9 fun ways to screw up a CEO transition

Perhaps you are a buyout shop or a VC partner, or maybe you chaired the CEO search committee for your board - chances are that the reason you decided to bring on new blood at the top is that the company was not performing to potential. Maybe the old CEO had the wrong chops for the new stage of company development, or perhaps the market shifted under him - whatever the reason was, the deal is done and your new guy starts next Monday. There are so many ways you can help this person fail! Let's go through a few, shall we?

Photo: Reuters

1. Fail to set out clear expectations 

It really would be all too easy if you just told your newly minted CEO that your problem is eroding margins, or stalled  revenue, or unexpected marketshare loss to competition. Of course, you do plan to measure your new person on the one key metric that concerns you, but why tell him? He is a smart guy, so of course he'll figure it out on his own. Let's just give him some guff about growth, customer satisfaction or staff retention. Won't it be fun to watch him race down the wrong track out of the gate? And sure, what we really want is to sell this loser business the second that the numbers will permit it, but why tell the CEO? We will just fire him when he fails to make the business sellable. His exit package will be a small price to pay for all the fun.

2. Set out wrong incentives

The company has been bleeding staff, its Glassdoor rating is beneath the floor, no one wants to come to work for it, execs are leaving, and the real reason we fired the last CEO is that his style was so toxic that it jeopardized everything we had invested in this business. So now, let's write the new girl's package so that we pay her inventive comp on maximizing sales and margin! Won't it be fun when she tightens up the screws to meet what she thinks (haha!) are our expectations? Why, we can just watch the stream of staffers running for the exits turn into a flood! Of course, it will be the stupid CEO's fault for not realizing that we really want is for her to lose her bonus and instead fix the toxic culture before worrying about the returns. She'll take one for the team, won't she?

3. Circumscribe the CEO's authority

Sure, we just went though months of hellish effort to find just the right person to take up the reins of this benighted business. We think that she's the best that we could find, but naturally, no matter what she thinks, we know that we know better, don't we? Let's make her jump through fifty hoops before we approve new policies, strategic changes, staffing shakeups, reorganizations! Let's make her justify each step and then drag our feet or else just fail altogether to approve them! It will be such fun to watch her squirm! Better still, let's just set out some sacred cows that the new girl just cannot touch: the culture of the company is sacred! (but the company can't seem to get product out the door); the C-suite cannot be changed in any way! (after all, we picked them to be our people, nevermind that they undermine the CEO in every way they can). We can have such laughs while the new girl is tearing her hair out! When the damn business fails, it will be her fault, won't it?

4. Undermine, undermine, undermine!

While we are on the subject, we can use the excuse that we need to know what's going on in the trenches to ignore the hierarchy and just assign work, priorities and schedules direct to middle managers. Won't the CEO be so mad when she finds out? We can bad-mouth her to staffers, because it will be such fun to watch her lose whatever respect she'd had and with it all ability to manage! Why should she know what her people are actually doing - we know better and our desires are so much more important than whatever a mere CEO might be thinking! We can sow mistrust by interrogating the mid-level staff - after all, they know what's really going on, much better than the CEO can, right?

5. Expect a miracle, or two

Our new guy walks on water - of course he does, he told us so when were were courting him. So, it follow that we just ask him to conjure rabbits out of hats! So what if this company makes its money from, say, services - let's turn it into a software company! Of course we won't give it any more resources for the transition, we will ignore the business DNA, will underfund development and go-to-market efforts just enough that they cannot succeed, but we will measure the CEO on making this transition happen! Who cares if the real business of this enterprise suffers while we are chasing rainbows? We will just punish the new guy when results slip, that's all!

6. Block, prevent, ignore, expect results

Our new guy came with such great ideas! Too bad we aren't actually ready to let him do what we hired him to do, are we? Let's block every initiative that he promotes, ignore his insights, prevent changes - we do know better, don't we? But why would we reduce our expectation of results? Isn't that what we hired this guy to do? Where are our new sales numbers? Where is the expanded margin? Where is our exit, for Pete's sake?

7. Set up an adversarial board relationship

This CEO guy is our enemy, isn't that right? It's open season on him at every board meeting! So he wants to confer with us on strategy? Confide about something troubling him? Hold a strategic conversation instead of blowing smoke up our collective ass? These are just weapons we can use against him to advance our own agenda, which is so more important. He's not one of us, he won't be on our side! Let's keep from him what really matters - then we lead him by the nose and relish his discomfiture!

8. Fail to prepare ground

Ok, so we didn't want the old loser CEO to know we are looking to replace him. This means that no one in the C-suite can know either! We can't trust the bastards to keep their mouths shut, can we? We'll just surprise them when a new CEO shows up one day! Ok, so the CFO and the HR peon get to know - it cannot be avoided - but no one else! Won't it be fun to watch them scramble for the exits when the extent of the enterprise's troubles is made so evident?

9. Hire the wrong person as CEO

Ok, so despite our best efforts, this enterprise was underperforming before we hired the new guy. Who cares why this happened? It must have been the fault of the incompetents with whom we are surrounded. Why would we worry about ancient history? Thew new guy will fix everything! So what if the company's sales and marketing have been abysmal? We can hire an engineering leader to set it right! So what if the business can't pay its bills or collect receivables? A sales guy is the right new CEO!

Do you think there are more and better ways to screw up a CEO transition? I would love to hear your tales from the trenches.

Cross-posted to LinkedIn Pulse

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