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Times are tough. We are seeing a financial environment where the global markets for initial public offerings (IPOs) seem to be on life support. This is despite some hope of a revival in the U.S. and cautious optimism about the pipeline in the Middle East, and down rounds for privately held companies are becoming more and more commonplace. The recent tech layoffs and liquidity wobbles at several high-profile banks have also fueled uncertainty about the future across many industries.
While cashing out might not be as simple as it was in the boom years, leaving a company you lead in the best possible shape is still as important as ever. More than anything, your exit can potentially define who you are professionally for years to come.
A rocky exit can potentially tarnish your name with partners, investors, peers, and teams you manage, causing exponential damage for a significant chunk of your career. Your professional reputation is a key determinant of your future employability as a sought-after executive or advisor. It also often defines your ability to fundraise for future ventures.
The stark truth is that you don’t have to be Elizabeth Holmes, the former CEO of health-tech company Theranos, a media darling eventually turned media’s favorite villain, to have past controversies haunt you. (Luckily, Holmes’s case is unusual. Her controversy turned into allegations of conspiracy to commit fraud, aimed at misleading investors and regulators, which then turned into criminal charges). Things, of course, don’t have to go so wrong for you to influence your future in a big way still.
To avoid hurting your reputation – your greatest asset – careful stakeholder management is key when an exit is on the horizon. It might be time to consider your exit strategy more closely after an important financial milestone like a successful M&A deal. It’s also possible that you are contemplating leaving because greener pastures await. Whatever the trigger, you want to ensure that you’re leaving things on a high without burning bridges.
The first thing to do is to define the goals you want to achieve with your carefully laid out exit plan. These might include facilitating a smooth transition, preserving the company’s stability and reputation, and setting the stage for its continued success under new leadership.
Being fully transparent — at least internally — about the reasons you are leaving, your plans, your contribution to the company and the transition process is crucial to avoiding rumors or even conspiracy theories in some cases.
Carefully consider your communications with staff, investors, consumers and other stakeholders. The tone of these communications would depend on your specific circumstances, your company’s culture and the stakeholder group that is your target audience. Usually, though, a friendly and open approach works better than dry corporate language or — more recently — content drafted by ChatGPT.
Choosing and grooming your successor might be your responsibility, or it might not. It is also possible that you and the incoming CEO won’t see eye to eye. Whatever your relationship is behind closed doors, showing a united front publicly will be important for the company and your reputation management.
Ensuring minimal to no damage to the company you lead is a core component of a successful exit. In addition to not showing any indications of strife among top executives, you would also need to undertake some due diligence, document all of the key decision-making processes carefully, and create a framework for your successor to help him or her hit the ground running.
It is also important to always be mindful of how you refer to your former colleagues and the company – both in public and in private conversations. Avoid any criticism, even years after you leave, as the negative narrative could be damaging to your legacy and may even be seen as a sign of weakness.
While this might seem intuitive, not fighting the process is also important and should make things easier for everyone involved. Work with the board, get referrals and listen to recommendations to help keep your legacy and that of the company you helped build or grow fully intact.
Keep in mind that there is always a chance — however small Ø of a badly needed triumphal comeback. For example, if the new CEO does not live up to the expectations of the Board, investors, or consumers, you are the best person to step in to save the day. After all, Disney CEO Bob Iger was reappointed to the top job more than two years after leaving the company, even though he said that he would not return to the role.
Most importantly, however, enjoy that well-deserved gardening leave once the dust settles. It’s a much-needed calm before the storm and a time to kick back, reset and enjoy some quiet time once your exit is complete before embarking on the next chapter of your professional career.