Founder-CEO Succession at Wily

Technology
Why are we studying this case?

2
Has Lew Cirne been a good CEO so far?
Should he fight to remain CEO? Are
there any clues from Levensohn’s
article, “Managing CEO Transition in
Venture-Backed Technology
Companies”?

3
 Pros:
- successfully spearheaded
transformation of the company
- good hiring decisions
- clear vision of the company culture
- successfully raised two rounds of
financing with top investors
- built initial customer base
- gained experience in managerial aspects
and leading a team at Hummingbird
- high commitment and passion
For us, most of Cirnes actions were very beneficial to the company although some decisions could have
been better, thus overall good performance.
Cons:
- worked alone for almost a year
- relationship to Strohm and board is
more important to him than asking
penetrating questions
- sometimes very risk-averse behavior
(hiring summer intern instead of an full-
time employee)
4
 Should he fight to remain CEO?

+ Greylock did not behave towards Cirne as stated in their brochure “Our Approach”
+ Strohm did not tell Cirne his involvement was based on bringing in a new CEO
- lack of confidence to tackle possible critical situation
- limited CEO skills
- he knew that he could not handle the upcoming challenges that good

→ He should not fight as he reached his limits of positive influence he can exert as a CEO in the
company

Clues from the article

Resistance to or rejection of board input? → regular meetings with Strohm
X
Disengagement and avoidance? → high passion, drive and commitment for
company X
Indignation? → seems to avoid
situations under pressure ~
The silent treatment? → wants to keep good
relationship to board X
Buck-passing & finger-pointing? → did not build team to cover weaknesses, but strong executives 5
What are the pros and cons of Wily’s
approach to finding a new CEO?

6
 The CEO search
Evaluation of Wily’s approach

Pros: Cons:

Right timing and Lack of structure and

no rush focus in the beginning

Consider internal and Considered only one final

external sources candidate

Pursue a cultural fit to Acts of unprofessionalism

ensure productivity when selecting CEO

Collaborative and Almost “overheated the

constructive approach company”
7
As Lew Cirne, why would Dick Williams
want to replace you as Chairman?

8
 Reasons

A change in leadership 1 Need of a different leadership to grow the company further into
the lifecycle and to challenge the executives

Gain full control 2 To get rid of the biases which may arise in future decisions

Lack of chairman skills 3 Lew lacked experience to make bigger moves as compared to
Williams

Right people in right spot 4 To avoid sending mixed message to the team

Difference in vision 5 To steer the company in a different direction against Lew’s vision
9
As David Strohm, if Lew rejects Dick
Williams’ demand and threatens to
leave Wily, what would you do?

10
 Options
Option 1
- Convince him to stay:
- Do not give him the feeling of
betrayal but lead the
discussion objectively
- Give him the opportunity to
lead his own department and
focus on product development
- Cirne’s new role as CTO
preserves his ability to make a
productive contribution to the
company
Option 2
- Allow him to leave:
- Present him with the option to
leave keeping in mind that the
company can go on without
him
- Remind him that he is not the
majority shareholder
- No proprietary technology
- 50% of something is better
than 100% of nothing.
11
 Thank you!

Group members:
Arsalan Zaidi
Niklas Ottink
Philip Pollmann-Schweckhorst
Saumik Tiwary

12