The Leadership Transition – Am I the right person to be the CEO?

Are you facing difficult choices about your own role running a young and growing company?

In the secret diary of a first time CEO, one of the most stirring phases in the story encompasses the inevitable Crisis of Leadership.

When we start our own company, we don’t necessarily set out to become leaders. Our drivers are often about owning our own business and lifestyle, doing the things we love, being independent, and proving to ourselves and others that we can be successful. We usually have exceptional technical knowledge, and this becomes highly focussed on perfecting the product or service offered. On the flip side, this is rarely accompanied with management experience or an inclination for leadership.

The Crisis of Leadership

There is an inevitable point early in the life-cycle of a company, marked well by ‘The Crisis of Leadership’ in Larry Greiner’s Growth Model – The Greiner Curve [1], where the founder needs to make a choice about their own leadership.

The founder of a startup tends to be entrepreneurial, and an entrepreneur tends to pride themselves on self-determination and in being a do-er, a self-starter able to drive forward their goals, catalyse new ideas and capitalise on opportunities.

In this initial stage, the team around them can be highly agile with shifting responsibilities and close and frequent daily communication, allowing the team to rapidly respond to opportunities, pivots and market feedback.

These two qualities of the early-stage founder and team, which are fantastic for rapid innovation, can be a hindrance to the necessary growth of the company. This is highlighted in Greiner’s Model, with all the qualities that drive growth in one stage of a business’s life-cycle, becoming the very things that hold back evolution to the next stage. It is intricately linked between the founder and the team, as the qualities of the leader ultimately play out across the culture and success of the company. So as time goes by, the company grows, more people come on board, the founder/s workload becomes increasingly managerial and the team cries out for direction, focus and structure. This point is marked by a leadership crisis in the company usually because it is also an existential crisis for the founder, or even a crisis between founders, as choices have to be made about their role and purpose in the company. It is often a point where the founder longs for the ‘good old days’ and may become overwhelmed, or beset with self-doubt.

An Existential Crisis

This early period of settling the business into a steady sustainable income can become so defining for who we are. We become our work, feeling worthwhile by the results we achieve, by our creative and intellectual abilities, or by our ability to develop key relationships. We might be secretly saying to ourselves a version of “I cannot fail, otherwise I will be defined by that, and my ability to be successful is who I am, it protects me and provides my security” [2].

The risk here lies in an overuse of the strengths that defined us as we started the company, ultimately preventing us from releasing control, and from relinquishing the old work we did in order to transform into the leader that is needed.

Some questions like these arise:

“How do I define my role in the company?”
“Can my staff do this as well as I do it?”
“How do I get everyone to pull in the same direction?”
“Am I capable of leading this organisation?”
“Do I even want to lead?”, or “Should I get someone else to do it?”, and
“Who would be best for the company?”

The entrepreneurial skillset now needs to be augmented with a new set of beliefs and skills that foster collaboration, motivation and coordinated action as the leadership becomes less about one’s individual goals, and more about people and inspiring others towards collective goals.

This can be challenging when one’s identity and self-worth is founded on being the ‘do-er’, or on the very tasks that are being relinquished to others.

A CEO for building effective teams

A new mental model is now called for that allows us to deploy ourselves in a new way, in new circumstances. We may begin to choose service over self-interest. This can involve some very challenging personal realisations as we uncover how we are constructed, challenge that, deconstruct and reconstruct it around a new more effective internal operating system that is attuned to building organisational structure, culture and performance.

Ultimately the growth of a company and success of a team relies on its CEO evolving at the rate of the company, otherwise growth and development will be stymied, it will stop at the limits of the leadership, or even ‘refusal’ of leadership, in the case of Founder’s Syndrome [3].

Paraphrasing a line from the movie Dune, most first time CEO’s don’t set out to be leaders, they set out to make a difference, but then there is a call and they must choose to answer it.

…….or not !

What big decisions are you postponing?

Want to explore your role as a CEO in your growing company and how coaching might help you?

References

[1] Greiner, Larry. 1972. ‘Evolution and Revolution as Organizations Grow’. Harvard Business Review. © 2014 Harvard Business School Publishing Corp. Reproduced with permission from Harvard Business Review/New York Times https://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow

[2] Anderson, R.J. and Adams, W.A., 2015. Mastering leadership: An integrated framework for breakthrough performance and extraordinary business results. John Wiley & Sons.

[3] Block, S.R. and Miller-Stevens, K., 2021. Founders and organizational development: the etiology and theory of founder’s syndrome. Routledge.

Tools:

The Enneagram of Personality https://en.wikipedia.org/wiki/Enneagram_of_Personality