When to Bring in a New CEO: Managing the Transition from Founder to Institutional Leader

Most fast-growing education businesses start with a passionate founder, someone who cares deeply about curriculum, pedagogy, and learner outcomes. This kind of leader can kick-start success with a strong vision and hands-on industry know‐how.

The challenges change when these businesses hit revenue levels of around £10M to £50M+. Growth pivots from simply gaining market traction to handling commercial and operational demands.

At this point, investors and Boards must ask a tough question:

Does the founder possess the leadership skills needed to drive the company forward?

Switching from a founder-led business to one run by an institutional CEO can be a game changer. When done right, it adds value, boosts investor confidence, and speeds up growth. Do it wrong, and you risk upsetting the company culture, causing operational hiccups, and slowing progress.

Based on my experience, I look at why and how organisations can build plans to move from a founder-led model to an institutional CEO without losing momentum.

The Signs a Founder CEO Is Becoming a Bottleneck

Why Founders Sometimes Struggle to Scale

Founders are brilliant at getting things off the ground. They craft a vision, make the product stand out, and attract early customers. However, as the business grows into something more structured and commercially driven, a different leadership approach is needed.

Common signs that change is needed:

• Revenue starts to plateau even though there’s still strong market demand.
• Key team members leave because the executive direction isn’t clear.
• Decisions slow down because everything still needs the founder’s approval.
• Investors and the Board are not on the same page when it comes to long-term plans.

At this point, a business needs someone who brings process-driven execution, strategic financial management, and experience in enterprise sales, skills many founders might not have honed over time.

A founder excels at building a company, but that doesn’t always mean they’re the best person to scale it.

The Risks of Mishandling a CEO Transition

CEO transitions are complex, with many moving parts. Often, problems occur not because choosing a new CEO was the wrong move, but because the transition was poorly managed.

Common pitfalls include:

• The Personality Clash: Bringing in a new leader with a very different style can alienate the team.
• Cultural Misalignment: If the new CEO doesn’t respect the company’s roots, it can cause friction.
• Bad Communication: Failing to manage internal messaging leads to uncertainty and a drop in morale.
• Founder Interference: If the founder can’t step aside, it may spark power struggles within the new leadership team.

To avoid these issues, it helps to:

• Plan for the transition well in advance: Don’t wait until a crisis hits.
• Include key internal figures in the process, not just the Board and investors.
• Clearly define the founder’s new role (for example, on the Board or as an advisor).

A CEO transition shouldn’t feel like a sudden cultural reset; it should be a natural step towards sustainable growth.

The Value an Institutional CEO Brings to the Table

Replacing a founder isn’t just about finding a replacement, it’s bringing in a different skill set and mindset. Experienced scale-up CEOs can offer:

• Operational Discipline: They set up the systems, processes, and financial controls needed for growth.
• Investor and Board Management: They act as a bridge between financial backers and the rest of the company.
• Commercial and Margin Focus: They refine pricing, revenue models, and strategies to boost profitability.
• Experience with Mergers & Acquisitions: While founders are great at starting a business, few have the know-how for managing integrations or exits.

A scale-up CEO is not just an operator, they are a growth accelerator focused on creating long-term value.

Finding a Suitable Successor CEO

Choosing the right leader for the next phase is more than simply relying on industry experience alone. It’s crucial to find someone who fits your company’s current needs and culture.

Worthy strategies include:

• Understand your company’s stage: Do you need someone who can optimise, integrate, or aggressively expand?
• Look beyond the typical education background: Many top operators come from technology, SaaS, or multi-site business sectors.
• Plan for a gradual transition: This ensures both the new CEO and founder can align the company’s future together before the founder steps aside.

The best successor CEOs combine strong operational skills with the ability to respect the founder’s legacy while driving commercial growth.

Succession Planning – What Happens Next?

Once the decision to bring in a new CEO is made, it’s important to manage both the founder’s role and the company’s narrative carefully. Key decisions and practices for a smooth handover include:

• Deciding whether the founder will stay on in a reduced role or exit entirely.
• Determining if the founder becomes a Board member, an advisor, or an external ambassador.
• Communicating clearly with staff, clients, and investors ensuring clarity and stability are maintained.

Best practices include:

• An overlap period where the new CEO and founder work closely together.
• Clearly defined boundaries for the founder’s involvement in future decision-making.
• Effective communication that preserves both the public image and internal morale.

When planned well, a founder transition can be a catalyst for long-term success rather than an abrupt change.

A Crucial Moment for Education Businesses

The move from a founder-led company to an institutional leadership model is one of the most critical moments in an education business’s journey. When handled properly, it boosts investor confidence, enhances commercial capabilities, and builds organisational resilience. Done poorly, it may lead to internal instability, slowed revenue growth, and cultural misalignment.

Successful companies find a way to marry the founder’s original vision with the commercial expertise needed for scale.

Where Does Bolt Search Fit?

At Bolt Search, we work with education businesses to help them find and develop the leadership talent needed for sustainable growth. Sometimes, the challenge is finding the right executive who can bridge the gap between a mission-driven model and a commercially scalable business.  Other times, it’s setting up a structure that supports scale.

Time and again I encounter founders and investors who undervalue the commercial rigour required to scale and its link to enterprise value. It should be equally weighted alongside all of the crucial elements of an education business: learner outcomes, pedagogy, compliance etc.

If you feel that leadership misalignment, skill gaps, or a weak commercial strategy are slowing your growth, let’s have a chat. The right leadership and structure might be exactly what your business needs to move beyond its current plateau.