The views expressed by Entrepreneur contributors are their very own.
Every business reaches a point where its founder becomes the biggest obstacle to growth. That’s the time at hand over the reins to another person and step away.
I’ve seen this need for my web development company, Markupus, for the past few years. But in late 2023, it finally became clear: it was time to step away from operations and appoint a new CEO.
I had two options: hire someone new or promote someone from inside. Time was running out, and integrating a new face seemed time-consuming. At the same time, none of our current managers felt fully ready.
However, cultivating leaders internally is a part of our company culture, which led me to option #2. There were three candidates:
- Candidate A was responsible for operations. This person was my first selection for CEO. He took on the role at any time when I was away and was good at organising processes.
- Candidate B He was responsible for technical issues, had worked for the company from the very starting and had the biggest knowledge of our product.
- Candidate C he was in charge of sales and hadn’t been with us that long, so I hadn’t seen him in motion outside of his regular tasks. Honestly, I added him to fill out the options.
My gut feeling favored Candidate A, but I knew I needed greater than just a gut feeling. So I hired a skilled assessment firm to conduct an in-depth evaluation using global methodologies.
After we agreed on the key competencies to evaluate, they suggested a 3-step Assessment Center and business interviews to see the picture clearly, and that is what we did. So if you are in my shoes and seeking to select a successor, this process can offer you insight. Let’s get into it.
Psychometric test
Each candidate accomplished a questionnaire provided by the creator of the psychometric test. This was just the first stage of the Assessment Center. Before they interviewed everyone in person, the experts had to search out out what everyone was like “on paper.”
The test results described each candidate’s typical behavior, pondering style, and ways of coping with stress. The reports include leadership styles, preferred team roles, profession topics, and more.
However, no key conclusions have yet been drawn: the test results provided the experts with further material for evaluation. Then they moved on to other tools.
Business simulations
First, assessors gave our future CEOs a comprehensive document of knowledge to investigate. Candidates had some time to review the material and make connections. Then, they presented their findings to a mock panel that tested their ability to investigate information.
This exercise wasn’t just about calculations; it was also about seeing how candidates formed hypotheses and made decisions based on their analyses.
The second business simulation was a group discussion. As point A, the candidates had a limited budget and many company needs. They needed to fight for the resources of their departments, but also consider the good of the entire company.
Here, the evaluation team observed how candidates influenced others, who took the initiative, and who staunchly defended the interests of their department.
Competency interview
The last stage of the Assessment Center was the individual competency interviews. This was an essential step to substantiate or query the competencies that the experts observed during the simulation.
During the interviews, the assessor mainly asked the candidates to supply examples from their previous business practice, for example, to state a specific problem they’d encountered and how they solved it.
Business intelligence
The competency-based interview I mentioned was based on the candidates’ previous achievements, while the business interview placed them in hypothetical situations.
For example, a business consultant asked what candidates would do if the current CEO left without explanation and asked them to take over the company. What would their first steps be? What would their strategy appear like?
Reaction here was also essential. Does the candidate have an immediate response or is he confused? Everything was taken into account.
After all these stages, the evaluation team began analyzing a huge variety of results for each candidate. After a few weeks, they got here back with their conclusions—to my surprise.
The candidate I least expected turned out to be the best suited for the role of CEO
While all candidates had strong interpersonal skills, Candidate C stood out in competencies similar to strategic pondering and the ability to adapt to vary. His leadership potential also proved to be higher than the others. In addition, we shared a mutual understanding of the company’s direction, and he brought a proactive approach to the team’s routine.
Although he still had a lot to learn, Candidate C was our obvious selection at that point.
What happened to Candidate A, whom I favored? His ideal role, in line with the assessment, was to work with data, not to administer. He eventually modified profession paths and moved into one other field.
After receiving this report, I spent a month wondering the right way to proceed. But after some thought, I officially resigned on my birthday, February 29. A rare gift for a rare occasion!
On paper, I am still the CEO, but in practice, all decisions are made by the newly appointed CBDO, Candidate C, also referred to as our former Sales Manager, together with our Head of Development, Candidate B.
My role is now more of an advisory role. I dedicate one day a week to working with the team and solving any issues or questions that come up. The remainder of the week I will focus on my other ventures, which can give me more time to pursue new opportunities.
After nine years of being responsible for all the things, it felt strange to step back and help others understand things.
But guess what? It’s been almost five months since we made the decision, and the business hasn’t fallen apart! It’s doing well. More importantly, we have created a solid foundation for future growth.
So my fundamental conclusion is this: if you are doing something for the first time in your online business, all the time hire professionals to assist you to. Sometimes it should bring unexpected but more promising results.