Dear SaaStr: What Happens to the Management Team When a New CEO is Hired?
You never know exactly what will happen.
However, at a practical level, I think you should plan on maybe 50% of the management team turning over if your company brings in a new CEO. Maybe more.
It just makes sense. The new CEO is coming in (x) first, to do “better” or at least new things and (y) to do it their way. Most of the existing management team is likely used to doing things the old way, and their way. So, the new CEO is going to change them out, and often very quickly. Often almost immediately. Especially if he or she believes they can bring in replacement resources that are good and will do things the way the CEO is used to doing them.
Yes, this is unfortunately potentially a large loss to the organization. But the board understood this (hopefully) when they made the change. And if the new CEO is very good, they will work hard to keep whoever is good and is 100% on board with whatever changes he or she plans to make … AND is willing to work the new way. The best new CEOs always work incredibly hard to keep their top executives and ICs when they start.
And generally, expect little to no changes in the rank and file in most cases. Most new CEOs focus on the management team first, and empower them to figure the rest out.
Still, expect half the management team to be replaced, gone, or at least topped within 6-12 months. At least, this what I’ve typically seen.
With the New CEO, it’s Their Way or the Highway. It has to be this way. There’s no time usually for anything else. The new CEO has to put points on the board pretty fast. And so, things and management especially will change.
…..
And a great deep dive on why CEO + Management Team harmony is so important here:
(highway image from here)
