Business Opinion

Scale Yourself: Why Great Founders Don’t Always Make Great CEOs

Dorothy Spence, Founder of Imaginal Ventures, shares her opinions on founders being CEOs. 

If you don’t know the name Bill Rasmussen, don’t feel bad. He’s not a household name, even though the revolutionary company that he founded is an iconic global brand. So why doesn’t everyone know who he is? The answer is simple: in 1980, two years after he founded ESPN, he was pushed out of the company that he had created. And over the last 40 years, Rasmussen, who is now nearly 90 years old, has watched from the sidelines as his brainchild has gone from fledgling upstart to worldwide behemoth.

The business world is littered with tens of thousands of Bill Rasmussens—founders who had the vision and the tenacity to create companies but were ultimately unable to lead them to success. No entrepreneurs ever dream that they will be pushed out of their own companies, but that’s actually the norm, rather than the exception. In fact, few founding CEOs are still at the helm when their companies receive a series B funding. That’s because the skills that are required to get a company moving are not the same ones that create long-term success. Even the much-lionized Steve Jobs spent 20 years in the wilderness before Apple invited him back to save the company.

So how can founders who want to remain in control of their companies stay ahead of the curve and keep themselves from getting sidelined as their organizations grow? It starts with the recognition that the skills and capabilities that it takes to start a company are different from the ones it takes to run a company. But when you break that down even further, it takes completely different abilities to run a five-person company, a 20-person company, a 100-person company, and a thousand-person company. That’s why a founding CEO who is used to being in complete control of every aspect of his or her business may not be the right fit as a company scales up because the delegation and management skills just aren’t there.

Titles don’t scale. Skills do. 

There’s no single CEO style that works at every size, but it actually is possible to scale leadership capabilities and skills. It takes a constant commitment to evolving and avoiding the pitfalls that so many founders encounter as their companies grow. Let’s look at three ways that founders can weather the storm and remain at the helm of their organizations for years and decades.

First, founders who want to stay on the job need to attract investors and board members who aren’t just looking at short-term returns. There’s always a Faustian bargain, of course, when it comes to bringing in outside funding, but investors who are just looking to make a quick buck don’t really care about who is in charge as long as they get their ROI. All funders want to make money, but founders need to do a deep dive to figure out who is really committed to the long-term vision. In many cases, that means not jumping at the first terms sheet they see.

But it’s not just about how outsiders perceive founders: the second thing early-stage leaders need to do is take responsibility for their own professional and personal development to help guide their companies through the various stages of growth. If you are an engineer, know that you need to delegate finance and marketing rather than trying to do it all yourself. If you are someone who lives and dies by the daily all-hands meeting, know that you won’t be able to sustain that once the organization grows past about 15 people. What works for a start-up does not always work as a scale-up.

The third thing that founders who stay in leadership roles at their own companies need to do is maintain a near-fanatical devotion to their values and their culture. That’s fairly easy to do when you have five people sitting around the table in a shared workspace, but it gets increasingly difficult as the team grows, and those personal connections become harder to maintain. Start-up CEOs who allow their companies to drift often find themselves disconnected from their own organizations, which is the beginning of the end for them as long-term leaders.

“Soft skills” aren’t set in stone.

When founders get ousted, it is often couched in the language of hard skills: the board wanted someone with more practical experience running a global organization or a CEO with a track record of building distributed engineering teams. But in most cases, the issues are far more complex than that, and at their core they have everything to do with temperament, personality, and many of the other attributes that get lumped into the “soft skills” bucket. In fact, those skills are anything but soft, and can actually be taught and learned. It’s up to founders to seek out ways to improve their leadership abilities so they can grow and thrive along with the companies that they put so much passion and heart into.

Dorothy Spence is a serial entrepreneur, published author, and speaker. She is the founder of Imaginal Ventures Inc and The Purpose Led Business School. Dorothy’s twenty-year experience as a skilled Business and Leadership Advisor has helped countless small and medium enterprises (SME’s) catalyze profitability and asset growth. Her work with scaling purpose-led businesses through building supporting structures, procedures, and workflow systems has gained notoriety in the entrepreneurial community. Dorothy has been recognized for her innovation and leadership in many ways, including being named the Canadian coach for SheEO and receiving the Top CEO Award, Innovation Award, and Professional Engineers Service Award.