MOVING BEYOND THE FOUNDER: TRANISTIONS THAT WORK

I once worked as VP of marketing at a software firm whose founder was suddenly incapacitated. Overnight, the company lost its north star. There was no succession plan, no clarity on decision-making, and no one prepared to step in. It took a full year for the family to identify a successor CEO — eventually, that turned out to be me. That year was marked by uncertainty: anxious employees, stalled projects, concerned clients, and a team unsure how to move forward.

At the same time, I was watching my own father, then in his late seventies, convinced he could run his company forever. As CEO of Ready to Fund (formerly Payroll Funding), a payroll lending partner to the PEO industry, I once again navigated that transition – this time from my father as founder to me as leader. Together, these experiences made one thing very clear: transitions are inevitable. The only question is whether you’ll be ready.

WHY IT MATTERS FOR PEOS

PEOs see this challenge all the time. Many of your clients are founder-led businesses where culture, decisions, and relationships rest heavily on one person. When that leader steps back — whether suddenly or by choice — it can create a ripple effect across payroll, employees, and client trust. Helping PEO clients prepare for that moment is one of the best ways to add value and ensure stability.

THE HIDDEN RISKS OF “NO PLAN”

Without a plan, succession defaults to crisis management. Decisions stall, clients get nervous, and employees start looking elsewhere. There’s a reason one of a CEO’s core responsibilities is to prepare for their eventual replacement. And yet, particularly in small businesses where the founder has “always done it this way,” there’s often deep resistance to putting a plan in place.

THE EMOTIONAL WEIGHT OF FOUNDER TRANSITIONS

Even when there is a plan, founders often resist it. Watching my father — and the founder of the software company — taught me how deeply identity and control are tied to the business a founder built. Recognizing this ultimately prompted my family to hire a consultant who specialized in family business transitions. He served as a kind of therapist for my father and me as incoming CEO. The best transitions recognize both the human and strategic sides of change.

PLANS FOR SMOOTH TRANSITIONS

Good transitions don’t happen by accident. They require foresight, communication, and structure. My father and I, with our consultant’s help, built an 18-month transition plan that identified where the business needed bolstering. Some PEOs I know have managed even longer transitions — spanning a decade — giving the next generation time to fully learn the business. That preparation matters, because each new generation steps into a different landscape and needs to be equipped appropriately.

One of the most important elements of our plan at Payroll Funding was leaning into the spirit and culture created by the founder. We developed a set of core values that honored our founder and created continuity. Later, our rebrand to Ready to Fund served as a visible milestone — a way to both honor our history and signal the next chapter. Done well, moments like these reassure employees and clients that change is intentional, not chaotic.

TOP TEN TIPS FOR A SUCCESSFUL TRANSITION

1. Start earlier than you think.
2. Build a bench of leaders who can step up.
3. Separate ownership from leadership.
4. Document the “secret sauce.”
5. Signal change with visible milestones (like a rebrand).
6. Bring in outside perspective when needed.
7. Do the math early — plan for the cost of a new CEO alongside payments to the outgoing one.
8. Communicate relentlessly with all stakeholders.
9. Honor the founder’s contributions without clinging to the past.
10. Think in decades, not quarters.

CLOSING REFLECTION

The best transitions address both the human and strategic sides of change. For PEOs and their clients, the most successful ones start long before they’re needed — turning what could be a moment of risk into an opportunity for a stronger future

If you or your clients are navigating this path, I’d be glad to share more about my experience moving from founder to new CEO.