When a CEO Steps Down: Next Steps for Your Business
CEOs can resign or be removed like any other employee, yet your business needs a plan if its leadership is going to step down.
Just today, Reuters reports that Target removed CEO Gregg Steinhafel after massive data breaches during the holiday season made headlines. While Target is many times larger than your small business, a CEO's departure can raise similar issues.
When the head of your business is gone, here are some simple but necessary next steps for your company:
1. Don't Panic!
There are always ripples in the market when a CEO leaves a company, the key is not to make those ripples into tidal waves.
In Target's case, the company's stock reportedly fell 3 percent after Monday's announcement, but Target remained steadfast that it was "the right time for new leadership." Your CEO's departure may not make national news, but your company shouldn't be shaken to its core. View the transition period as an opportunity for positive change.
2. Gather the Board and Evaluate.
Once your company has survived the shock of losing its figurative head, you need to gather the board of directors and re-evaluate your organizational structure. The business will likely need to elect a new interim CEO or have the board act in the CEO's place until a new CEO is hired.
This is also an opportunity to review the policies which may have caused your prior CEO to resign. Mozilla's former CEO stepped down in April over his perceived opposition to gay marriage after only one month as CEO, reports Reuters.
Take time in the interim period to make your next corporate move a powerful one, by emerging from your CEO's resignation with an organizational goal and purpose.
3. Hire Someone New.
Once you've got the organizational bulwarks in place for the next financial year, it's time to start looking for your new CEO. Perhaps like Microsoft's newest CEO, you'd want to hire from within rather than court those unfamiliar with your business.
Since your new CEO is going to be the corporate "face" of your company, you might also consider hiring someone who will smooth over any existing wrinkles in your business' reputation. If your business has been pigeonholed as a "good ol' boys" club, it may be time to consider a more diverse candidate for CEO.
Take your old CEO's absence as the opportunity that it is. Be deliberate and thoughtful in your company's next steps and move to thrive, not just survive.
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Related Resources:
- John Riccitiello Steps Down As EA CEO - Why, And What Now? (Forbes)
- Papa John's Racist Voicemail Spurs CEO Apology (FindLaw's Free Enterprise)
- Men's Wearhouse Ouster: 5 Lessons for Founders (FindLaw's Free Enterprise)
- AOL CEO Tim Armstrong's 'Distressed Babies': 3 PR Lessons Learned (FindLaw's In House)