As a follow up to my previous posting, here are all the possible outcomes of a founding CEO replacement. Imagine you have three coins you can flip. The first coin has "stays/leaves" on its sides, the second "keeps old title/gets new title", and the third coin "friendly/unfriendly". Toss all three coins, and look at the results.
1 - Stays/keeps old title/friendly
This is what the founder AND the investors really want, but as you know, sometimes the founder CEO really has to be replaced.
2 - Stays/keeps old title/unfriendly
Now nobody, but nobody, wants this! Somehow the board is stuck in the mud, the company prospects are pretty dim.
3 - Stays/gets new title/friendly
This is what the investors dream about. The founders usually cringe at this, few of them have the fortitude to go through this for the good of the company, and frankly for their own good (the founder is usually the single biggest shareholder). Jerry Yang (from Yahoo) is a good example, he has been through the CEO cycle twice!
4 - Stays/gets new title/unfriendly
A very common degradation from outcome 3 over time: first, the founder as a good soldier accepts a new role. But slowly (or not so slowly), he/she really balks at the new direction (you guys are killing the company!).
5 - Leaves//friendly
Also known as "graceful ride into the sunset". If 3 cannot be achieved, this is the next best outcome. The founder leaves the company, but keeps the goodwill of everybody involved, and usually keeps helping the company.
6 - Leaves//unfriendly
Alas, more common occurrence that anybody would wish for! Acrimonious email exchanges usually climax in a pouring out of pent-up resentments from all sides. The best then is to get a cool head to settle things down. Rarely does this go in front of a judge, but s.. does happen.
So, brave founder CEO, know that your number might come up one day. Pick your choice ahead of time, or bring three coins to your board meeting....
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