Overstock CEO: How to step out of the shadow of a larger-than-life founder

Fortunately, I had worked for the company for 17 years in various positions, most recently as an Overstock board member and president of Medici Ventures, an Overstock subsidiary. That was an advantage. But I knew it would also present challenges. 

In my first leadership meetings, I knew all the faces and I saw unspoken questions in those faces. It was clear they expected answers. And, sure, I had answers, but it wasn’t yet clear I had the trust of the company.

Why?

Well, company founders have profound effects on culture. Their influence on the hearts of executives (and the organization) can run deep—for better or for worse. A CEO transition is a space between legacy management and new management, filled with doubt, concern, even indifference. Some execs take a wait-and-see position; others elbow their way forward with the newcomer.

Whenever you step into an established role, there is history—and what you decide to preserve is just as important as what you decide to discard. In any case, how you make changes matters as much as what you decide to change.

Here are a few key concepts to consider for leaders who might find themselves in a similar situation:

Don’t be afraid to take a backseat

After accepting the CEO position, I decided, for a time, to sit on the sidelines and observe. 

In our first executive meeting, I sat on one of the benches that line the conference room walls, as opposed to at the head of the conference room table. I let the company president run the meeting. I made occasional contributions, but mostly I listened. I could have jumped in and made command comments and decisions. But taking a backseat, listening, and letting others engage and collaborate accomplished several objectives.

Sometimes it is as important to observe as it is to speak. Why do I say that? It encourages and empowers more participation, for one thing. Founders don’t do it all alone; neither can you. In a CEO transition you are building on history, and some back-bench listening will help you sort what is working and what isn’t. Observing provides a clear vantage point on the dynamics of the team and visibility into leadership qualities.

A CEO who listens empowers open and active discussion among executives and fosters executive trust. So, positioning away from the head of the table was a visual cue of a desire to listen and learn.

After a few meetings, I took a seat at the table. Then after a few more, I moved to the head of the table. This gradual and subtle transition helped the executive team get comfortable with me and eased the natural nervousness they felt during this period of change.

Create a culture that fosters empowered leaders

Companies produce products; CEOs produce empowered leaders. When you are taking over, empowering leaders is a greater challenge than simply promoting people or implementing new programs. Leadership comes through teaching, training, and observation. 

For me, building a culture of leadership began with decision-empowerment. I told my direct reports that our one-on-one meetings were their meetings to direct. After aligning on a shared set of priorities, we discussed what they needed from me, and not the other way around. 

Structuring these one-on-one meetings this way made it clear that my responsibility was to be a resource for them in accomplishing their projects. They had their responsibilities, and I had mine. 

When capable leaders are empowered, I find I rarely need to override the decisions they make. I may ask questions to make sure all options are considered and necessary points are addressed, but it’s rare that we ever radically alter a well-thought-out decision or shelve a good project. And things progress and get done.

I constantly look for and explore instances when my colleagues’ ideas and positions are different from—even contrary to—mine. When they are right, I change my mind and express support for their position to show I respect their thinking and abilities. A CEO’s job is not to be the smartest person in the room; it is to be the person who leads the discussion to the best outcome.

Steady, persistent cultivation of existing and new leadership abilities not only ensures continuity of past success, it also confers trust in your new era of leadership.

Lean on institutional knowledge

In any transition of leadership, it is tempting to remake everything in your own image. After all, you are the new boss and it’s your job to drive the company’s vision, direction, and strategy. 

If you have been promoted from within the company, your institutional knowledge of what is driving success will be a guide. You will know what might need to change, and what should continue.

If you are from the outside, you will have your experience, yes, but you will need to cultivate relationships with longstanding, key employees before moving on a new agenda that might be foreign to the team you’ve inherited.

Either way, you should always look to the institutional knowledge and wisdom that comes from within the organization to assist in knowing how and when to act—especially when the action will involve substantive change from historic patterns.

In your initial conversations with leadership, you are likely to sense that people have allegiance to past processes, to the founder’s way of doing things.

If you move too quickly to alter the landscape, wiping out things—sometimes, merely to signal that a new day is dawning—you run the risk of unnecessary alienation. You don’t have to over-eulogize the founder in those first few weeks, but giving credit where credit is due will establish a link to the past, while you move forward. This gesture will help acknowledge and preserve the important institutional knowledge that built your organization, and allow you to incorporate it seamlessly into your plans.

There is no easy path forward for a new CEO, especially when you are replacing a charismatic founder who had been leading the company for decades. Once the team is confident in your leadership and you’ve answered their questions, including the unspoken ones, you will be free to step out into the light and make your own changes, with less overt or covert resistance. You will also be free to take the company in a new direction, if that is your plan, or to enhance the company’s mission and some of its values while deemphasizing others. 

Jonathan Johnson is the CEO of Overstock.com.