A word of caution for any entrepreneur who has founded a business and remains active in it: you might need to fire your CEO - yourself.
Of course, every owner of a growing business knows what it's like to play multiple roles. But let's focus on the distinction between two of them: owner and CEO.
When you're wearing your owner hat, you look at your business as an asset in your portfolio. Not unlike any stocks or real estate you might own, you expect your business to generate good profits and to continue to grow in value every year in a way that generates a return on the capital and sweat equity you invested to get it started.
The other hat you might be wearing is that of the CEO or president. Your job is to grow the business and make your investors happy.
But problems can arise when you find yourself wearing the owner and CEO hats at the same time. What happens when the CEO might not actually be doing enough to grow the business in the way that satisfies the owner? What happens when the owner gives the CEO a pass if, they were truly being objective, they really should consider firing the CEO: you!
If your goal with your business is to create a nice stable lifestyle company that you can control and run for the rest of your career - you're fine and this lesson isn't aimed at you. On the other hand, if you want to maximize the value of your company because some day you want to sell it and retire, then read on.
Let me share an example of what I'm talking about.
I was once running a CEO peer group that included a guy named Steve, who was the sole owner and president of a digital printing company. It was a nice business doing about $25 million a year in sales with good profits. But it could have been so much more. At least that's what Steve's peers coached him on in our sessions. The other CEOs in the group saw how Steve could partner with a large digital technology company that generated printable content like Adobe or Microsoft, in a way that would make his business the standard by which people turned their online digital information into hard copy. Imagine a "Print Remotely" button on every copy of their software. This was a breakthrough idea.
You see Steve had a great advantage in that he had the logistical infrastructure where he could deliver printed copies of anything overnight. He could even have it, UV coated, personalized, folded, collated and even mailed if you wanted. In other words, he was the perfect substitute for anyone who didn't want to go to their local FedEx Kinkos to pick up what they wanted printed and do it themselves. If he could form a partnership with this large corporation and scale up his operation, he could have put his company on the fast track.
But Steve didn't like the idea. He thought he would lose control of his business and that it would be too hard to pursue the partnership with the big company in the first place. And it really sounded like work.
What do you think Steve's owner would have thought about that attitude? If you were an investor taking an objective look at that company, and the CEO refused to pursue an amazing idea like that, leaving who knows what kinds of opportunities on the table, what would you do? You would fire the CEO, of course.
But Steve was wearing both the hat of owner and CEO. So what happened? Nothing! Steve made the decision that an underperforming operator would make instead of what he should have done, which was think like an owner.
The point is that if you own and run your business, are you letting opportunities slip because you're a satisfied CEO and not enough like an aggressive owner? Is there a CEO in the market that could do a better job and grow your company faster? If you find yourself nodding in an answer, then maybe it's time to fire the CEO, hire a better one and start thinking more like the owner. After all, if you don't eventually find your successor, you're going to be stuck in that job forever anyway. Why not start that transition now?
Jim is a popular keynote speaker and the author of the best-selling book, "Great CEOs Are Lazy" - grab your copy to today on Amazon