As any entrepreneur knows, starting a company is challenging but also a lot of fun. Being CEO after your company is successful, however, can be a different kettle of fish.
In the book Scaling Up Excellence, authors Robert Sutton and Huggy Rao explain how companies change as they grow, thus demanding different skill sets at the top.
That’s a difficult truth for some entrepreneurs to swallow, according to Jitendra Gupta, co-founder and ex-CEO at the mobile CRM software company Punchh.
“Even if your skill set isn’t the best for scaling and growing the business, it can be heart-wrenching to step away from that top leadership position,” he explains.
Gupta spent the first couple years leading the company as CEO but when the business started to gain traction, he found that there was something hindering its potential--himself. He realized he wasn't equipped to help his company fulfill its potential.
He recently described to me the four red flags that told him it was time to step down from the CEO position and into the role of VP of product development. I think they’re pretty universal and thus worth sharing:
1. You wax nostalgic about the early years.
Being the CEO of a rapidly growing company is a full time job. It involves creating efficiencies, hiring the right people, acquiring other business, and overall strategy. Some entrepreneurs love this work.
However, if your skill set is in engineering and you enjoy building out a product from start to finish, you may find yourself wishing you could go back to the days when you were improving the product and building out new features.
2. You dread interviews and hiring.
Possibly the most important task for a CEO is building the right team to grow with the business. That’s fun when you’re a small group and you’re hiring techies who can help you hone your own ideas.
As a company grows, though, the CEO must interview and hire salespeople, marketers, operations staff, etc. It’s vital to the company’s growth, so if you find yourself dreading interviews and hating the hiring process, being CEO probably isn't the right role for you.
3. You hate going to meetings.
As the company grows, so do the length and frequency of the meetings. A CEO’s entire day can be consumed by meeting with employees, strategizing with upper management, educating the sales team, schmoozing with potential clients, and so forth.
If that’s your thing, more power to you. But if you’re sitting in what seem like endless meetings, all the while wishing you could get back to your desk to do some real work, it’s a clear sign you’re not cut out to be CEO.
4. Your company's growth has plateaued.
If a growing company suddenly plateaus, it may be the result of a CEO who is more interested in building a great product for existing customers than in scaling the brand and acquiring new customers.
If that’s the case, the CEO owes it to himself or herself--and to everyone else on the team--to take leadership of the development team and get a CEO in place who loves all that strategic stuff.
One word of warning: While Gupta didn’t mention it, the key to successfully transitioning away from the CEO job is to willingly give up power. When decisions are made with which you don’t agree (and they will), you must resist the temptation to take back the reins.
In such situations, you’ve got two choices: help implement the decision with positive good will or, if you disagree strongly, leave the company. Start a new company, perhaps?