches. But we worked through them.

I am thankful that Grameen Foundation approached this transition so constructively and practically. Above all, keeping egos, zero-sum thinking, and gossip to a minimum allows everyone to focus on mission and the future as much as possible, despite the fears and uncertainty that come with such a transition. Open discussion at all levels helps keep negativity and worries in check.   

I welcome comments, input and ideas from readers who have had their own insights about healthy founder transitions.  


*Editor's note: This paragraph was updated by the author on 12/29/15 to add specificity to the role of the outgoing founder.