The Exodus of a Division Head Can be Your Cue to Acquire

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What prompts the head of a division to resign?

I am not talking about the person who has led a division for 30 years and retires. I mean resigns. Replacements happen through forced resignation (firing) when a division of a privately held midsized company hasn’t been hitting its numbers. However, unless a serious health issue is involved, resignation of a division head is rare…and is a warning.

Changing positions at that level is not done casually. Division heads often have an equity stake in the business, and their pensions and/or 401Ks can be adversely impacted if they resign. At that career level, few people resign before securing better positions elsewhere…which means that the growth and leadership decisions have been stagnating in the division for some time.

If the products/services of the division have solid growth potential, the resignation of the division head was probably prompted by a power struggle. Maybe the CEO wouldn’t delegate authority to the division head. Good people resign when they are held responsible for achieving results but are not acknowledged or compensated for doing it or when their budgets get raided to support other divisions that aren’t carrying their weight. Division heads expect to fully lead their divisions and not be micromanaged or second guessed.

When a division head resigns, it is not business as usual. Pause. Open up. Don’t make a hasty decision. Promoting a follower from within the division does not address what caused a competent division head to resign. Negotiating with entrepreneurial leader(s) of competing companies can be the wake-up call the CEO needs. When a business is acquired, the due diligence process invites everyone involved to take a fresh look at goals, strategic direction, the logic behind compensation and equity, budgets and delegation of authority.

About Aldonna Ambler:
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.

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