Scale-up leadership pitfalls: founder versus CEO

Scale-up leadership pitfalls: founder versus CEO

02 June 2021
Gerrit Sarens
Gerrit Sarens
  • At Ambits, we often work for scale-ups that have realized that leadership is essential in their race for the moon. To achieve their ambitious growth objectives, they have decided to invest in leadership support.

    We see several typical leadership pitfalls in scale-ups. One of them is the founder versus CEO challenge. Not every founder is, by definition, a good CEO.

    There have been several instances historically where professional CEOs have replaced founders. This, however, does not mean that founders cannot be CEOs.

    In the start-up stage, you need entrepreneurial founders who get the company off the ground. In the scale-up phase, you need a solid CEO to scale and bring the company to the next maturity level. It is essential to bring in that distinction as companies scale.

  • The difference is simple

  • A founder gets the idea for the business and acts on it. He brings resources, builds the team, goes out to find new customers, gets financing, focuses on the right products and services to sell, and so on. Whatever needs to be done, a founder rolls up their sleeves and gets the job done. In other words, a founder is typically someone who does most of the job himself.

    Founders are visionaries who came up with the original idea (the why), think more about their product (the what) than running their company (the how).

    A CEO is an integrator who flourishes on transforming chaos into order. He builds up the company while paying attention to organizational operations (the how).

    CEOs delegate effectively to talented people on their team and then get out of the way to let them do a great job. For the most part, CEOs spend their time coaching the team to bring out their best.

  • Successful founders versus successful CEOs

  • Founder

    CEO

    Risk-taker

    Visionary

    Passionate

    Hardworking

    Persuasive

    Adaptable

    Ambitious

    Competitive

    Risk manager

    Self-aware

    Continuous improver

    Challenger

    Strong communicator

    Relationship builder

    Pro-active

    Situational leader

  • Our best advice

  • Two scenarios are possible when going from start-up to scale-up:

    1. Either one of the founders takes up the CEO role
    2. Or somebody else takes up the CEO role

    Making the transition from founder to CEO is far from easy. If you have the ambition to do this, make sure you have the necessary support. As you can see above, the competencies you need to become a successful scale-up CEO are very different from those competencies that have made you successful as a founder. Several of the Ambits Mentors have gone through similar journeys and are well-equipped to help you.

    Moreover, don’t fall into the trap of having more than one CEO or co-CEO. It often doesn’t work. A growing company needs one lighthouse with a clear mandate.

    If you conclude that you are not the right person to take the CEO role, it’s a courageous decision.

    There are again two options: either you find your future CEO internally, or you search externally. In both cases, it will bring challenges. Will you leave the company? Will you search for a new role within the company? What do you expect from the new CEO? What is needed to guarantee a smooth transition? To avoid disappointment and emotional damage, we recommend getting advice from an experienced mentor who can warn you of the typical pitfalls.

Struggles of a manager

Managers are

  • new in this role

    and

    • lack self-confidence
    • don’t know how to go from being a colleague to being a boss
    • need to loosen up on the command & control leadership style
    • must let go of the (technical) expert status
    • cannot give or accept constructive feedback
    • feel pressure to perform as manager
    • have difficulty building relationships
    • want to be liked by everyone or want to be the ‘bad boss’
    • play the hero
  • are struggling

    and

    • stay too involved in operations
    • have trouble prioritizing
    • cannot delegate
    • fear conflict situations
    • disconnect from the team
    • deal with flawed strategic thinking
    • do not relate to higher management
    • lack clear communication skills
    • remain not self-aware
    • avoid difficult conversations
    • miss political antennas
    • ...
  • capable of more

    and

    • need mental preparation as successor
    • need to be able to lead big changes ahead
    • need to learn to be emotionally resilient and in control
    • need to learn to make big decisions fast without all the information
    • must become persuasive presenters
    • need to learn how to cultivate their own personal brand
    • need to learn how to lead by example
    • manage by trust, not by fear
    • need to overly develop empathy
    • ...
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