Replacing a Founder: Darlene Mann, Siperian

Many entrepreneurs have to face the issue of recruiting an outside CEO for their beloved venture as the business starts to scale. Most struggle with the decision. Here is an Interview with a friend, Darlene Mann, who I know has done an excellent job with her role as an outside CEO coming into Siperian, replacing another friend, Ken Hoang, Siperian’s Founder CEO.

SM: Please describe the situation under which you were introduced to a company to replace the founder as the new CEO. What company? What size? Who introduced?

DM: I was originally introduced to Siperian through a friend serving on Siperian’s Advisory Board. I was the independently approached by VC’s seeking to form a Series B syndicate and interested in identifying a CEO to join alongside the Series B funds. The company was about 20-25 people at that point and pre-revenue.

SM: How did the Founder receive the introduction?

DM: Ken was very personable and enthusiastic about Siperian. I believe when we first met, he was uncertain if he was really ready to relinquish the CEO role. When we met again, a month or so later, he seemed clear he was seeking a CEO and was clearly trying to find the best person for the position.

SM: What were the qualities of the Founder? What were your qualities? How did you complement each other?

DM: Ken is brilliant, but understated in his demeanor. He has a unique ability to identify opportunities in markets that stem from the presence of new technologies. He also extends and, not surprisingly commands, great loyalty in his relationships. However, Ken sometimes struggles to communicate clearly and was not particularly comfortable being open, honest and direct with people when I met him. I complemented Ken by using my reasonably deep technology and marketing background and a well-developed, thoughtful set of general management skills to help him make more of Siperian than it would be with either one of us on our own.

SM: What were the difficult, sensitive points of your interaction?

DM: I think the most difficult time was before Ken knew me well enough to really trust me. In particular, when he had to resign his BOD seat and I told him I wanted him to be CTO and not VP Engineering, I think he was very concerned. Happily, we learned to trust each other very quickly and then the challenges were more in keeping aligned. We never had major disagreements, but there were times that I had to push him and he had to push me…but it was done with respect and trust as a backdrop so we managed through our disagreements in a healthy way.

SM: What were some of the nuggets that you used to make the situation work?

DM: First, I made sure I was clear with Ken about my philosophy about founders, and that we had alignment around expectations. I didn’t want to get into a position where I was going to be at war with the founder. I really believe that founders have a unique influence on a company – sometimes positive and sometimes negative. That act of initial creation is a wonderful thing and deserves real respect. However, a founder has to be committed to pulling his weight every day going forward and not presuming his status as founder buys him special privileges – special responsibilities, yes. Special privileges, no.

Second, I promised him that I would treat him as my partner in the business and I followed through. I did not take major decisions without talking to Ken first. I kept him informed and I was honest with him at all times.

SM: What didn’t work?

DM: Things worked fairly well. If I were to do it over again, I would probably have looked for ways to get Ken to express himself with more conviction when he had strong views about a subject. It took me a while to learn how to read Ken, and had I understood his “laid back” style sooner, I would probably have benefited from his counsel earlier in our relationship.

SM: What mistakes did you make?

When I first joined, there was a very limited management team. We were able to build a great team and Ken is an important part of that team. I asked Ken to be CTO and to run Product Planning and Marketing for the first couple of years. I probably should not have asked Ken to take on that much, as it was very hard for him to do a good job of CTO as well as the full PPM position – and that made it harder on Ken as a member of the team. And, because Ken was such as good team player, he never complained. In the future, I would be careful not to overburden the founder (or any executive, for that matter) with too much for too long.

SM: What mistakes did the entrepreneur make?

DM: He didn’t complain loud enough about the things he was concerned about.

SM: Your advice to CEOs considering taking a job to replace a Founder?

DM: Determine quickly if the Founder(s) can be your partner(s) or are going to be adversaries. If they are adversaries and you still want the position, make sure you can exit them quickly and cleanly from the company. If they can be your partners, work hard to build the trust relationship early on, so you can transition from worrying about each other to worrying about the business – that’s where the attention needs to be. If possible, consider bringing in an OD person early to help you and the founder understand each other as individuals, your working styles, and where you might have issues.

SM: Your advice to Entrepreneurs considering bringing in an outside CEO?

DM: Practice self-awareness. Try to understand what the company needs in terms of leadership and interview for those qualities and skills. Try to understand the individual’s values as much as their experience.