You came up with an awesome idea. Your singular focus has been to make it real. You started a company. You got funding. Maybe you’re looking for Series B or C funding now. Maybe you’re prepping for the IPO. Congratulations! You’re ready to scale or go public. You’ve gotten this far. What could go wrong?
Every founder reaches this turning point. Some make the turn. Others do not. Missing the turn or making it too late can cause a company to stagnate or implode or can spell the death of the idea; or worse, the idea becomes someone else’s to bring to market without you.
What’s the differentiator? The winners make the shift from Founder to Leader. Those who can’t or won’t become the barrier to growth and success. They may not be the first to go; but eventually, and in many cases when it’s too late, the founder who hasn’t made the turn will be removed by the investors or by the board of their newly public company.
How do you avoid this fate? Make the turn. When you started out you rightly focused on developing your unique new product, service, or solution. At some point founders need to shift their focus from making the idea real to building a team and then an organization that will make the idea real. The mindset and skill set for the latter is vastly different than those that enabled your creative expression.
There are warning signs you may be stuck in founder-mode and not making the turn to leadership. One of these can derail things pretty easily. And, most times, if one of these signs is present, another is as well. Here are ten signs you’re not making the turn.
1. You’re holding on too tightly. When you started out you had to do everything. It was only you. In early days as you began adding one person and then another, all the decisions still ran through you. When you’re working to reach the point where you can scale or go public, holding on too tightly becomes a serious risk to the enterprise. Success depends on your ability to delegate not just responsibility; you have to delegate authority. There are things that only the CEO can do. If you’re still spending time doing the work of others, you can’t do what only you can do. Let go. It’ll be okay.
2. You’re keeping stuff in your head. This behavior is related to the first sign. It’s slightly different however. You may decide to delegate some decisions and tasks; but you keep the important stuff to yourself. If people still need to come to you for instructions on how to do something, that’s a sign that you need a clearly stated process so that anyone designated to handle a task can handle that task. To scale you need a playbook so that everyone has clarity about the processes and systems that get stuff done. Hire someone to interview you about how you do everything. Have them write it all down. Get it all out.
3. You’re spending too much time in the weeds. Most likely you enjoy solving problems. That’s how you came up with your cool idea in the first place. You like the details. You can get lost exploring the problems and finding solutions. That’s okay if it’s just you. But it’s not just you. Your team and your organization need you to be doing the things that only you can do. Get out of the weeds. That’s someone else’s job now.
4. You’re hiring fans. You’re excited about your idea. Making it real drives you. Your enthusiasm is infectious. That’s a double-edged sword. You want to bring on people who share your enthusiasm; and, that can’t be the primary reason you hire them. They have to bring something to the table besides an eagerness to tell you how smart you and are and how cool your idea is. They have to have the ability and the freedom to bring their experience and expertise to fill a gap in your capacity and take on an important function on behalf of the business. Hire leaders, not fans.
5. You’re not building a team. This warning sign is related to the first three in that if you’re guilty of one of those signs, you’re most likely guilty of this one. When you make the turn you accept that your job is to build and sustain a strong team with the alignment and capacity to engage one another and all your people to make the idea real. Building and sustaining a team is pretty much a full-time job. Delegate the rest. Take care of your team.
At some point every founder has to consider adding a team not just below him in the org chart, but a team alongside him or above him. As founder you probably have gotten used to and like being the voice of authority. Making the turn includes recognizing that you need other people to help you achieve the vision and valuing the involvement of people who can advise and challenge you in a way that your team and employees cannot.
6. You’re not listening. Your curiosity has gotten you here. If, as the pace quickens and the work becomes more complex and the stress level rises you become less curious, you’re stuck, and probably on the path to failure. As long as you stay curious, the future is yours. Your curiosity will enable you to recognize new opportunities or see that the idea that founded the company may no longer viable and must be amended or shed.
When engaging your team your employees or your customers, follow this rule: “Use inquiry before advocacy.” When you advocate a position, whoever is listening is voting in their head. They either agree or disagree. If they are an employee, they’re probably not going to tell you they disagree. If they’re a customer, they may be deciding to buy or pass before you want them to. When you inquire, there’s nothing to vote on. Inquiry deepens the conversation and moves you and the other person past debate and into real dialogue. That’s where the possibilities emerge. Be intentionally curious.
7. You’re not focusing on the customer. The seventh warning sign is directly related to the sixth. Your idea solves a problem. When you think knowing the problem and building the solution is enough, you’re headed for trouble. Your customers will always come up with an enhancement, iteration, or completely different application. The sooner you shift to the needs of the customer, the better for you and your company.
8. You’re building a culture by default and not by design. You may think having an HR/People Strategy is something for down the line. You’d be wrong. There needs to be an absolute focus on HR and people from the get-go. As startups grow, leaders build and mature a HR/People strategy that is informed by and aligned with the overall business strategy. This is harder than you think because it requires discipline on your part to make time to be intentional about the culture you want to scale and to put policies and procedures into place that create that sustainable organization.
Sound governance begins on day one. You may get a good deal of pushback from your founding employees, but your new employees are looking for stability. You may be torn between these conflicting demands. Founders think that an HR/People Strategy with manuals and policies and procedures are a waste of time. Their organizational culture happens by default. Leaders know that building a culture by design is critical to business success.
9. You’re avoiding some tough calls. Here’s an example. Maybe your CFO is a family friend. As your company matures that person might not have the needed skill set to take the company to the next level. You have tremendous loyalty to your friend. You don’t want to hurt them. You also don’t want to face a really difficult conversation.
Founders who are too loyal to their early hires often fail to build the right culture for the company as it shifts in to the next gear. Making the turn from founder to leader means making tough calls. It may mean letting go of a founding employee, including any friends and fans that cannot make the transition you require. Leadership is uncomfortable sometimes. That’s part of the job.
10. You’re not managing your energy well. Founding a company is a rush; you are propelled by adrenaline a lot of the time. There is the exhilaration associated with the possibilities you generate, the intense pressure, and the corresponding fear of failure at any time. This experience can be addictive. We’ve actually seen founders and the people who were drawn to the early stage company create crises that don't need to happen just to feel that rush again. As your company transitions into a more mature business you have to be aware that you will miss the rush.
Founders tend to be wildly passionate. You are always in the mix. And, you operate in a fishbowl. Everything you say and do is observed and noted. How you show up can energize your employees or demotivate them. Your behaviors and practices set the example for what is acceptable, and they will be replicated to the point that they inform the organization’s culture.
When you recognize and accept this, you make the effort to stay energized, to show up well and with intention. If you are tired, overworked or rushed, you are making mistakes and the power of your position amplifies the negative impact of those mistakes. When the opposite is true, you can amplify the overall positive impact you have on a company tenfold. You must concentrate on managing your energy because there are so many demands on your time, that you can’t meet them all. If you try to, you begin to see warning sign #1. Effective time management begins with good energy management.
Making the Turn
These are the ten warning signs you’re not making the turn from founder to leader. Want to make the turn? Here are three signs you’re making the turn and embracing being the leader and not just the founder.
1. You’re creating a compelling vision of the future. You’re telling the story of where the company is going and why it’s going there. You’re being clear about outcomes and how you’ll measure success along the way and at the end.
2. You’re aligning thought and action. People know the strategy and plan to realize the vision. Everyone knows their role and responsibility. Actions are coordinated and people know who’s doing what, and by when. You’re establishing a common language and process tool kit embedded with leaders at every level to ensure consistency in execution.
3. You’re growing leaders at every level (including yourself). As you scale you will need leaders everywhere who are agile and adaptable. In addition to driving business results you are making time to ensure each team and each individual are doing their own work of personal and professional development.
If you’re the founder or CEO, there’s no one else at your level in the organization. You have no peers. Everyone reports to you and looks to you for answers. The pressures you face are intense and very real. We know that. And still, you need to keep growing yourself as well. To reach and stay at the top of their game, every elite athlete continues to practice, keep their skills sharp, and grow their capacity to win. The very best rely on a coach or coaches to help them with their continuous development. The best leaders see ongoing coaching as necessary and vital to their success and count their executive coach as a trusted advisor whose only agenda is helping the founder/CEO succeed.
There are signs all around you as to how well you are making the turn and shifting from Founder to Leader. Making the turn means letting go. Making the turn means doing the work of growing your capacity to lead. Leadership involves uncertainty. You won’t know everything. Leadership is messier that being the founder. It might not be as fun for you. And, it’s what you’ve signed up for. Make the turn.
This article was co-authored with Thomas Brattle Gannett, the global chair of N2Growth’s Board and CEO practice.