L. Duksaitė: CEO of own business – a death sentence?

When I talk to my managers, I have a strong desire to hand over the helm of my company when the time comes. Especially at 55 years old. But easy to say, hard to do. Although there are ways:

• sell your business
• transfer to a family member
• hire a manager

More than half would like to transfer

When we did a Masterclass Lithuania survey and asked if you have recruited a CEO from the outside, only one third answered positively. That is, two out of three do not have an external CEO at the helm of the company. While more than half are considering and would like to relinquish the burden of management.

The number of those employing an independent board member is even lower, just a quarter. Although more than half are also considering it.

Children are often the successor to the CEO

It’s hard to let a “stranger” into your own business. So it’s not surprising that it’s not uncommon for the offspring of parents to become the heir apparent in the business. Parents invest in their children’s education and see them taking over the business, continuing the family business line. However, in reality, that daughter or son does not always want to take over the parents’ business. Maybe they would like to be in charge – but they don’t like the fact that it’s, say, some kind of window manufacturing or construction – maybe they would rather be in charge of a start-up or their dream business.

The third way is the one I usually come across: hiring an external manager.

Hired CEO

If the cards don’t work out with family members, there comes a time when the manager has to find an external successor. Not all CEOs want to work until death. So they have to hire first.

And first times are often not easy.

Because there are a lot of corners to cut and a lot to learn. And for a first-time shareholder. And for a first-time manager working with that shareholder.

Often a shareholder really wants to step back. And he tries. But it’s not that easy. Owning your own business is like having a baby. Who can take care of it better than you? What if the business goes off the rails, loses momentum, or worse, goes bankrupt?

So it’s important to just realise that such polishing is natural and give yourself time. After all, both sides are doing something completely new that they have never done before.

What helps to hand over the helm to the CEO?

• trust credit
• to be wrong
• understand that it is natural that no one will take care of you in the same way as yourself – it will be different but not necessarily worse
• A functioning board – I find that if a company has independent board members, they act as a great mediator and balance between shareholder expectations and the work of the hired manager.