Making the Transition from Founder to CEO - Kate Carney
Making the Transition from Founder to CEO
As your business grows you need to grow. Seems logical. Yet, many founders I talk to and consult with struggle to make the transition to CEO. From pure Execution to Ongoing Strategy Communication and Management. From Innovator to Operator.
Making that transition is key to scaling your business. Pushing past the plateaus.
What does it take to successfully transition? Well, you have to shift your mindset, understand how the role changes, and adapt your leadership style and behaviors.
What is the Mindset of a CEO?
When it goes from being your “baby” to a business!
Your idea, your passion project, your sweat & tears, and your sleepless nights. You have all the insights into the opportunity, the innovation behind the product or service, the business model, and the target customer. At this point, the culture, your team, and the way things get done are all an extension of you. That personal connection you have working alongside your team motivated and inspired them. They feed off your energy.
Now, it’s time to think about it as its own thing. A business. With a life of its own.
Success is no longer defined as your personal achievements but something larger than you in terms of market impact, value creation, organizational size. Putting what is best for the business first.
As you are figuring out how to pivot and respond to this pandemic or, when it comes to any pivot in the business lifecycle, it’s about letting that original idea go. Being open-minded that there is a better way forward, a better product or service. Now is the time to get input from those around you – your team, mentors, your network and, most importantly, your customers. What do they need? What are their pain points today? Listen. You should be doing less talking and more listening as you make your pivot.
There is an emotional attachment (and a bit of ego) involved as a Founder and as you transition to CEO it’s important to separate out the emotional (not entirely – we are not robots) from your decision-making. One Founder I worked with was a great ideas person but not a CEO. As the business ran out of money a group of investors offered to invest if the Founder stepped down, but no, he would rather run it into the ground. That is ego getting the best of the business.
Yes, be guided by your purpose when making decisions but that is different than being emotional. When you are going to take action or investment resources ask yourself is that in furtherance of your “why”, your business objectives. That question calls for a reasoned response that accounts for your purpose.
A New Job Description
What’s the difference? As the Founder you were at the center of everything - every decision, every problem, you played every role, led every meeting, you had all the information … you get the idea.
So, what do you do now? As CEO, your role is about strategy, culture, hiring, leading and developing managers, promoting collaboration across multiple functions, implementing systems and processes, and serving as the key connection with outside stakeholders. It’s a big role one that requires new skills.
As your business grows, you need to grow. You need a whole new set of skills for the job of CEO. Skills you may or may not have yet in your toolkit. Start by taking a hard look in the mirror and being honest with yourself. What are your strengths? What are your weaknesses? Are you a sales person? Marketing guru? Tech wiz? How about as a leader? Are you a good manager? An effective communicator? What do you like to do – how do you want to spend your days? It is about self-awareness.
There are successful Founders that have acknowledged they may not be the best person to lead the business at certain points along the company’s growth trajectory. For example, Reid Hoffman or Larry Page and Sergey Brin have stepped aside when the time was right. VCs are becoming more accepting of, or even encourage, Founders to stay on as CEOs. The media jumps to tell the success stories of Founders taking their company public or hitting unicorn status. That doesn’t have to be your definition of success.
If that is your definition or something close, your personal development is as important as developing the business and they need to happen at the same time. Often on the fly.
Back to mindset for a minute. It’s all about a growth mindset. A belief that with hard work and learning you can acquire new skills. Learning by reading or learning by talking to those with the relevant experience and knowledge. I need to up my social media game…any takers? Help a girl out!
One way to help yourself is to seek out informal mentors, coaches, consultants, leadership programs, peers that are going through the same thing to share knowledge. Being at the top can be lonely. You need to find your tribe.
While you likely need more dedicated resources and people like a coach, mentors are helpful throughout the journey. They can come from your existing network or could be someone you seek out proactively. Think about who is living your ideal life (or so it seems based on research not just an instagram photo!). Looking not just at the business role you want but the whole picture. Make a list. Reach out to them. Mentors can be in your industry or in areas you don’t have expertise.
If you find yourself with a little bit of time right now – that is there is no obvious way to quickly pivot and demand has slowed - it’s a great time to dig in. If financials are not your thing, go learn your numbers. Financial modeling maybe. Not a skill I have and one I want to acquire. And I worked for hedge funds for years (but in fairness to myself as a lawyer!)
Again, as you pivot remember a pivot doesn’t have to mean your mission or objectives need to change. Your job as a CEO is to keep your team focused on that mission. There is so much noise and uncertainty right now, you need to keep your team engaged and working on, and towards, the vision.
Leadership means, among other characteristics (going with the ones that are extra critical in pandemic mode), being a strong communicator, projecting realistic optimism, having the ability to think outside the box, and decisiveness. Again, some of these may be skills you need to work on. Practice and experience will get you there as will having someone to guide you.
How to Get Out of the Weeds
As a CEO the goal is to remove yourself from the day-to-day tasks. To get out of the weeds and have the time and space to think beyond next month or the next six months. To look out and see potential challenges and opportunities on the horizon.
Not to mention, being stuck in the weeds generally leads to burnout, your team feeling like you don’t trust them, loss of passion, irritability and tiredness - all of which has a negative impact on productivity, innovation and decision-making. Plenty of other reasons to feel burnout right now so be mindful of how you are feeling!
Let’s practice self-care. I am working on my meditation practice – it’s a process for sure. Baby steps for me. I love yoga but I feel awkward doing it from home for some reason.
The ability to climb out of the weeds comes down to (1) having the right team and an engaged team, and (2) leadership style. I will leave teams for another day.
Leadership style has a broad meaning and big impact.
The most important trait is the ability to, and appreciation for, delegation. Delegating does not mean dictating tasks but transferring responsibility and ownership. Without delegation productivity decreases and growth is stagnated.
It is about giving up some control. That is scary for Founders. You are turning decision-making authority over to someone else. That is being a CEO. I heard a founder once say being the CEO means you only get the tough stuff. Right, the complex problems and questions that have significant impact on the business operations and performance belong to you. To have the mental space to make those decisions you need to clear out the small stuff. Isn’t there a book – Don’t Sweat the Small Stuff!
Delegation is about aligning the tasks you keep with the highest return to the company – a.k.a what’s the best use of your time? To get out of the weeds and stop being a bottleneck go make a list of the tasks you do regularly - can someone else do them? Then hand them over.
Successful delegation means knowing an employee’s strengths and weaknesses, and knowing what they do best. Be clear about expectations – timing, budget and deliverables. Let them figure out the “how”. Provide feedback and seek out their feedback.
I read an article by Sadie Lincoln, Founder of Barre3, who talked about the business’ early success and then hitting a plateau. She went out and asked for feedback and talked about the response of getting lots of negative feedback about her leadership style. She made changes and learned and evolved. She is a success story!
I imagine with everyone feeling so out of control right now there is a desire to tighten the reins.
Trust yourself. Trust your team.
You ultimately still have responsibility for the day-to-day but you are leveraging your time, you are relying on that A+ team you hired, you have engaged them so they are committed and motivated, you have the systems in place for information to flow and bubble when there is a problem, and you have a culture of transparency and one that sees mistakes as learning opportunity.
You are the CEO.
ONE ACTION ITEM FOR EVERY ENTREPRENEUR TO TAKE THIS WEEK
This week go watch a webinar on leadership (not one focused on COVID, which is important, but beyond crisis management). What successful leaders have said about what practices let them build businesses. Make a list of what you think are your weaknesses. Pick one area to focus on. Every Monday set your intention to do one thing towards improving.