C-Suite Search and Succession
Whether you’re a founder looking for a new CEO to take your company to the next level or you’re looking to replace current people in your C Suite, leadership succession demands planning and preparation. Too many SaaS and FinTech companies underestimate the importance of leadership succession, which can often lead to a breakdown in employee, brand, and shareholder confidence.
When done correctly, C-suite succession can inspire confidence in investors, business partners, employees and customers, leading to significant growth and profits.
Why is succession planning important?
Succession planning and internal promotions
Succession planning is identifying individuals who will fill key leadership roles in the future. It covers a period before a leader leaves an organisation or moves into another position so that they are ready to be replaced. It is a proactive strategy that ensures a smooth leadership transition and maintains organisational continuity.
Succession planning aims to identify and groom potential candidates with the necessary skills, knowledge, and experience to take on critical leadership positions.
People rarely stay with a company for their whole working lives; this is the same for C-suite executives. A KornFerry study of 1,000 of the largest US firms by revenue showed the average tenure is 4.9 years for C-suite roles, with some CXO roles having even shorter tenures. Despite this evidence, surveys by the Rock Centre for Corporate Governance at Stanford University unveiled that only 54% of boards were implementing measures to prepare for new C-suite successors. With the rise of executive mobility, including remote working, the need for succession planning has never been greater.
Companies often choose to promote from within and develop their talent for C-suite positions; however, this strategy is not always the best.
According to Forbes, “Chief executive officers promoted from within a company don’t perform nearly as well as ones recruited from outside. That’s what a new study by Vell Executive Search found. The study examined 51 CEOs and their companies’ revenue growth, focusing on publicly owned technology outfits based in New England with $100 million or more in annual revenues. Externally hired CEOs at companies with over $1 billion in revenue brought in a median three-year revenue growth of 99%; their internally promoted counterparts achieved only 35% growth. Founders, which were concentrated in smaller companies, outperformed both groups.”
Many challenges come with C-suite hiring, some of which vary depending on what type of experience a company is seeking. If a business is looking to hire someone with previous CEO experience, the focus is often on aligning the company’s strategic direction with the candidate’s expertise and vision. This makes it a highly strategic hire. On the other hand, if a company is considering hiring a first-time CEO, the emphasis is placed on their past accomplishments and how they directly relate to the company’s objectives. Companies need to decide whether they need direct CEO experience in their newly appointed CEO or someone who may not have direct CEO experience but has skills which are more useful for their business.
Depending on the goals, a preference might exist for a background biased towards sales, operations, or finance, making it a less straightforward career path than roles like Chief Revenue Officer. Moreover, the emphasis is usually less on the company’s product or service and more on the stage of evolution and strategic objectives.
CEOs are typically brought in to drive strategy, develop roadmaps, and explore potential paths to exit, whether through acquisitions, IPOs, turnarounds, or shareholder-driven growth. These skills are difficult to demonstrate without tangible evidence, creating challenges when qualifying candidates. In the case of startups, the CEO must have experience leading fundraising rounds and be well-connected in the private equity and venture capital community.
Additionally, the search for a CEO is often research-intensive. Since their roles and achievements are publicly visible, a long list of candidates can be narrowed down before the approach and interview processes begin. Finally, given the significance of C-suite decisions, the hiring process is usually meticulously structured and thorough to ensure that all parties involved are comfortable with the decision being the right move.
Oakstone International is an expert in leadership succession and works with many SaaS and FinTech companies to find them skilled, experienced, and strategically driven executive leadership. We work with you to establish and find what you need to drive your business forward.
We understand that hiring executive leadership can be a sensitive subject, which is why Oakstone always approaches C suite hiring with the utmost care and confidentiality. Not only does Oakstone handle established CEO, CFO, CMO or other CXO roles, but we can also help you scope fast-emerging new roles and new business competencies, leadership skills and profiles.
Oakstone International are much more than an executive search firm. We work as an extension of your company to find the right people for critical, strategic executive leadership hires.