Leadership in Practice
Before You Replace the CEO, Diagnose the Business
Changing the CEO only solves the problem if leadership is actually the problem. That can be harder to determine than it sounds.
By Eric Snyder · 2026-09-21
When a company repeatedly misses its growth plan, leadership eventually becomes part of the discussion.
Sometimes it should. CEOs fail. Companies outgrow founders. Executives who were right for one stage of a business may not be right for the next.
But changing the CEO only solves the problem if leadership is actually the problem.
That can be harder to determine than it sounds.
Weak growth can come from poor execution. It can also come from the wrong market, an overly broad ICP, weak differentiation, a product that requires too much customization, an implementation model that does not support the economics of the sale, or a business that has mistaken customer demand for scalable product-market fit.
From the boardroom, many of those problems eventually look the same. Growth slows. Pipeline weakens. Forecasts move. Margins deteriorate.
The hard part is figuring out why.
The Pressure to Act Is Increasing
CEO turnover has been rising and average tenure has been getting shorter. Boards, investors and sponsors are showing less patience with underperformance, and new leaders are getting less time to prove themselves.
Some of that is healthy. Boards should hold leadership accountable.
The risk is acting before the underlying problem is well understood.
Research on CEO turnover suggests that performance alone does not explain many leadership changes. Board dynamics, investor pressure and different interpretations of what is actually going wrong also influence the decision.
That makes diagnosis especially important.
A board sees the outputs: missed revenue, weaker pipeline, slipping margins, customer losses, slower growth.
It still has to determine what caused them.
Replacing a CEO before answering that question can mean treating the most visible problem as the root cause.
Leadership Failure and Business Failure Can Look the Same
Take pipeline.
Weak pipeline may indicate an ineffective sales organization or a CRO who has lost control of execution.
It may also mean the company is pursuing the wrong accounts, selling into a market without enough urgency, or offering something customers find interesting but not important enough to buy.
Forecasting works the same way.
Repeated misses may point to weak commercial leadership. They may also reflect poor qualification, inconsistent stage definitions, weak inspection or a sales organization that has never established what evidence is required before a deal becomes a real commitment.
The issue may sit even further upstream.
It took me longer than it should have to realize we didn't really have product-market fit at scale.
Moments of success can be illusory.
There was clearly a need in the market. We had customers. We could win business. All of that can create a convincing picture of product-market fit.
But there is a difference between proving there is a need and proving you have a product-market combination that can sell repeatedly and scale economically.
Companies confuse those things all the time.
A few large customers can create the appearance of PMF. Founder relationships can create the appearance of a repeatable sales motion. Custom work can create the appearance of a scalable software offering.
Growth itself can hide the problem for quite a while.
If a new CEO walks into that environment with a mandate to accelerate growth, the assignment may be fundamentally wrong. The company may be asking a different person to scale something that has not yet proven it can scale.
This Gets Harder in PE-Backed Businesses
This question becomes particularly important in PE-backed and growth-stage companies.
There are legitimate reasons to change leadership as a company enters a new stage. The person who built the first $20 million of revenue may not be the person best equipped to build the next $80 million.
The business may need more operating discipline, stronger management, better governance and more predictable execution.
Sometimes the answer is a new CEO.
But the board still needs to understand what is preventing the company from getting where the investment thesis says it should go.
If the problem is leadership, change the leader.
If the market is wrong, fix the market focus.
If the company does not have scalable product-market fit, changing the CEO will not create it.
If implementation economics are broken, adding more sales capacity may make the economics worse.
If the company still relies on founder relationships to win its largest deals, hiring a more experienced sales leader does not suddenly make that motion repeatable.
The intervention should follow the diagnosis.
The New CEO Inherits the Old Business
A leadership change can create momentum. New priorities are set. The organization changes. People move. The board gets a fresh plan.
But the new CEO still inherits the same product, customers, economics, people and history.
They also inherit the unresolved problems.
In many cases, they get less patience than the person they replaced.
That creates pressure to show visible change quickly. New CEOs often feel they were hired to fix what the prior leader got wrong, which makes it easy to start changing things before they fully understand which parts of the business are actually broken.
Research on CEO transitions points to this problem, particularly in founder-led companies. Incoming professional CEOs can damage what was working when they treat professionalization as a clean break rather than building on the strengths that made the business successful in the first place.
A good transition requires understanding what should change and what should be preserved.
That is another form of diagnosis.
Know What You Are Changing
None of this is an argument for keeping an underperforming CEO.
Sometimes leadership is exactly what needs to change.
But before making that decision, a board should be able to explain where performance is actually breaking and why.
What assumptions behind the growth plan have proven wrong?
Which parts of the business are genuinely repeatable?
Where does success still depend on customization, exceptions or individual heroics?
Does the company have product-market fit, or does it have a product-market fit that can actually sell and scale?
Which of those problems are genuinely attributable to the CEO?
If those questions have not been answered, replacing the CEO may create activity without fixing the problem.
New CEO. Same business.
Diagnose the business first.
Eric Snyder is a Partner at Big Wheel Performance. He helps SaaS and technology-enabled services companies drive turnarounds and global revenue transformations by leading scale initiatives and overseeing P&Ls exceeding $250M.