From founder to CEO: How to make the transition
Read on to discover why staying hands-on may hold back your business – and find out how to make it work
There are many challenges when it comes to setting up and growing a business; from accessing finance to hiring staff and everything in between.
But a perhaps less obvious hurdle is making the challenging transition from founder to MD or CEO.
It’s a change that many owners of successful and growing businesses have to make at some point, but it’s one that can be difficult to deal with.
Relinquishing control and becoming more of a supervisor of the business is not an easy task for many entrepreneurs who are used to being the person driving growth on the ground.
Mark Martin, founder of London-based construction company M&M Construction, found himself as a business leader almost by accident: “I was employed by a construction firm that went bankrupt. The contractor asked me to stay on and finish the job – it just spiralled from there.
“At first I thought I’d just keep it small, but the contractors kept offering me more work, so I had to start employing people. I started getting work elsewhere too, through word of mouth. And the more work I got, the more staff I had to take on. One minute I’m just a builder, and the next minute I’m an MD!”
So what can owners of growing businesses do to ensure that they remain on the growth path and take the move to CEO in their stride?
The right team
First of all, it’s vital to decide whether you are suited to a role as MD. Many business owners assume that moving to an MD or CEO role is the logical step but for some this will be a mistake.
Do you have the skills to succeed as an MD or would you be better off in a chairman role, as the CFO or as the marketing director? Understand where you can add value to the business and then build a strong and unified team around you to plug the gaps.
Leadership and management training can help with identifying areas where each member of the management team can add value, as well as equipping everyone with the skills they need to lead effectively.
Strategy, strategy, strategy
For those business owners that do take on the CEO role, the main challenge is usually strategy – many don’t have the time to dedicate to it or they just don’t know where to start. But for growing businesses, it’s vital to make strategy the priority to pinpoint exactly what you’re trying to achieve, both in the short-term and in years to come.
What do you want to do and when do you want to achieve it? Research we carried out found that just half of business owners are able to describe precise business objectives for the next 12 months off the top of their head. If your objectives aren’t clear, what are you working towards? Have a clearly focussed vision, and a plan for exactly how you are going to achieve it.
Make time. Business owners say that not having the time to step back from the day-to-day running of their business to focus on longer-term strategy is a bigger barrier to growth than the economic environment. Part of becoming an MD or CEO is stepping away from the day-to-day work in order to lead the business. And this means making time to focus on long-term planning.
Review your plans. Once you’ve made your short and long term plans, it’s essential to review them on a regular basis and amend them as business and market conditions evolve. Our research shows that more than a third of business owners rarely or never revisit their business plan.
Part of stepping back and taking a more long term approach is considering professional business advice or coaching from someone outside of your business who has ‘been there, done that’ and who can give you an independent viewpoint.
Transitioning from founder to CEO can be a daunting task, but with the correct planning, people and guidance, it needn’t be a barrier to growth.
Edward Brewer is head of business development coaching at GrowthAccelerator. www.growthaccelerator.com