Page 13 - Harvard Business Review, Sep/Oct 2018

CASE STUDY CAN I STEP BACK FROM MY START-UP?

a little burned out from shareholder in the company even as
years of 24/7 work, she needed—and she ceded day‑to‑day control. How difficult will it be
wanted—a change. She was ready It made sense on paper. Christine for Elena to strike this
to step down as CEO and possibly to was smart and dynamic and seemed balance? Is such an
sell the company. But after months of passionate about 2 Proud Pups. Her arrangement feasible?
research and meetings, she still hadn’t references had raved about her.
found the right successor or buyer. But Elena couldn’t help feeling that
Bzzt. Elena looked at her phone something was missing—hence the
again: three more e‑mails and texts. It follow‑up call.
was time to get back to the office. She “Thanks for taking the time to chat
eased onto her feet and whistled to the with me again,” Elena said.
dogs. “Broccoli! Maggie! Time to go!” “Happy to!” Christine replied. “I’m
excited about this opportunity.”
“That’s good to hear,” Elena said.
NEW CEO, NEW COMPANY? “As you can probably tell, I feel really
Walking into the 2 Proud Pups office, protective of the 2 Proud Pups brand.
Elena unleashed her dogs and greeted One challenge with a new CEO would
Kelly, an employee of three years. be maintaining all the relationships we
“How’s today’s delivery coming?” have with suppliers, customers, and
Elena asked. stores. How would you handle that?”
“Almost done,” Kelly said. “I told “Honestly, I love making new
them I’d be there this afternoon.” connections. Ideally, I’d shadow
“Great. Thanks.” Elena glanced at you for a month to meet all the key
the time. “Shoot—I have a call now.” contacts, and then I’d keep up with
Kelly’s smile dimmed. “Another calls and visits. I’d assure them that
interview for a new you?” 2 Proud Pups will be business as usual.”
“Yes.” Elena sighed. “But this is a “But I can’t help wondering—will
really strong candidate.” it be business as usual? Last time,
She walked into her office. On her when we discussed where you want
desk was a pile of résumés from CEO to take the company in the future, you
candidates who’d responded to a mentioned targeting Amazon, Chewy, Petco and PetSmart,
listing she’d posted on a small‑business and Petco.” which owns Chewy, are
sale website. Clipped to each one, at “Well, if the idea is to put it on a major players in the pet
Elena’s request, was a photo of the growth trajectory, I think we’d have to products market. But
applicant’s dog. go after those big players. It would be a Amazon has more than half
She’d spoken to all of them by multiyear strategy, and we might need of online sales, according
to Packaged Facts—and
How thorough has Elena phone, but only one seemed close to outside investment. But I think we e‑commerce is projected
been in her CEO search? a good fit: Christine Reed, a 35‑year‑ could accomplish it while maintaining to make up 20% of the
What more could she do to old MBA whose previous experience existing distribution.” market by 2022.
source candidates? included stints at a cosmetics start‑up Christine paused. “But Elena, this
and a global consumer products obviously works only if we’re on the
company. They’d already met for same page. The deal we discussed
coffee, and Elena had liked her—and would make us partners, even if you’re
her bulldog, Rembrandt, who’d joined stepping down from management.
them at the café. She and Christine had You’d have to trust me to take the
discussed the history of 2 Proud Pups, company where it needs to go.”
its financials, and the terms under Elena felt a little queasy. Christine’s
which a new CEO might join the firm. vision for the company did sound
Backed by an investor with whom promising from a financial standpoint,
she’d worked before, Christine was but it just wasn’t the 2 Proud Pups that
ready to take a 40% equity stake. She Elena knew. Still, she tried to hide her A company’s culture is
would accept the same modest salary discomfort. “This search is all about often heavily influenced
Elena had been earning and would finding someone who will bring a by its founder. How might
accrue more shares each year. Elena different perspective to the business, a new CEO change the
had hoped to divest a larger chunk of and it’s clear you can do that. But this culture at 2 Proud Pups?
her holdings—she and Matthias were is a big step for me, so I hope you can
keen to buy a bigger house and set up a understand if I take some time with it.”
college fund for the baby—but she also “Of course,” Christine replied. “Just
liked the idea of remaining the majority know that I’m ready when you are.”

146 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018