Earlier this month, Business Week had an item entitled “The Temp in the Corner Office.” It described a “rise” (from 2 in 2004 to 9 last year) in the number of large companies using interim CEOs as a bridge between two “permanent” CEOs. (The most ironic one is Kelly Services, the big temp agency that hired Carl Camden as its own temp CEO. Here’s an example from academia that hit close to home.) The article, citing Leslie Gaines-Ross of Weber Shandwick, stated that these interim CEOs averaged 159 days on the job.
This brought to mind our recent blog-dialogue on Bridge CEOs. In my initial post on it, I mentioned John Reed, who has played an interim role in several start-ups wherein he comes in for 18 months, institutes some processes and changes that the founders are not able to effect, and then leaves the company in the hands of a more permanent CEO so he can move on to his next Bridge position. In essence, John should have “Bridge CEO” as the title on his business card with a blank line to fill in the company’s name.
In that post, I asked if anyone knew of similar Bridge CEOs - outsiders who recurringly come into start-ups for a set period of time and help them transition to post-founder leadership. (John himself did not know of any others.) Martin Martens pointed to Deja.com, where Guy Hoffman from Austin Ventures stepped in to act as the bridge between the founder-CEO and the “IPO stage” CEO. (Has Mr. Hoffman played similar roles in other start-ups?) In addition, in two cases we teach in our MBA course, African firm Celtel and Boston firm E-Ink also happened to use interim “hired-gun CEOs” during transition periods, but not in the same, planned way as with John Reed.
Side note: E-Ink is an interesting (and relatively rare) case of a founder’s being promoted to CEO to replace a non-founder CEO. After teaching the “E-Ink” case in April, I had an intriguing lunchtime chat with Russ Wilcox, the E-Ink founder who later was promoted to CEO, about how he tried to use the time that the “professional CEO” was running the company to prepare himself for the CEO role.
A final tidbit from the Business Week story is that shares of companies led by interim CEOs outperformed an index of “peer organizations” by 8.1%, though the small number of such cases (13 interim CEOs in 3 years) leads me to be cautious in placing much stock in this number. In the start-ups realm, we could examine whether the same is true — i.e., do Bridge CEOs outperform founder-CEOs who try to lead their companies through that intermediate stage of development? At the same time, Les suggested that exactly the opposite (“Bridge CEOs are often doomed”) could be true. An eminently testable question … if we can find more Bridge CEOs to study!
Here’s a website that you might very interesting for your musings.http://www.ceo-net.com/about.htmlCarl Camden, CEO, Kelly Services
Quite interesting, indeed — thanks for the pointer to them. When my time frees up, I might drop them a line to set up a chat.Continued best of luck at Kelly!
Actually I’ve played the “bridge” CEO several times and at least one of them was very successful- so not all situations are doomed. The question is one of the relationship and chemistry between the founder and the CEO, but especially the financial position of the founder. In my situations where the founder CEO was able to take some money off the table along the way, he was much more amenable to giving me the freedom to make decisions that he might not have made - which paid off big time for him and the investors. In another case, where the founder CEO was not made liquid, every decision was questioned, leading to my ultimate inability to make headway. Jury is still out on the outcome.
Reminds me of that HBS case on Randy Komisar and the discussion about “Virtual CEO.”http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=898078
I agree about the overlap with “Virtual CEO” — thanks for pointing it out! In fact, in the founder-related MBA elective I’m developing (itself possibly a subject of a future blog-post), I’ve penciled in that case in my “Bridge CEO” slot … at least until I can find/develop a new case that more squarely covers the core Bridge challenges. (Having done “Virtual CEO” as an MBA student, I have fond memories of Randy’s coming to class to discuss the case with us.)
Hi Noam -Guy Hoffman also served in a Bridge CEO role at iSong.com and he may be in the same type of role in his current position as CEO of Metallect (www.metallect.com). You should try contacting him. He was quite helpful in my research.