Following in a Founder’s Footsteps: Tips for Engaging Legacy Employees
At Summit Leadership Partners, we often work with companies post founder-exit and, for better or worse, founders leave a cultural and relational legacy behind them. Culture is a key driver of organizational performance and employee engagement. As Simon Sinek wrote, “Customers will never love a company until the employees love it first.” While all employees play a role in defining a culture, leaders play a pivotal role in setting the tone and shaping the behaviors and values that make up a culture. Many successful founders are particularly adept at playing this role. We’ve all heard the stories of founders, like Apple’s Steve Jobs and Google’s Larry Page and Sergey Brin, who inspired growth and innovation while also shaping a company culture that attracted and retained employees. People join these companies for inspirational leadership and strong culture, and they stay employed and engaged longer when those elements remain over time.
Challenges of Retaining Legacy Employees
When a founder exits a company, the employees who remain have likely developed a personal connection with that leader. They may have regarded the founder as a mentor or friend, and their commitment to the company may have been influenced by their leadership. Consequently, engaging and retaining these employees after a founder’s exit becomes a major challenge for the incoming CEO. Turnover can be costly, particularly when the departing individual possesses valuable historical and institutional knowledge or is highly respected by other employees. Losing a key player can trigger a domino effect, leading other employees to disengage or leave, which can negatively impact the culture.
Strategies for Effectively Engaging and Retaining Legacy Employees
To address this challenge, new CEOs should consider the following tips:
- Identify the key players. Employees possess different levels of organizational influence and impact on the bottom line. One of the first steps should be determining which leaders and employees are most important to retain and why. Questions the CEO might ask: Who are the most scalable leaders? Which employees represent the biggest potential losses if they leave? How can we retain important institutional knowledge? Who are the influential cultural drivers or ambassadors?
While retaining employees is generally the goal, identifying high potential, high performing and high influence individuals allows the CEO and his leadership team to prioritize their energy on engaging, retaining and partnering with the right players. When done right, these employees can become change agents and key conduits to the rest of the company.
- Conduct “STAY” interviews. The CEO should engage in conversations with legacy leaders to understand what has kept them with the company and what factors will motivate them to stay long-term. These interviews can also be conducted by HR or senior leaders with key talent across the organization. These conversations serve as an opportunity to gather various perspectives on the organization’s strengths, pain points, and how employees are experiencing the leadership transition. Gathering input and insights upfront provides valuable knowledge to an empathetic and insightful CEO. One-on-one conversations also emphasize the message that the company aims to preserve what works while making necessary changes to improve.As always, knowledge is power. Gathering input and insights upfront can be powerful in the hands of savvy and empathetic CEO. One-on-one conversations are also an opportunity to emphasize the message, we want to keep what works and make changes as needed to make the company even better.
- Assess your ADOPTER to RESISTER ratio. Change is often met with resistance, but some individuals handle it better than others. During any organizational change, there will be adopters—those who readily embrace the change—and resisters—those who strongly oppose it. The new CEO should leverage key partners (e.g., leadership team, Human Resources) to determine which people, teams or departments might be the most change resistant. Who should they engage early on to act as ambassadors for their leadership and new ideas? Who might require more time and energy to get on board? Who might cause disruption or spread resistance? Understanding the ratio of adopters to resisters enables the CEO to plan their approach to engage each group effectively over time. It is essential to consider the context from a change management perspective, seeking to understand and demonstrate empathy towards all employees.
Successful entrepreneurial, high growth and founder-led organizations often have highly committed and driven employees. Companies are built through hard work, perseverance and teamwork aligned around a common vision; they are built by the people who work there. When a new CEO enters this context, understanding where the company has been and what has made it successful so far (e.g., leadership, culture, employee experience) is just as vital as seeing where it could go.