Founders: The One Decision Required

Todd Schrock, Advisor with CEO Advantage

How to Overcome the Unique Challenges of Emerging Businesses (20-100 Employees)     Article #9 in the series

If you have built a company to the emerging business size, you are in rare air. You have succeeded where only a handful out of every hundred CEOs ever have. You have navigated very different and difficult phases: start-up, acceleration, and small business.

Now in this emerging phase, which few founders reach, you stand poised to become a solidly mid-market business. You have faced many difficult decisions to get here. But no decision as critical—and few as difficult—as the one you must make now.

And just what is that essential, turning point decision?

You must choose your new role.

In the words of the eminent Peter Drucker, describing entrepreneurial management:

“And finally, it requires of the founding entrepreneur a decision in respect to his or her own role, area of work, and relationships.”

(Innovation and Entrepreneurship, 1985, p. 188)

Building a great leadership team, as discussed in several previous articles, may be the most important step this series addresses. But surely, choosing your new role is often the most difficult. Your business has become an embodiment of your dreams, tears, sweat. It has required your skin in the game. It has risked your reputation (and personal assets) with every loan signed, employee hired, promise made, and transaction completed.

Ignoring this decision is very costly. The business press is littered with horror stories of founder-entrepreneurs who did not recognize the changing needs of their growing businesses and the best roles for them to play.

Take your time in determining your new role. Get advice from those who know you well, those you trust. Consider also seeking out the wisest person you know who may give you the opposite advice you want to hear.

Founders (and any highly entrepreneurial CEO in this stage): the two articles prior to this one (here and here) addressed taking advantage of your leadership opportunities. In review, build a competent and cohesive leadership team. Then recognize, appreciate, and utilize the strengths of each leader, whether with an entrepreneurial mindset or with managerial skills.

Logically, these two important steps will lead you back to rethinking your role:

“Where can I contribute?”

At this point it is consistent with human nature, and far easier, to ask ourselves: What do I enjoy doing? What do I want to do? How can I benefit from the extraordinarily hard work and the unseen sacrifices that I have poured into this company? Towards which social cause or religious mission or family legacy can I turn a significant part of my attention and resources?  (And why would I seek any other’s advice? I would not have made it this far if I had listened to most people.)

Returning to Drucker’s brilliant roadmap (p. 201) for a founding entrepreneur’s self-assessment. The right questions are different:

  1. “What will the venture need objectively by way of management from here on out?”
  2. “What am I good at?”
  3. Then, “Only after having thought through these two questions: What do I really want to do, and believe in doing? What am I willing to spend years on, if not the rest of my life? Is this something the venture really needs? Is it a major, essential, indispensable contribution?”

It is time for a founder to compare the unique needs of an emerging-size company with his or her strengths. (Achieve success by building on strengths, yours and others, and not by trying to fix weaknesses, as Drucker admonishes elsewhere.)

If financial success now allows, it is also time for the founder to evaluate whether he or she has significant passion for any social, religious, or family goals. A choice may be required because of the time and energy commitments. It is highly likely that the business goal or personal goal or both will suffer, due to unique needs of this business stage. Which will you choose?

Founding entrepreneurs have successfully filled a variety of roles within the company, including Founder-Owner, CEO, VP of a department, R&D specialist, etc. (Sometimes they sell the business and start a new company.)

Assuming the founding entrepreneur leans towards retaining the CEO role, it should be with eyes wide-open to the unique challenges for the CEO of a 20-100 employee company. This series has fleshed out those needs of an emerging business, and as early as 50 employees, the CEO should also prepare for additional midsize company needs right around the corner.

What is needed for the entrepreneurial CEO to make this transition?

1. Remember what “CEO” stands for: Chief Executive Officer.

“Executive” as in execute. “Chief” as in the one person who has the bottom line responsibility for the whole company’s execution.

To be a successful CEO during this stage, one must unreservedly own the responsibility for getting the entire organization to work together on the key critical priorities. From vision to strategy to execution to results—an unbroken chain. Every employee failure is your failure too. (Recall the recent United Airline public relations problems?)

Frankly, there are many boring parts of being a CEO. Leading an Executive Team to relentlessly execute throughout and across all departments and processes to satisfy customers, engage employees, and meet or beat financial targets involves much unexciting execution work. The company cannot afford for the CEO to work on secondary priorities or pet projects or to get intrigued with the next entrepreneurial venture.

2. Can you lead (or learn to lead) through a leadership team?

Or would you feel shackled, constrained?

Are your strengths realistically suited to grow a productive Executive Team of people, each one better in their areas of responsibility than you? Can you build a team of leaders, instead of trying to lead the entire workforce by yourself?

(Good Executive Teams can help at every step. They can adapt themselves to a wide variety of CEO’s personal styles. But they cannot help if you will not let them.)

3. Are you willing to make the transition from a workday mostly focused on entrepreneurial innovation to a workday consumed by the (high-level) managerial tasks of company-building?

Be honest with yourself. Are you addicted to the adrenaline of entrepreneurial innovation? Does it feel like you were made for that early entrepreneurial excitement?

A successful CEO at this stage must no longer be the primary source of entrepreneurship. Your personal innovation must be outgrown and replaced by an organization you build that executes along the whole spectrum—from the innovative idea to the repeatable profit.


To survive this growth stage, and to thrive in the future, the founding entrepreneurmust take an unflinching look at what the organization needs and how he or she can best serve that need. And then choose to grow in the full-range of CEO skills or find someone who fits the role better.

Otherwise the founding entrepreneur can be the very bottleneck to accomplishing their own vision.


Questions for CEO Reflection

  • What does your company need from you now—in this business stage?
  • Can you adapt to what this new stage needs from a CEO? If so, how will you learn it? What tools can help you internalize and grow as a CEO?
  • Honestly, do you want to adapt, or are your strengths and passions and joys found in another area of the company, or even some new entrepreneurial venture?
  • If you decide it is best for you to take a different role than CEO (for now), who on your leadership team can best fill the necessary requirements of the role?

© 2017 From the Top, LLC


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