Great founders don't necessarily make great CEOs. Being deliberate about founder role transitions is often overlooked in scaling businesses.
Growing a business means getting comfortable with transitions everywhere, all at once.
The notion of a steady state is a mirage.
Something is always changing - processes, partners, roles, structures, cadences, systems and more.
I've worked extensively with founders who are scaling their businesses. One of the most challenging role transitions I've observed is when a founder moves into a CEO role.
It's difficult because it demands different skills than were needed previously.
In the start-up phase of a business a founder is across every aspect of their business. They have to hustle. They are personally involved with most activities in the business and keep a close eye on the rest too. They are a central node in the small network that is a start-up.
In footballing terms they have to be as comfortable playing up-front as a striker, dazzling in midfield and retreating to be a gritty defender too. They are the ultimate shapeshifting all-rounder.
Yet in the scale-up phase of a business, what's needed from a CEO changes.
Rather than being on the pitch covering multiple positions, they need to have extricated themselves from the on-field action. They should be observing from the bench and seeing things that the players can't see from where they are.
They need to help the team understand the strategy the business is executing. They need to devise and set up the system in which the team plays. They relentlessly coach individual players to perform at their best.
But I've seen founders end up tying themselves and their businesses in metaphorical knots with the founder to CEO transition.
The needs of the growing team exceed the founder's leadership abilities or appetite. They typically end up letting go too fast. Or they try to remain fully in control of every last detail in the business.
They end up stifling the next stage of organisational maturity that a scaling business needs.
This is a transition that too few founders and their boards seem to talk about. Its significance in the scaling of the business is undervalued.
The most successful businesses I've worked with are those that have been deliberate about this transition.
They've thought deeply about what their business needs from a scaling CEO.
They've been as objective as possible about whether a founder is best placed to fulfil these needs. It's not an easy or comfortable conversation, but it's immensely valuable.
There are many other valuable roles a founder can play. But they have to put ego aside and be open minded towards someone else coming into the CEO seat.
Don't assume that as a founder, you have to automatically step into that CEO seat for your company to fulfil its potential. The best move you can make as a founder to drive scaling might just be to bring in someone else to play that role.
One of the most interesting books I've read that covers this area is Work with Source by Tom Nixon.
Using Peter Koenig's research as a starting point, Tom's book explores the importance of the founding role and how this role can evolve during the life of a business.
He explores the important evolving role that scaling businesses need from a founder, highlighting the co-existing tensions that a founder needs to be continuously reconciling.
This article is a good summary of his key themes but the book is recommended reading for founders and boards in scaling businesses too.