Recently, a company developing novel electric mobility technology looking to spring the business into a new growth phase approached us for their CEO succession. Initially, the team of founders wanted someone who possessed a “big name” and a “big vision” as well as strong execution and industrialization skills. After assessing and deepening our understanding of the company goals and challenges, we presented a candidate list. But none seemed right for the job, in the client’s view, despite having solid leadership capabilities and applicable qualifications.
This is not an uncommon situation. The founder CEOs of DeepTech scale-ups – companies that develop breakthrough technology solutions through fundamental scientific innovation, which requires massive amounts of investment over extended periods of time before commercialization, such as vertical mobility, fusion energy or quantum computing – often honorably decide that an external CEO will be better suited for the job. Hence, they place significant efforts into their CEO succession processes.
But many organizations fail to extend an offer after rounds of interviews, and others reject lists of candidates entirely and go back to the drawing board. Why is that? A common trap is that companies often envision someone that “ticks all the boxes” for a combination of qualification and past experience—which doesn’t always translate into success.
A common trap is that companies often envision someone that 'ticks all the boxes' for a combination of qualification and past experience—which doesn’t always translate into success.
By limiting the search to a set of “non-negotiable” requirements, companies may fail to consider candidates who could fit the bill as strong contenders. Moreover, this significantly narrows down the candidate pool as the few CEOs who have led such amazing growth rarely aspire to do it twice. These executives will either want to stay at the big organization they have created, or they may not want to risk the reputation they built – after all, what is in for them but the hardships of leading another pre-revenue start-up?
Fortunately, companies that are bringing these unimaginable products to market don’t need to hit a wall in the process. Instead of trying to tick boxes for experience, search teams should consider the following five heuristics:
- Consider whether the CEO has to solve pressing challenges alone. Critical tasks that involve key stakeholders and require technical background can be tackled by others in the C-suite that report to the CEO. One common example is specific industry and technology expertise that is expected from the CEO but may be better provided by designated CTOs or CROs instead. Very consciously decide which experiences are not needed: Do we really need IPO experience? We can hire consultants for every step. Does the inspirational leader at the helm really need to know how to scale up production / enhance product performance / know what regulatory hurdles we need to take? Several clients have had remarkable growth under new CEOs who knew the right questions to ask and when to turn to an expert instead (and all those organizations have those experts!).
Keep in mind that the challenges your organization faces change from year to year and even from month to month. With the average tenure of CEOs continually dwindling, don’t search for the CEO that will be best suited to lead the company five years from now; search for the one that will get it there successfully (and will ideally anticipate and plan for the right moment to hand over the reins to the next leader, because they may no longer be the best leader for the state in which the company is!).
Assess your candidate’s potential to determine how they can navigate different scenarios as the business evolves. Egon Zehnder’s Potential Model analyzes individuals through four dimensions: Curiosity, Insights, Engagement, and Determination. These four leadership traits, when measured, helps the organization create the right conditions for the leader to reach their full potential and thrive as the business evolves.
Appreciate diversity in thinking: People who come from less traditional pathways and backgrounds, in particular, can provide the missing pieces to solve the puzzle of how to make new technology fly. In practice, this translates into caring less about degrees and industry experience. Additionally, filter for leaders who appreciate diversity in thinking themselves and are humble enough to turn to others to find the best possible solutions.
Finally, look for fearlessly ambitious, fiercely curious, growth-minded people, but with a very structured, process-oriented approach. All CEO successions we have supported in DeepTech have not only required someone with the big vision, but also someone who can make that vision digestible for the organization and external stakeholders. While there is of course no “one size fits all approach,” the right mind-set has proven to be one key to ensuring a successful and smooth CEO succession.
Finding the right CEO is a huge undertaking. DeepTech CEOs need to be tech evangelists, build organizations, processes and systems from scratch, acquire multi-million, sometimes multi-billion amounts in funding while development cycles are much longer than in other industries – but they do not need to do it all by themselves. There’s just too much at stake to firmly set on a checklist and risk passing on candidates who could lead the business to a trajectory of growth and success.