Entrepreneur, CEO or Both? Which hat, or hats do you wear? CEO…that title sounds good doesn’t it? Okay, so you founded the company, but does that mean you should also be the chief executive? Did you bestow the title upon yourself simply because you had the authority to do so, or are you the right person for the job? Perhaps you were the right person for the job initially, but has the company outgrown your management ability? As the founder, can you, or should you, attempt to grow with the company? What does a CEO really do anyway? In today’s blog post I’ll assess what it takes to be an effective CEO and you can decide for yourself if you have what it takes to get the job done.
Sure, it’s your business, your idea, your net worth at risk and certainly nobody else will work as hard as you will, but is this really the right way to evaluate who should be the chief executive? The answer is no it’s not…however this is often times exactly how the decision is made. While entrepreneurs are clearly talented innovators and visionaries, most first time entrepreneurs don’t have prior experience as a CEO.
Over the years I have come across many self-appointed CEOs that struggle to read a balance sheet, don’t understand capital formation or financial engineering, have poor communication skills, have never built a sales force, authored a business plan, or lack any number of other requisite operational abilities. I’m not suggesting that all entrepreneurs are incapable of being chief executives, but I am suggesting that you stop and make an honest assessment of whether you are doing the job because you’re the most qualified, or just because you don’t know what you don’t know…
Before I start breaking this down, let me disclaim that a post of this nature works off generalizations and stereotypes, and that there are clearly exceptions to every rule. I have known many entrepreneurs that are exceptional CEO’s, but I have known many more that don’t measure-up and shouldn’t be fulfilling the role of CEO. I’m not making any judgments or pointing any fingers, but readers of this post will know which camp they fall into.
It is the nature of the beast that most entrepreneurs are a disruptive force within a company. A VC friend of mine refers to most entrepreneurs as practicing “seagull management” in that they fly in, flap their wings, crap all over everything and fly back out again…Many entrepreneurs desire to have input on everything, yet don’t want anything to do with the details. They often don’t possess the skill sets to add value to the initiatives they want to control. This type of behavior is proof certain that the entrepreneur is not being effective at leading, team building, delegation, leveraging process and a variety of other highest and best use activities for CEOs.
Let’s begin by determining what it is that a CEO does…First and foremost it is the CEO’s job to provide leadership based upon a clearly articulated vision and a well defined strategy. Priority number two is team building and talent management. One of the main keys to generating organizational leverage is for chief executives to know when, where and why to deploy (or redeploy) talent and resources. It has been my experience that it is much easier to recruit talent or acquire resources than it is to properly deploy talent and allocate resources.
Jack Welch the former head of GE built a reputation as one of the great chief executives of this era. When asked how he transformed a lack-luster, institutional, global corporate giant into a dynamic culture focused on innovation and growth, Welch responded by saying; “My job is to put the best people on the biggest opportunities and the best allocation of dollars in the right places. That’s about it. Transfer ideas and allocate resources and get out of the way.” Welch clearly not only understood the concept of organizational leverage through proper deployment of talent and resources He mastered it.
I’ve heard it said that the role of a leader is to create and manage good followers. While there is an element of truth in that statement if this is what you aspire to as a leader it constitutes a complete underutilization of leadership responsibility. I believe great leaders will mentor and coach subordinates for the purpose of identifying and developing other great leaders.
To achieve maximum success I believe it is incumbent upon an entrepreneur to take an honest inventory of his/her skill sets and competencies, and contrast them with the needs of the enterprise as it relates to what is best needed to efficiently and effectively lead the company forward. If your skill sets are best suited for business development, product development, branding, finance or other areas you may want to consider playing to your strengths by taking a senior position in the area of your subject matter expertise and hiring the best chief executive you can find to lead the company.
Surrendering the chief executive role doesn’t mean that you must give-up financial control or lose the ability to have input on decisioning, but it does mean that you’ll have to trust in, collaborate with, and delegate to someone who has the necessary domain expertise to get the job done.
Please forgive the forthcoming pitch, but it really is sound counsel…for those not willing to bring in professional executive talent, I would strongly advise that you at hire a CEO coach to help develop your executive skills and advise you in areas beyond that of your core competency. At the end of the day, the choice of who occupies the chief executive role is yours to make…choose wisely.
Mike Myatt, is a Top CEO Coach, author of “Leadership Matters…The CEO Survival Manual“, and Managing Director of N2Growth.