Jim Krampen and Justin Tysdal, co-founders of Seven Corners, in Carmel, Ind., made a radical decision last year about their travel insurance company.
Related: Disruption in the C-Suite
Having run the business for 20 years, the two leaders realized that they personally were stunting the organization's growth. They decided it was time for a C-suite shakeup. "[Krampen] and I realized we were a decision-making bottleneck," Tysdal told me via email. "Instead of having two co-founders calling all of the shots, we brought in C-level executives with the experience to scale a business."
Since then, the company has hired three new C-level and seven director-level employees. As a result, Seven Corners' online rating has improved nearly 300 percent. While theirs was a difficult decision. Tysdal said, he knew they had to put their company first.
"If the right person isn't in the right seat, a change is necessary," he said. "As entrepreneurs, Jim and I have a unique and valuable skillset. While we can conceptualize and pursue new markets and channels, we are in no way suited to scale a business."
Of course it's not always obvious whether leadership change is the right move. Here four reasons why a startup should consider a C-suite shakeup:
Better understanding of customers
Despite being in the business of women's lingerie, Yandy, oddly enough, had no female C-suite executives. While many fashion, retail and e-tail brands have predominantly male management teams, there's something so personal and intimate about women's lingerie, everyday intimates and swimwear that practically called out for a woman's particular point of view.
That's why current CEO Thom Brodeur stepped in to make a change at the Phoenix-based company.
"One of the first moves I made when I came on board was to permanently place our vice president of merchandising, Pilar Quintana-Williams, at the executive table," Brodeur said via email. "She has since brought her invaluable merchant experience as well as her strong vision around the female consumer to the team."
Takeaway: Understanding and meeting customers' needs means being able to comprehend the personal experiences a product gives them. So, consider each unique demographic you're trying to reach and compare those people to your C-suite members. If no one in the C-suite reflects those unique experiences, switch up the demographics to add the personal touch consumers and employees expect from the organization.
After witnessing almost a 100 percent change in her former team when a new executive took over her CEO job, Kristin Savilia, now CEO of the wholesale marketplace JOOR in New York City, understood the importance of shaking up the executive order.
"In my past company, the change brought in new opinions and new direction. We had a plan previous to the changeover, but [we] were having trouble executing it," Savilia said via email. "Fresh ideas on how to take on the challenge helped us move more quickly."
While the change-up was necessary and beneficial, Savilia noted, some previous team members, including herself, stayed on. This was important, in terms of helping the new CEO understand the industry and company history and to prevent the reoccurence of previous mistakes.
Takeaway: Remaining stagnant in C-suite leadership can slow innovation and problem-solving. But bringing in new leadership means welcoming fresh ideas and solutions. Mix new executives with previous team members to stay innovative, but remain cognizant about past mistakes and how not to repeat them.
Well-rounded skill sets
Sometimes, shaking up the C-suite means looking at what is best for the company and possibly taking a step back. That's exactly what Dan Hanrahan, founder and president of Sigstr, in Indianapolis,said he did for the sake of his team.
"After serving as CEO for three years, I made the transition to founder and president and brought in a new CEO, former Salesforce chief product officer Bryan Wade, to fuel the next stage of growth," Hanrahan said. "Bryan and I are complementary -- I get to focus on new levers for growth, like building partners and new channels, while Bryan focuses on vision, scale and product leadership."
Together, Wade and Hanrahan used their individualized talents to build something bigger than either of them could do alone.
Takeaway: New leadership adds to the diversity of skillsets in the organization, allowing current teams to put their best talents to use. Look for personality and skills gaps within your company to decide what type of executive new hire is needed.
No matter how much we personally like the leaders on our team, sometimes companies and their leaders evolve in separate directions. And a shift like this can divide a company, causing irreparable damage.
In 2016, social media management company Buffer ran into just this issue when it changed its focus. "We decided to focus on growing sustainably, slowing down hiring, raising the bar for product quality over shipping frequency and innovating our culture to create an empowering environment," Hailley Griffis, public relations specialist with Buffer, in Toronto, told me via email.
Not everyone was on board for those changes: "Our COO and CTO didn't feel aligned with this vision for the future and decided to move on," Griffis wrote.
Still, although this type of sudden change was likely difficult, Buffer's leadership team found it necessary, to align their vision for the future. "It's still quite early, but our CEO has already expressed that the clarity of this single, unified vision for the future of Buffer has already proven so valuable for the team as a whole," Griffis continued.
Takeaway: As a company evolves, be honest with team members about where your company's future is headed. This will help everyone assess who still fits with company goals and missions -- and who is headed in a different direction. If needed, bring on a new C-suite member to help realign the company and unify its vision.