Moving From Founder/Owner to CEO: 9 Vital Transitions 

Any leader who gets his or her organization through the growth stages of ‘Early Struggle' and ‘Fun’, almost certainly possesses (or has developed) considerable skills in motivating and inspiring others – getting past those early developmental stages is almost impossible without the growth leader acting as a strong centralizing force.

But for many managers (and particularly for founders or owners) going through the next, vital stage, ‘Whitewater’, brings with it a growing loss of confidence in their management skills – the very same management skills that they developed in the earlier crucible of growth, and most confusingly, skills with which they have succeeded thus far.

No longer turning on a dime…

In particular, the owner or founder has become used to making important decisions quickly, while also being right more often than wrong.

During Whitewater, this previously very effective ‘shoot from the hip’, ‘get it done’ management style begins to fragment.

One of the most frustrating aspects of Whitewater is that making and implementing good (read: effective & efficient) decisions becomes less and less frequent.

To the founder / owner this is not only frustrating – it's confusing. It begins to feel like she or he has ‘lost their touch’.

To the rest of the management team, this can cause a sense of bewilderment, and sometimes even fear: they trust the founder / owners’ judgment and decision-making -after all, that’s what got us here – so how can we survive if it is becoming ineffectual?

Transition time…

In this confusing phase of your organization’s growth, it’s hard to see that what is really going on: In effect, the entire basis of making and implementing decisions at the top needs to be re-born.

As we've seen, beginning in Whitewater, and culminating in Predictable Success, the complexity of the business means that the ‘shoot from the hip’, ‘get it done’ management style no longer works.

This is because the founder / owner is now too far from the action, and there are too many moving parts, for him or her to get it right every time with quick, visceral decisions based on gut feeling alone.

A new leadership style is required : the founder/owner must transition into thinking and acting as a CEO: (s)he must become both an efficient manager, and an effective leader.

What does this mean in practical terms? Just this:

Increasingly, it is the management team that has access to richer data, is closer to the action, and knows more about the likelihood of decisions being effectively implemented.

Over time, the founder/owner must coach and mentor the management team so they can:

1. Develop the decision-making skills necessary; 

2. Take responsibility for, and

3. Be self-accountable to each other for high-quality decision-making.

The 9 Vital Transitions

In most organizations, this doesn’t happen overnight. Far from it. Although the insight to see the need to make this transition may happen instantaneously, the transition itself generally takes between 6 and 24 months to complete.

(The lengthy time spread correlates to how often the founder/owner loses patience with transitioning to this new way of thinking and yanks the organization back to its old, Fun ways.)

For most founder / owners, there needs to be both the initial insight and a subsequent  commitment to staying the course in making the transition happen, during which the founder/owner transitions to the role of CEO.

On a practical level, this transition in management style happens in 9 key areas. Below, we’ll look at each briefly, then in future posts, I’ll elaborate on each: 

1. Intellectual Rigor

The commitment to asking as many questions as are necessary to uncover all the material information surrounding any needed decision.

2. Embracing External Change

The commitment to identify, assess and embrace positive external change agents.

3. Financial Understanding

The ability to read and understand all aspects of an Income Statement, a Balance Sheet and a Cash Flow Projection.

4. Stamina

Developing the mental, physical and emotional strength to concentrate for prolonged periods on the detail of both decision-making and implementation.

5. Discipline

Maintaining focus on, and commitment to, a course of action until it is completed.

6. Objectivity

The commitment to base decisions solely on the appraisal of the relevant facts, and without undue consideration of personal prejudices.

7. Consensuality

The commitment to early and frequent consultation with key individuals. Specifically, those holding authority, responsibility and/or influence over the implementation or outcome of key decisions.

8. Communication

The commitment to fully explain, to as many stakeholders as possible, as often and in as much detail as is required, the reasoning and implications of all key decisions.

9. Accountability

The establishment of formal structures and processes in which the CEO is held accountable by the senior management team for implementation of her or his responsibilities, duties and commitments.

Moving forward

Transitioning from the founder/owner mindset to that of a CEO isn’t about becoming a superhero – no-one I have met has demonstrated a perfect ’10’ in all nine areas above (indeed, if I ever did meet such a person, I’m not sure I’d want to spend too much time in their company – there’s only so much brilliance one can stand :-). 

The key is recognising where your own weaknesses are in the list above, and working on them.

In future posts, we’ll look at each of the 9 key transitions above in more detail, but in the meantime, click below to download them in flashcard format, together with a series of short questions to help you start assessing how you and your team are doing: 

What about you? What transitions have you made in your management style whilst negotiating Whitewater? 

Let Me Know In The Comments Below!