Ep #095: Navigating CEO Transitions: Strategies for New CEOs and Exiting Founders with Matt Sharrers
Navigating CEO Transitions: Strategies for New CEOs and Exiting Founders with Matt Sharrers
In this episode, we delve into the world of leadership transitions with Matt Sharrers, an expert in CEO succession and advisor to private equity firms. Learn about the critical strategies for new CEOs, the importance of a shared exit plan among business partners, and how to navigate the emotional and practical challenges of stepping down. Whether you’re a founder preparing to step aside or a leader ready to take the reins, this episode offers invaluable insights and actionable advice.
Welcome to Business Exit Success, the podcast dedicated to helping small business owners transition out of their businesses on their terms while living a life of purpose and fulfillment after the sale. I'm your host, Certified Financial Planner, and Certified Exit Planning Advisor, Tom Poltersdorf.
Introducing Matt Sharrers: Expert in CEO Succession
In today’s episode, we are joined by Matt Sharrers, a seasoned coach to CEOs and advisor to private equity firms. After successfully appointing and developing his own successor at his previous company, SBI, Matt now supports other leaders through critical transitions, whether they are stepping down or stepping up within a company. Matt has authored a new book called "The Second CEO: Accelerating Scale When Following the Founder," which provides a roadmap for CEOs who inherit the reins from a company’s founder.
Becoming a Second CEO: Matt Sharrers’ Journey
Tom: So, Matt, welcome to the show!
Matt: Thanks, Tom. Appreciate it. And that was a very kind intro, so I'll try not to disappoint.
Tom: You bring two interesting perspectives to the table today. First, as a second CEO coming in and taking the reins from an existing founder, and second, as the CEO having to find and groom a successor to take over your role. How did this happen for you? What was your role in the company, and did you even want to become a CEO?
Matt: I was a senior partner at SBI, a company we started in 2006. Our CEO, Greg Alexander, decided in 2016 that he wanted to step down. We discussed succession, and I realized that despite my initial fear, I could take on the role. Greg passed the torch to me in 2017.
Strategies for a New CEO: First-Year Insights
Tom: What key strategies did you implement in your first year as CEO?
Matt: The first year boils down to three main strategies: establishing the culture you want to build, defining the business strategy, and building your team. You need to be the best version of yourself, not a derivative of the founder. Narrow your focus to improve execution and scale, and change about 75% of your team to align with future goals.
Overcoming Challenges and Building Relationships
Tom: How did you navigate the transition and communicate your strategy to the team?
Matt: Initially, I didn’t do it very well. I had to lay off 10% of the firm in the first six months, which was a wake-up call. Hiring a coach and coalescing with current partners helped stabilize the situation. It’s crucial to make decisions that are right for the business, not just for individuals.
The Role of Coaches, Mentors, and Peers
Tom: How did you leverage coaches, mentors, and peers during your journey?
Matt: Hiring a coach, joining peer groups like World 50, and seeking mentors who had gone through similar transitions were invaluable. They provided support, best practices, and a sounding board for ideas.
The Importance of Scorecards in Measuring Progress
Tom: Can you explain the concept of scorecards and how they helped you measure progress?
Matt: Scorecards define roles with future-focused objectives, competencies, and accountabilities. They provide clarity on what each person in a role is responsible for, which is essential for maintaining accountability and measuring progress.
Preparing to Follow a Founder
Tom: What advice would you give to someone preparing to follow a successful founder?
Matt: Be gentle with yourself in the first year, spend time listening like an outsider, and trust your gut when making decisions. It's essential to build credibility and make strategic decisions that are best for the business.
Transitioning Out: From CEO to Coach
Tom: What were the most significant challenges you faced stepping away, and how did you manage them?
Matt: The emotional challenge was the concept of not being needed anymore. However, focusing on family and having a clear plan for my next chapter helped. It’s important to have continuity in the business and identify the right successor to ensure a smooth transition.
Final Thoughts and Future Plans
Tom: What are your plans for involvement in the business exit process going forward, and how are you helping CEOs today?
Matt: I coach CEOs, sit on boards, and invest alongside private equity firms. My goal is to help CEOs reach their full potential and bring my experience to support their growth.
Tom: Thanks, Matt. Your insights are invaluable. For listeners, links to the resources mentioned will be in the show notes. Thanks for joining us on Business Exit Success.
Resources:
Matt Sharrer's Website: https://mattsharrers.com/home-2/
Matt's Book: The Second CEO: Accelerating Scale When Following the Founder
Leadership Advisor Consulting: https://ghsmart.com/
Founders Community: https://hub.eonetwork.org/
Founders Community: https://tiger21.com/
Book: Halftime: Moving from Success to Significance
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