RIF: The Playbook to Landing Your First CEO Gig
An advice column for tomorrow's automotive SaaS executives, by Brock Hammerstein, CEO of VelocirAuto Synergistics™
Friends, colleagues, fellow travelers on the journey from Series B to "strategic exit" —
It's me, Brock. Three-time CEO. Two-time LinkedIn Top Voice. My inbox has been overflowing with letters from junior executives asking the same question:
"Brock, how do I become a CEO in this economy?" Pull up a chair. Let's get fit and focused.
Dear Brock,
I'm a VP at a dealer-tech SaaS company. I want to be CEO, but I don't have a track record of building anything. What do I do?
— Ambitious in Augusta
Dear Ambitious,
Building things is so 2019. Today's CEO doesn't
build — today's CEO
rightsizes. I haven't shipped a product since the Obama administration, but I've eliminated 11% of three different workforces, and the stock popped 7% each time. That's value creation, baby.
Here's your homework: take whatever your company does and announce you're doing 11% less of it. The number 11 is critical. 10% sounds calculated. 12% sounds desperate.
11% sounds like you ran the math. You did not run the math.
Dear Brock,
Our board wants us to "trim management layers." How do I frame that?
— Confused in Cary
Dear Confused,
The trick is to make eliminating managers sound like a
gift to the people who remain. Try this:
"By flattening our management structure, we're empowering our individual contributors to own their outcomes, accelerate decision velocity, and operate with the agility of a true challenger brand. Our people have told us they want fewer barriers between them and the work. We're listening."
Translation: we fired the people who knew what was going on, and now everyone reports to a Slack channel.
Pro tip: ensure exactly
20% of eliminated roles are management. Any less and Wall Street thinks you're protecting your friends. Any more and your remaining managers update LinkedIn before lunch.
Dear Brock,
How do I announce layoffs without sounding like I'm announcing layoffs?
— Wordsmith in Wilmington
Dear Wordsmith,
Never say "layoffs." Here is the approved lexicon:
- Fit and focus initiative (we fired people, and we're proud of the alliteration)
- Operational excellence transformation (we fired people and hired McKinsey)
- Driving long-term shareholder value (we fired people and announced a $90 million buyback the same afternoon)
That last one is my personal favorite. Nothing says "we had to make difficult decisions" quite like authorizing $90 million to buy back our own stock approximately 14 minutes after the WARN Act notices went out. The optics are
immaculate.
Dear Brock,
Be honest. Did any of you actually plan for the post-COVID environment, or are you all just panicking in unison?
— Skeptic in Schaumburg
Dear Skeptic,
How dare you. We are
executing with discipline against a dynamic macro environment.
Also yes.
Dear Brock,
What's the final step? How do I actually land the next CEO gig?
— Almost There in Austin
Dear Almost There,
Here's the secret nobody tells you. Once you've successfully "right-sized" a company into a smaller, sadder version of itself, you don't get fired. You get
promoted to the search.
You'll receive a generous severance, a non-disparagement clause, and a glowing LinkedIn post from your board chair using the phrase
"after a successful transformation, [Brock] has decided to pursue his next chapter." Within 60 days, a private equity firm will offer you a portfolio company that needs to be — wait for it —
fit and focused.
The cycle continues. The buybacks compound. And somewhere, a Series B founder is reading this column and taking notes.
Godspeed, you magnificent disruptors.
— Brock
Brock Hammerstein is the CEO of VelocirAuto Synergistics™. He is currently between layoffs.
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