Why Entrepreneurs Need to Avoid the CEO Trap and Become Founders
Building a company from scratch is one of the most rewarding experiences for entrepreneurs. Assembling a team, learning from trial and error, bootstrapping operations—there are so many multifaceted dimensions when watching a business come to fruition. But for companies to thrive and grow alongside changes in human behavior and technology, it is crucial for entrepreneurs to shift from CEOs to founders as soon as possible.
Chief executive officers are actively engaged in multiple roles in the business they’re overseeing. With startups in particular, a CEO often takes on the responsibilities of a chief financial officer (CFO), a chief operating officer (COO) and a chief marketing officer (CMO). Each of these titles has a definitive role, and it is important for entrepreneurs to fill these positions with qualified individuals who can devote their full attention to them; even if an entrepreneur is skilled in executing these roles individually, the business will never grow if he or she has very little bandwidth.
An entrepreneur must safely let go of day-to-day operations by establishing processes anyone can follow and outsourcing lower-level administrative tasks. By standardizing their company’s processes, they ensure tasks are completed and key people are held responsible for ensuring the continuation of the system. Although all businesses need processes put in place, most small businesses cannot afford to do so. With the rise of freelancer services, however, entrepreneurs in this position can more easily outsource work and may be able to bring on one of these contractors full-time if they hit key metrics.
This transition needs to occur once the company is operational. By shifting away from micromanaging daily minutiae, the entrepreneur is able to become the spokesperson and face of the company. Take Elon Musk, for example; the entrepreneur isn’t filing SpaceX’s taxes or trying to sell Tesla’s solar panels to other businesses but is focused on making sure his businesses are well-represented and intriguing to the general public.
Entrepreneurs often make one crucial mistake when shifting to a founder mentality: They hire all of their staff at once, giving the company too much exposure. A founder still needs to understand the infrastructure of how their company runs, and the best way is through firsthand knowledge of how the system operates. By putting in place a system and making sure everyone follows it, an entrepreneur is able to spend his or her efforts on seeing how their business fits in to the macro picture.
Adam Lyons is the founder of The S.M.A.R.T Blueprint. As a business strategist and serial entrepreneur, Adam’s resume includes corporate crisis communication and messaging work with consumer goods companies that include PepsiCo, Nike and Nescafé. Adam specializes in increasing profit, monetizing audiences and crisis media management and public relations.