Understanding Founder-CEO Successions: A qualitative analysis of driving factors behind founder-CEO successions in Swedish growth firms

Abstract: Founder-CEOs play a key role in the startup journey, but as the company grows, the role of the CEO changes and eventually, most founder-CEOs are succeeded by a professional CEO. While founders are not always considered to be suitable for managing a large complex organisation but rather known for their entrepreneurial spirit, there is little understanding of why founder-CEOs leave, or are forced to leave, their position. Through 10 semi-structured interviews, this thesis takes a qualitative approach to gain an in-depth understanding of the driving factors behind founder-CEO successions. Interviews were conducted with founder-CEOs and professional CEOs of high-profile Swedish companies in a growth phase. Using the Gioia methodology, findings are structured into themes and dimensions, and with the theoretical lens of 'four stages in the life cycle of an entrepreneurial firm' (Picken, 2017b), the research results in a framework with driving factors behind founder-CEO successions. The framework consists of three dimensions of driving factors: growth, personal and external factors, and evaluates the role each dimension has, as well as the relationship between factors within each dimension. The external factors, such as requirements and pressure from the board, often contribute by initiating the succession. The growth factors are related to growth of the organisation which present challenges for the CEO. Lastly, the personal factors are underlying contributors which impact the other driving factors. Especially unwillingness to develop into the role is crucial in both affecting and triggering other factors, thus significantly contributing to founder-CEO successions.