Venture Capitalist (to Founder of company): Would you rather be King or rich?
VC: Thanks, but no thanks
Being a successful Founder doesn’t necessarily a successful CEO make.
If after going through multiple vetted, seasoned, executives who come and go, the only thng all of them had in common beside their not working out is the founder. It is very difficult for many founders to realize this because they are usually incredibly smart and things are incredibly clear at the moment in their heads. But smart and clear at the moment in their heads although great qualities also do not a CEO make. Jeff Immelt, CEO of GE, offered a great piece of advice when he said to do your job as if you’ll be doing it all your life. Stay focused, become excellent at what you’re doing now, instead of continuing to jump to something that seems better for the moment.
Unfortunately some “jumpy” Founders enjoy being “king of their world” too much and they’re not going to let go of control anytime soon. Steve Jobs was widely applauded for being a very successful CEO. In truth he was a successful visionary and evangelist and used a Svengali like Reality Distortion Field (and superbly designed and nearly bullet proof products) to help fuel Apple’s success. The worries that Apple would falter without him were much exaggerated and the current CEO, Tim Cook, has been a major force at Apple for some time. He just had the poise, restraint and maturity to not get into too many pissing matches with Jobs.
Here are 10 signs that a Founder is not going to bring in a CEO to run the company while the Founder goes out to be its chief evangelist and strategic deal generator:
- Poor Say/Do ratio: What they say about bringing in a CEO compared to what they do shows they’re not even close to taking action.
- “Yes, but” every suggestion: They consistently point out why each possible candidate won’t work and insist the company doesn’t need one and that the problem lies with their team and not them.
- Don’t initiate discussions about bringing in a CEO: Those who resist bringing in a CEO rarely initiate a discussion about stepping down, much less provide action steps with a time line.
- People are afraid to bring up bringing in a CEO to them: These Founders are often domineering by nature, which intimidates key executives. Why in the world would people risk annoying them?
- Work is their life: They don’t have any hobbies or anything that produces the same adrenaline rush as the power they wield at work. One Founder told me, “When you go from a somebody (a CEO who is in the game) to an anybody (just another Founder/Evangelist) it’s the same as being nobody. There is no middle ground between being in control or out of control and you know which one I’m sticking with.”
- Work is their family: They are usually not capable of giving their undivided attention to their children and certainly not their spouse. Work is their priority.
- Won’t listen at work: They won’t listen to anyone who brings up need for a change at the top. They throw the focus back onto the bottom line and challenge people about that and then often change topics and focus frequently.
- Overcompensated: They are frequently overcompensated for the value they bring to the company. These Founders often have a fear of losing their perks and their prestige if the company is turned over to others and if their compensation becomes open to scrutiny.
- Increasingly more irritable: The more they realize that perhaps they aren’t entitled to what they’re paid, the more irritable they become.
- They have fearful aggression: The more fearful Founders are that their real value will be exposed, the more aggressive they become in order to protect themselves.
Such a person, especially if they are a domineering figure, can put their company at risk in a couple of ways.
First, promising employees will be tempted to go elsewhere. If that happens, the company will be left with the less than stellar performers.
Second, if the Founder has done a great job of making people believe that the company needs them, others will lose confidence in themselves and in that state of mind be more vulnerable to being “beaten up” by the founder. So what should promising employees, who could be the future of the company, do?
They should confront the Founder with the following:
- “How committed are you to bringing in an executive team that could make this company a success?”
- “Please offer a plan of action that takes action on finding a CEO and that assigns role and responsibilities to people already here and a timeline.”
- “If you are truly committed to finding a CEO, do I have your permission to seek out resources within and outside the firm to find such a person?”
If you are a Founder, what can you to do to make letting go of control more tolerable?
There are some great organizations including YPO, WPO, Vistage, Chief Executives Guild and Renaissance Executive Forums that can provide you with a group of peers who will be committed to you, have your backs and be candid with you.
Also check out: Can Your Company Succeed Once the Founder Leaves?