If your CEO loses the faith of the team, it’s time for him or her to go.
That’s one thing a board cannot tolerate, Union Square Ventures VC Fred Wilson writes on his personal blog, A VC.
It’s also the most common reason for Wilson deciding to remove a CEO from a startup.
If I think about the times I have had to remove a CEO, by far the most common reason was the loss of confidence of the team in the CEO. You get the call from one of the senior team members. They tell you that they are going to leave and so is everyone else on the senior team unless you do something about the leader. It is a palace coup. No guns are fired. But the boss has to go. And so he or she does. No Board can ignore that call.”
Wilson writes that no board can ignore that call.
So there’s a lesson in here for both CEOs and startup employees. For CEOs, realise that your employees are more important than the board. For employees, if there’s a consensus among the team that CEO isn’t the right fit, say something about it.