Spotlight on Replacing a Chief Executive Officer

Recently we were contacted by one of our private equity clients about doing a replacement CEO search for a CleanTech portfolio company. Replacing a CEO is a decision that poses a big challenge to board members. They care about the CEOs they work with, but they must also optimize the value of the companies in which they invest.

This specific startup had been operating for over five years and gotten through the proof-of-concept phase, but they had no recurring revenues. The current CEO had done a great job of adding talented people in positions where they could be successful. However, this CEO did not have the industry expertise and relationships to reach the company’s potential. 

The Board decided that the answer was new leadership. Most CEOs are deeply committed to the companies they lead. This case was no different. The Chairman of the Board had a discussion with the CEO to let him know that we would be looking for someone with industry expertise to commercialize the business, and although the CEO was disappointed, he understood, and being a shareholder himself was willing to help with selecting his replacement. 

For the Westwood & Wilshire team, the most important place to start this search was by interviewing the Board of Directors and Leadership Team. This helped us gain a deeper understanding of the business and the issues the new CEO would be facing. We provided the insights that we gathered from those meetings to the Chairman of the Board without giving specific details on “who said what” and focused on how the team saw the business and its future. 

Then, we set out to work with the current CEO, leadership team, and Board of Directors to define the most important attributes, roles, and responsibilities for the new CEO. Working through this process helped everyone get on the same page and know exactly what type of “unicorn” we were looking for. 

Next, we launched the search to find the right candidate. After researching the market and numerous conversations with candidates vetted through a strong interview process, the successful CEO was selected. What differentiated the winning candidate as the right fit, beyond his skills and experience, was his ability to integrate with the current team without ruffling too many feathers.

Many clients tend to gravitate to candidates who look great on paper.  In our experience, the best candidates may not have a perfect resume, yet possess the skills and attributes to excel in the role. In this case, we were able to find the right mix of industry experience, startup growth experience, and a strong strategic and tactical capability that is rare in the CleanTech space. 

The replacement CEO has been a hit with the Board of Directors as well as the team, and has been able to impact the company in a positive way in a short period of time!

To find out more about Westwood & Wilshire’s CEO Practice and/or to learn more about our core industry verticals (FinTech, HealthTech, SaaS Enterprise platforms and ClimateTech/CleanTech), contact Annie Collins, annie@westwoodwilshire.com.