As investment grows, and you prepare to take your business to new heights, it may be time to consider a move from ‘Founder’ to ‘CEO’.
Here we’ll share advice, insights, and guidance to help you confidently step into your new leadership role at your own pace, meaning you can set your sights on driving growth and leading your business to success.
You've poured your heart and soul into building your business from the ground up. Now, as your company grows, you may find yourself facing a common dilemma: Should you carry on juggling multiple positions as the Founder, or is it time to embrace a more focused leadership role as CEO?
What’s the difference between being a Founder and being CEO?
First and foremost, you'll always be the Founder of your company. From late nights at the kitchen table to securing high-value investments, your bond with your business is unique.
However, as your business scales, you will need to give even greater focus towards the big picture. This includes owning your mission, vision, company culture, strategic goals, financial targets, and investor engagement.
As CEO, you'll transition from being intimately involved in day-to-day operations, to concentrating on the strategic management and growth of the business. With this transition comes greater accountability to investors for the company's performance and success.
At Foundation Partners, we believe that thriving people build thriving businesses. As CEO, you'll play a crucial role in leading and empowering your team, fostering a positive company culture, and making critical decisions that lead the entire team to drive the business forward.
Should I change from Founder to CEO?
As your company evolves and progresses through various rounds of investment, the transition from Founder to CEO moves from a consideration to a necessity.
In the early stages of a start-up, the founder's intuition and agile approach are invaluable. However, as the team expands, establishing structures and shifting towards a clearly defined long-term strategy become essential.
Transitioning from Founder to CEO represents more than a mere change in title; it's a pivotal moment where you empower yourself and the team you've built to fully realise your vision as you enter the next phase of growth.
When should I change from Founder to CEO?
Unfortunately, there's no one-size-fits-all answer to this question. Factors like revenue, team size, and other considerations vary greatly between companies, making it a decision that you'll need to make based on your own unique circumstances.
That said, In the Works had the opportunity to speak with several founders who have undertaken this journey. A recurring theme was the necessity for each founder-turned-CEO to shift from 'working in the business' to 'working on the business.' This change in mindset demands full attention to ensure that the culture, mission, and vision of the company receive the dedicated focus they deserve.
7 tips for transitioning from Founder to CEO
1: Preparation, preparation, preparation
Transitioning from Founder to CEO requires thorough preparation. But where to start?
Research from McKinsey identifies six key elements of the CEO's role:
- Defining and instilling corporate strategy.
- Aligning the organisation and engaging employees.
- Defining roles, responsibilities, and processes.
- Engaging with investors/board.
- Being the face of the company to clients/customers.
- Effectively managing your own time and energy.
Marvin Bower, a long-time leader at McKinsey, believed that the CEO's job is so unique that preparation can only come from hands-on experience in the role. While practical experience is invaluable, investing time beforehand can significantly enhance your chances of success.
Before making the switch, it's essential to assess your strengths and areas for development. Consider seeking mentorship on leadership or strategy, investing in training for technical skills like financial management, or receiving expert guidance in defining your People Strategy from resources such as Foundation Partners.
2: Communication is key
A fundamental aspect of the CEO's role is to champion the values, vision, and mission of the company. Therefore, it's crucial to avoid sudden announcements that could disrupt or unsettle your team, customers, or investors.
Instead, prioritise transparent and clear communication by discussing your intentions and plans with key stakeholders ahead of time. This includes co-founders, board members, investors, and employees.
Establishing a timeline and clearly outlining expectations for each team member is essential for ensuring alignment and garnering support for the transition.
3: Build a great leadership team
To free yourself to focus on the big picture, surround yourself with a strong leadership team whom you trust and who bring diverse skills and expertise to the table. This team will play a crucial role in supporting your vision and effectively executing the company's strategy.
As part of this process, consider revisiting any areas for development you’ve earmarked. If something is not your strong suit, don't hesitate to focus on what you excel at and delegate responsibilities accordingly.
If you're unsure about the need for creating a full-time position, consider exploring the option of fractional support from organisations like Foundation Partners, through which a senior VP can be embedded in your team on a short-term or project-by-project basis, providing valuable expertise and support as needed.
4: Delegate and share responsibility
When starting out, you wear many hats — developing products and solutions, nurturing client relationships, managing finances, arranging meetings, and more.
Letting go can be tough, but as your company grows, recognising when to delegate tasks becomes crucial. As CEO, your focus will shift to strategic leadership and decision-making, meaning you’ll need to empower others to handle day-to-day operations.
Micromanagement can hinder productivity and morale. So, it’s essential to trust your team to carry out your vision. This is not only the best use of their skills – it’s the best use of yours.
5: Develop a strategic plan
Work with your growing leadership team to craft a clear and actionable strategic plan for the company. Define long-term goals, objectives, and establish metrics to measure progress and success.
Ensure that your strategic plan allows for flexibility and adaptability to changing market conditions and business dynamics. This agility will enable your company to pivot as needed and seize new opportunities while staying aligned with your overall vision.
Take this opportunity to redefine the way your business operates; from the systems you use to your team's ‘ways of working’. Implementing a structured approach will enable your growing business to operate smoothly and efficiently, setting a solid foundation for future growth and success.
6: Lead by example
Transitioning from Founder to CEO means shifting from being a silo to becoming a leader whose actions and decisions set the tone for the entire organisation.
Lead by example – show integrity, and cultivate a culture of transparency, collaboration, and accountability.
This includes being open to feedback from stakeholders and employees and being willing to adapt your approach as needed. Continuous learning and improvement are key to navigating the challenges and opportunities of leading a company.
Routinely celebrate milestones and successes — both big and small. Engaging and recognising the contributions of your team members fosters loyalty, commitment, and improves the overall culture of your company.
7: Come up for air
Taking a step back can provide valuable perspective. Spend the time saved from delegating operational tasks to gain a better view of the bigger picture.
Networking with peers, attending conferences, and participating in industry forums can help you stay ahead of the curve and position your company for success. This proactive approach ensures you stay connected with the broader industry, mastering market trends, industry developments, and competitive dynamics.
Final thoughts
Transitioning to the role of CEO is a vital step in the growth of your business, and if executed well, it can unleash the full potential of your company.
While the shift may present challenges, the rewards are huge. Remember, building a successful company is a marathon, not a sprint. Embrace the transition with confidence, determination, and a thirst for learning and growth, and you'll be well-equipped for what’s to come.
Navigating this transition requires careful planning, self-awareness, and a commitment to continuous improvement. By following these steps and leveraging support from your team and stakeholders, you can successfully transition to CEO and lead your company to new heights of success.
Navigating the next phase of your business journey? At Foundation Partners, we can be your compass.
Get in touch to find out how we can help.