A few articles have been recently written about Founder to CEO transitions, because not all founders can become good CEOs.
Professor Noam Wasserman (Harvard Business School and author, The Founder’s Dilemma) was the first to realize that the skills needed to run a start-up during the early days are different than when the company grows. So, the question becomes whether or not, a founder can evolve with the required company evolution.
I’ve been interested in helping young founders become more self-aware of their transition requirements and the stepping-up they need to do, in order to properly lead their startup. Based on interactions with a dozen founders, observing a dozen others, and a review of the recent Blogiography on that topic since 2006, I’ve come-up with a practical Toolset that includes a table on Required Transitions, a Checklist, Skills you need, What doesn’t change, and Mistakes to avoid. The assumption is a starting point of 25+ employees, where the company is about to scale. [Special thanks to Matt Blumberg, author of Startup CEO for reviewing this toolset].
In There are no shortcuts to intelligent founder – ceo transitions., Fred Destin says “entrepreneurs have to write their own story”. So, there is no right or wrong way to evolve to a CEO role, but there are some fundamentals about CEO transitions that do not need to be re-invented.
Recently, Ben Horowitz wrote Why Founders Fail: The Product CEO Paradox, focusing on a failure symptom where the CEO wasn’t able to decide between managing, controlling or ignoring their product vision, as the company scaled. But at the heart of this was really a CEO transition failure. So, this is an important topic that has repercussions throughout the organization.
This post is about asking your feedback for improving/critiquing the following Toolset. Anything missing? Anything not right?
Please use the comments here, or go straight to this public Hackpad I created, and enter your thoughts there.
FOUNDER TO CEO TRANSITION HACKPAD (You can edit straight on the Web)
After this feedback, I will re-publish an updated version to this post, and add a Self-Assessment interactive tool, similar to the one I did on The Ultimate Guide to a Startup Company’s Culture.
Required Transitions
|
FROM |
TO |
| Doing everything yourself | More delegating, and enable them to accomplish tasks |
| Loose organizational boundaries | More functional clarity |
| Few job descriptions | Defined Roles & Responsibilities for each employee |
| Making most key decisions | Holding others accountable for their decisions |
| Making most hiring decisions | Vetting hiring decisions, focusing on short listed candidates |
| Managing by signals | Managing by objectives |
| No defined processes | Start to define (and optimize) processes |
| Flat structure | 2-level structure is OK |
| Grow by need | Plan & model financial impact of your growth |
| Vision + execution | Vision + manage the execution |
| Managing employees | Managing managers |
| Evaluating the performance of employees | Evaluating the performance of managers |
| Not worrying about profit/loss or budgets | Being more aware of budgets and investments trade-offs |
| Lead by doing | Lead by inspiring |
| Managing the product | Managing People (People are your new product) |
| Sporadic review cycles | Disciplined & scheduled review cycles |
| Managing investors | Managing investors and customer relationships |
| Board relationship | Board and market relationship |
| Sole product visionary | Letting others innovate on the product, but staying close to product reviews |
| Key salesperson & evangelist | Hire others to sell & also evangelize |
| Iterating and tinkering | Thinking and planning |
| Sporadic, informal communications with small groups | More regular and formal communications with larger groups in addition to maintaining the sporadic and informal |
Checklist that you are Becoming a CEO
- Spending 50%+ of your time with your people
- Thinking about your culture and codifying it
- Becoming self-aware of your strengths and weaknesses
- Inspiring others to innovate and perform
- Taking one day per month off to step back and think about where you are, and where you’re going
- Streamlining new employee on-boarding
- Managing by Objectives
- Appreciating operational details
- Being as passionate about building the company as you were about building the product
- Running weekly management meetings
- Reviewing sales progress with the exactitude of a surgeon
- Process, process, process
- Joining a CEO peer group
- Working with a coach or a mentor
- Starting to think about your brand
- Recognizing importance of organizational structure design as a lever that ties people, activities and results
- Hiring a marketing manager, biz dev & sales manager
- Having a CFO and an HR manager
Skills you Need to Have, or Develop
- Clarity and effectiveness of communications (strategic + tactical)
- Appreciation for process and its optimization
- Believing in and acting on people development
- Enjoying external networking
- Not being afraid of selling
- Liking people
- Building teams and fostering teamwork
- Ability to delegate
- Enjoying recruiting people
- Can manage sales people (even if you haven’t been one)
What Doesn’t Change and You Need to Continue Doing
- Making decisions under conditions of uncertainties and ambiguity (but it shifts into the organizational realm)
- Board Relationship
- Fundraising
- Thought leadership with the market
- Worrying about cash
Strategic Mistakes to Avoid
- Assuming that your abilities to lead product development or get to product/market fit is equal an ability to manage a company
- Relying too much on Lean, beyond the product/market fit
- Not striking the right balance between managing vs. reviewing the product’s evolution
- Relying too much on being funded instead of figuring out the business/revenue model (need balance)
- Being focused on product features that don’t contribute to your business model realization
- Not complementing a geek/technical culture with a sales, marketing or revenue culture