In the last few months I have heard these words out of the mouths of several of my venture capitalist clients. I always know they mean
- at least one person thinks they don’t
- probably no one has told the CEO
- they’ve never had a direct conversation about what the “right” CEO would be like in terms of skills, activities, results or where this CEO is falling short
- someone wants to just fire the guy now
- no one really wants to engage in an honest process to find out

The challenge is, the questions and discussions should have started at the very beginning, before the company was funded and/or the CEO was hired. Inevitably when I get involved in a situation like this, I discover that the Board members have very different ideas of what the “right” CEO would look like — mostly based on where that particular Board member has been burned before. I guess venture capitalists are human, so they tend to try to avoid being burned in the same ways — but all too frequently that means they try to apply a “formula” to managing the CEO. This means they come in with ideas such as “the founding CEO can never manage the company long term” or “you need a CEO with sales experience once the company is selling product” or “at the first sign of trouble you should act to remove the CEO”.

I strongly recommend that the Board members specify and align on the skills the CEO needs to have for success, based on the business model, the skills and experience of the other team members, and the stage of development of the company. This “role/responsibility description” then forms the framework for hiring, giving feedback, and measuring effectiveness over time. (Attached is the generic CEO skills framework I start with in working with a CEO)
.CEO Comprev

At the same time that the Board and CEO are aligning on expectations, they should agree how and how often they will be evaluating performance. At least at the beginning of a relationship, I suggest checking in quarterly. We all know it is easier to receive feedback in a timely manner, while you still have a chance to address it. On an annual basis, perhaps in conjunction with the CEO’s review, Board members might want to encourage a 360, where data is solicited from the Board, the CEO’s direct reports, and key partners. Often it is helpful to have that 360 facilitated by an external party, to ensure both objectivity and confidentiality.

If you follow the process described above, it should be evident to all if there is a mismatch or performance issue. In my experience, most CEO’s who are in a role that doesn’t fit know it — the problem comes if they don’t understand or get a chance to address the issues. Agreeing up front on the criteria and following a logical process can greatly ease the angst of having to have the conversation on whether it is time for a transition.