Founder & CEO?A number of business owners prefer this designation (and role for that matter). Most are brilliant and capable entrepreneurs but questions that really needs answering are?are you the best person to be the CEO, or till what size are you the right CEO for your own business? With increasingly young entrepreneurs, it has almost become a fashion to critique the founder?s ability to be an effective CEO after the first stage. In fact, if you opt for funding, the investors may insist you hire an external CEO at some stage.
The skills required to be an entrepreneur and CEO may overlap but are different. However, it would be unfair not to remember numerous founders who ran the mile with their businesses with great success ? Bill Gates and Narayana Murthy come immediately to mind. While I have met enough founders who should definitely move out of the way and let in external expertise, I have met a significant number who are functioning equally effectively as CEOs.
The determining factor for me is a founder?s honest ability to assess their expertise as a CEO and adopt the designation not just because they have the authority to adopt any designation they wish but because they really are the best person for that job. So here are some questions for the enlightened entrepreneur to think about while taking this decision.
l How do you see your entrepreneurial journey? Do you feel allegiance to an idea and would want to stay with your company as it grows or are you a serial entrepreneur who would want to see the company reach a critical mass and then move on to the next idea? If you fall in the latter category, that is the first sign that you need to bring in an external expert to handle the tactical requirements of this business while you move on to explore the next opportunity. Remember, the idea is to move on! Do not to breathe down the neck of the external CEO which may adversely impact his/her performance. Maintain a discreet distance and request only essential, SMART and truly representative reporting.
l Do you have the necessary skills to be the CEO? While founders may have great ideas, a CEO needs to effectively articulate them to energise the workforce and take hundreds of people along the journey. While you can hire talent to do the managing, organising, setting up processes for you in the role of a COO or other suitable designation, a chief executive necessarily needs the ability to lead, build performing teams, identify and deploy the right talent, have a vision for the future and most of all be able to let go and delegate when required.
l As the business grows, can you really handle it all? This is often a crucial question in the debate. Is the person who brought the business to this level, the right one to take it ahead? I am afraid there is no right answer to this one. My first instinct is use the same standards to evaluate performance as for an external CEO. Why have different parameters for the founder-CEO who grew the business.
Identify the incremental requirements of the business as it grows in size and honestly assess the potential skill, performance and personal bandwidth gaps. These will provide direction to decide whether you need an external CEO or you can achieve the same level of success by complementing the CEO role with additional resources.
l If you may need funding, will you be able to inspire confidence in investors with your existing skill set, experience and team? Investors need to see a leadership team that inspires confidence, even if that means hiring an experienced CEO or COO to showcase the organisational capabilities. You want to ideally have thought of this and planned for it before you seek funding.
l Last but not the least, would you be willing to hire external expertise to ensure you get feedback and invest in self-development? The founder-CEO often flounders in the absence of honest improvement feedback which is rarely forthcoming, especially in the Indian context, from within the company. A self-improvement orientation, ability to handle criticism and willingness to hire a coach or appropriate neutral external person with awareness of the realities who can facilitate the improvement efforts would be essential along this journey.
As we discuss how the skills required for an entrepreneur and CEO are different, it also explains why all CEOs don?t make very successful entrepreneurs. So as the entrepreneurial bug bites you, watch this space for the next article in this series on March 12 as we take a look at what it takes to be a successful entrepreneur.
The trouble with most of us is that we would rather be ruined by praise than saved by criticism Norman Vincent Peale
For Coaching, Training & Leadership Development solutions contact the author at handashweta@gmail.com
The author is a freelance transformation expert, executive coach, trainer, change management consultant and the CEO of a 32-year-old small business group