You'll find out relatively early in the life of a new venture. Here's why.
When discussing how CEOs scale within their companies, most people are referring to a CEO's ability to delegate or manage a larger team. What's interesting is that I suspect that the delegation skills required to be successful in managing an organization of far greater than five to 10 people are probably very similar to the skills required to manage five to 10 people.
While Kohort, the social media start-up I co-founded, does not yet have a large team, adding more folks to the core team has not dramatically changed the way I operate and make decisions as CEO. Here's why: I believe my leadership team has already scaled.
If you want to have a constructive debate, there are only so many people that can be in the room. You can't hash something out with 50 people chiming in. As a result, when you think about each level of a corporate hierarchy there are social interactions that govern how wide each layer of an organization can be. The executive team can only be productive if it's a small enough group to have a conversation.
Based on that, when you expand the headcount of an organization you often grow wider and wider in the lower ranks, yet keep a relatively small management team. This creates the visual of a pyramid that we all associate with organization charts. When we hire more people at Kohort they're usually reporting to a lieutenant and my circle of interaction hasn't changed all that much.
So, given that, what does it mean when someone asks, "Can this CEO scale?"
While they might be referring to a number of different dimensions of the CEO's role –thinking big, using sophisticated business planning and analysis, and beyond – they're typically referring to a CEO's ability to delegate. My intuition tells me that a CEO's ability to perform in this dimension is observable once the team crosses into the double digits in terms of number of employees. If they can't empower others to drive a process (while also providing sufficient bumper rails) with 10 to 15 people, they probably won't be able to with a team of 100. The implication is that the test of delegation comes relatively early in the life of the company. If you're having trouble delegating relatively early on, either learn or re-evaluate your position in the company.