Succeeding at Succession – Raising up MPs & Becoming CEO

By | September 23, 2014

succession
A company can’t reach the milestone of celebrating its 100-year anniversary unless it can out-live its founder. In fact, it can’t even get to the lesser goal of outliving the founder’s retirement unless it pays attention to succession planning. This blog post is about the path Atomic took to reach this point.

A Multiyear Effort

Handing over responsibility and daily operations for our first and largest office was a multiyear project. We’ve now achieved the significant milestone of replacing me as founder in the managing partner role for Grand Rapids.

To be clear, I’m giving these phases names, durations, and significance retrospectively; the only “plan” I made was to achieve the goal, and the initial impetus to start was feeling overwhelmed.

False Start

In 2008 we were seven years old with about 20 Atoms in the molecule. I was selling all the work we did, planning capacity, actively involved in billable work (35% of my time that year), managing people, networking, marketing, wrestling with issues around growth, and working on broadening ownership. I got some help on some of these things, but what was on my shoulders was more than a full-time job (2,370 hours that year), more than I could do well, and pretty stressful.

We experimented that spring with bringing an experienced person in from outside the company to help with sales and strategic planning. It didn’t go well or last long. In hindsight it’s too bad I hadn’t done my research on long-lived companies, as promoting from within is one of their common attributes.

The upside of our failed experiment was that it caused other Atoms to realize how desperate I was for help.

Shawn Stepped Up

In the summer of 2008 Shawn Crowley saw the need, and probably an opportunity. His deeply-ingrained sense of responsibility likely made it hard to ignore and not take action. His expressed interest in and early work on implementing my “design matters” vision for Atomic from 2007 positioned him perfectly to start helping with sales. With no title, no raise, no job description, and nothing more than his natural drive and stamina, he apprenticed himself to me and learned the ropes quickly.

Mike Returns

Mike Marsiglia, Atomic employee #1, returned to the company after three years working in Boston. He and I both knew he was interested in a broader role than software developer. His MBA was a concrete manifestation of that interest. Wisely, I believe, he joined a client project immediately upon his return and spent his first year back at Atomic on a team.

In the summer of 2009 Mike’s project was ending and we pulled him into working closely with me and Shawn. His formal business education was a great complement to my self-taught knowledge, and he began immediately improving and extending the financial modeling I had always done. 2008-2009 were tough years to start being responsible for keeping our makers busy. The economy was experiencing what we now call The Great Recession. 2009 is the only year, thus far, that our revenue didn’t increase (it was flat). It probably wasn’t really any bleaker than 2001, the year we started, but the consequences of failure were much more significant.

The Triad

Shawn, Mike and I were given the internal nickname “the Triad”. It accurately represented how closely we worked together. Eventually I came to regret the name and the way I talked about the Triad’s role in company governance and operations. In hindsight, our three-way, close working relationship was an apprenticeship for Mike and Shawn, and it probably would have been better to characterize it that way. Triad implied a structure that was permanent, and would outlive the immediate need and the learning.

The years from 2009 to 2011 were challenging. Mike and Shawn had to navigate the transition from developer to company leadership and management. They had to figure out new relationships with makers who had always been peers. They needed to exercise some authority over people with longer Atomic tenures, and who were older. In hindsight, I didn’t fully appreciate in the moment how hard that must have been.

Ownership made things even more complicated. Ironically, one of the projects that having help from Shawn and Mike made possible was to implement on my plan for broadening ownership of the company. In the summer of 2009 we pulled the trigger and sold about 17% of the company to seven long-term employees, including Mike and Shawn. The ensuing interest, excitement, anxiety, and uncertainty, along with the formation of the Triad, destabilized existing patterns and relationships and caused some friction and painful growth.

One of the most important lessons I learned in this time period was the difference between the authority I could give a new manager, and the authority that their employees would grant them. The granted form is much more powerful. It’s also necessary based on Atomic’s culture. Given authority may be necessary, but it certainly isn’t sufficient. That was a frustrating thing for me to learn, even if it now seems obvious in hindsight. Managing partners need to earn the respect, trust, and confidence of the Atoms they manage; I can only influence that through good advice.

Working Independently

By the end of 2011 our team was operating very smoothly. Mike and Shawn were fully up to speed on sales opportunities and capacity planning puzzles. They began pushing me out of that work. They had been instrumental in handling some difficult personnel situations. I’d carefully watched them get mad at each other and resolve their conflicts. They were feeling the responsibility, and hence the concomitant stress, of the managing partner role. Somewhere along the line I’d given them VP titles and well-deserved raises. While we still used the term Triad, in truth it had begun to feel to me like we were a Pair+One, and I was the extra.

Transition

The years 2012 and 2013 were transition years. Atomic operated pretty smoothly. Our experiments in governance were successful and stable. Shawn took on the strategic initiative of integrating design into our service offering, breathing new life into that effort and pushing us forward again. After Shawn and Mike created a plan for our first expansion, Mike was instrumental in coordinating the launch of our Detroit office. Sales and capacity planning were old hat for them by now. There was still occasional friction, but it was clear to me that Mike and Shawn had earned the authority granted to them by their fellow Atoms. From 2009 to 2013, we had doubled the size of the company.

By the summer of 2013 I was able to take on temporary duties as managing partner in our Detroit office. I started working more strategically and intentionally on marketing. We took advantage of an acquisition opportunity to more fully implement our Michigan strategy for the company. All of these things were only possible because Mike and Shawn had Grand Rapids covered, could execute so well and so independently of me, and we worked so well together. All three of us worked more hours that year than ever before. I was feeling some deleterious effects of having been in the managing partner role for 12 years.

Pulling the Trigger

In January of 2014 I took the title of CEO, formally gave Shawn and Mike the title of Managing Partner – Grand Rapids, and started spending about half my time in our newer offices. It was a much harder transition for me than it was for them. I went from a job I knew well and had been successful doing, to one with no description. I had to curb my instincts to involve myself in problems and opportunities that were no longer my concern. I had to determine new ways of creating value for the company. I had three new managing partner apprentices to help and form relationships with.

Mike and Shawn, on the other hand, never missed a beat running Grand Rapids. They kicked off experiments to improve the work environment for Grand Rapids Atoms and make the job of managing partner in an Atomic office at scale more sustainable.

My transition has been challenging, but also exciting. It’s taken eight months, but I’m feeling more confident about my role now, and I’m on track to work 250 fewer hours this year than last.

Our Long Journey

When we started down this path in 2008, I didn’t expect it would take six years. And it felt a little funny, at the age of only 46, and with a company that was only seven years old, to even be thinking about succession planning at that time. (Perhaps tech companies live their lives in dog years due to the pace of change in the world we occupy?)

I’m quite happy where we are now, and that I started early. I’m incredibly fortunate to have had Mike and Shawn to transition into the MP role so capably. It has been, and continues to be, the closest, most effective team experience of my life.

Atomic has passed a big hurdle on our way to my 100-year goal. In honor of this achievement I’m going to celebrate with a one month, no-mail, no-work, no-calls sabbatical.
 

Carl Erickson (83 Posts)

Carl is the CEO and cofounder of Atomic Object, a software product development company with offices in Grand Rapids and Ann Arbor. Learn more about Carl.

 


4 Comments

Phil Nicholls on October 16, 2014 at 12:25 pm.

Fascinating read, like most of your blog, I find this very humbling and yet also very inspirational.
I wonder if you would be willing to share the story of how you moved from a company winning 1 or 2 projects to one with a steady stream of them – i.e. the transition from a couple of employees to six or seven? Thats the stumbling block I have at the moment!

Carl Erickson on October 17, 2014 at 10:48 am.

Thanks, Phil. I appreciate the kind words. Let me think about your question and see if I find something that might be valuable to share. The event you described obviously happened, but it might have been one of those slow accretions of many influences and efforts that’s hard to pin down in hindsight. But I’ll think about it.

Kendall Arbogast-Wilson on February 1, 2015 at 1:24 pm.

Just yesterday I heard an Atomic Object ‘ad’ as I listened to NPR and thought “Wow, well done.” And today, reading your post on successful succession I now understand what it took to get there. Congratulations to you and all the other Atoms!

Carl Erickson on February 3, 2015 at 8:00 am.

Thanks, Ken. I appreciate the nice words.