There will come a time in the life of most successful companies when the owners must turn over control to someone else. It’s not an easy task but usually a necessary one. That’s what Charter School Business Management’s (CSBM) founder/CEO, Raj Thakkar found out when he handed over CSBM’s day-to-day responsibilities to president/COO, Karen Daniels. In November 2012 and 2013, Crain’s NY Business named CSBM one of the Best Places to Work in NYC.
“In my experience, start-up is all about survival. You’re building the car while driving it very fast. That type of bold and fast-paced decision-making and action is very difficult to continue once you have established your organization and built a strong reputation,” says Thakkar.
What helps the transition is already having an able staff in place who can run the company in any situation. “I was fortunate enough to have recruited a very strong team of capable people who helped me see that. As a result, in 2013 I made the decision to let someone else run my company. I was fortunate enough to have the perfect person for the job in-house,” notes Thakkar. “Karen Daniels is now our president and chief operating officer and it was the best decision I’ve ever made. I still play the role of visionary, but now I lean on Karen to implement it in a way that solidifies our reputation and grows our organization, providing the stability needed to make sure our organization stays around for the long-term.”
But there are signs when it is time for a major change. Thakkar felt them. “It kept feeling like I was getting in the way of my own team,” he shares. “I would often poke my head into meetings to get involved in projects and provide direction. Decisions had often already been made and my interruption took away valuable time from delivering on our clients’ needs. I asked lots of questions and the team kept telling me: we got it, we got it. I was lucky to have a very strong team of people in my organization and this made me realize that I need to trust them.”
Another sign is when you can no longer manage all the day-to-day tasks. “When you start a business, you’re the one delivering the service, making the sale and implementing the mission. The larger the organization becomes, the more you have to let go of those things and focus on strategy, operations, systems and infrastructure. This, I think may be the first clue that a change is needed,” says Thakkar.
Another important sign it’s time to step down is when the company outgrows your start-up mindset. “During start-up, emotions and creativity drive every action. Survival is as exciting as it is daunting. As the organization grows in complexity, it becomes frustrating when you try to institute change but it takes longer because your organization has shifted. It’s no longer in start-up mode and your actions now have many more implications than they once did on your clients, your team members, the market and even the industry,” explains Thakkar. “If you’re paying attention, you begin to realize that once your organization is established, your start-up tactics threaten stability and actually undermine growth. You now have to think about creating systems while maintaining the culture that was a hallmark of your start-up success.”
If you are not sure it’s time to step aside, seek help. Thakkar did. “For me, getting external guidance from an executive coach was key. I began working with a coach who has 30 years of experience guiding the leaders of hundreds of very successful organizations. My coach helped me analyze how I spent my time and which activities were the most effective for the organization and in alignment with my strengths,” he says. “I realized that a lot of my time had been spent focusing on all of the wrong things, based on the stage the company had evolved to. Once you know, it’s easy to make an immediate change.”
For Thakkar, letting go has given him a chance to help the company in other ways. “I realized through this process that I’m not the system builder, but Karen is. Now, I get to focus on what I love: building and strengthening the relationships, working with my team to develop new services, developing new client types and expanding our geographic reach, which is a very key role in the growth of my organization. Karen focuses on ‘today’, while I focus on ‘tomorrow,'” he says.
Let Go In Steps:
• Know when it’s time to move on. “It’s time when you are no longer able to focus and execute the core elements of your business. As CEO, your focus should be 80 percent on seeking capital/sales and 20 percent on lesser tasks. Also, move on when it is difficult to go to work because you hate it,” says Robert Smith of Robert Smith & Associates, a business growth and marketing firm.
• Trust. “I like to trust but verify. If you have a great team, you have to trust them and also put systems in place that will streamline the communication of key data on finances, clients and staff,” says Thakkar.
• Seek advice. Get someone to take an objective look at how your company is operating. “An executive coach can also work with leaders about the effect of not being needed in the same way as you once were. Sometimes, it may feel like you’re barely needed. I had to realize that I may not be needed for day-to-day matters, but I am a crucial component of securing our future,” offers Thakkar.
• Get help. You may need help in finding the ideal leader for your company as well as assist the staff with the transition. “Hire a successful CEO or operations manager who is a good communicator. Someone who will keep you in the loop as you begin to phase out of some of your responsibilities or from the company entirely,” says attorney Dr. Shawn Council.
• Prepare yourself, staff and clients. It will be an emotional time for everyone–especially you. “Become friends with your successor. You pick your replacement or partner and make sure you get along and communicate well,” says Council. “Help define or redefine the company mission and let your customers know that you will still be the brand of the company.”