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The Challenges of Transitioning from Entrepreneur to CEO

When a startup succeeds in moving to the next growth phase, it often comes as a shock to the founder or lead entrepreneur that his or her skills don’t automatically translate into those of a high-functioning chief executive officer.

Taking a closer look at the experience, this shouldn’t really be so surprising. After all, an entrepreneur’s “natural habitat” is often deep inside the weeds of his or her fledgling business. Attending to every detail, no matter how small, is within the founder’s purview since who else will see to these nagging but crucial details?

A CEO, on the other hand, must adopt a broader outlook and make far-reaching decisions with confidence. The company’s long-term success depends upon his or her ability to move from a preoccupation with day-to-day operations to a strategic vision of the future, coupled with a willingness to lead others in the path to get there.

Here are key challenges every entrepreneur faces in stepping into a larger leadership role:

Let go of the startup mentality. Perhaps the most difficult psychological transition lies in simply letting go of control. As CEO, you can no longer oversee every minor task, be they related to sales, marketing, finance, managing employees, etc. The more time you spend clinging to these low-level activities, the less time you have to focus on improving your product or service to compete in the marketplace. This kind of micromanagement is unsustainable in the long run.

Become a master at delegation. A startup generally consists of a mere handful of employees. Rapid or consistent growth demands hiring a larger workforce. But entrepreneurs sometimes flounder by hiring people who are more or less qualified to handle specific tasks, but can’t be trusted with greater responsibilities. Viewed in the context of long-range success, this is a huge mistake.

“Delegating responsibilities and trusting in the people you’ve hired to execute” is among “the best things you can do to grow your business,” notes Hatchbuck CEO Don Breckenridge. “When you give employees the autonomy to take ownership of a task or project, they are motivated to excel.”

Hire strategically. The motivation to excel, moreover, is likely to occur if you bring on smart, talented and ambitious individuals. For some ego-bound startup founders, that’s a threatening prospect—but hiring only mediocre job candidates ensures you’ll be stuck in the weeds, whether you want to be or not.

Build a healthy culture. With a talented workforce in place, a CEO’s next responsibility is building an upbeat and collaborative culture. Again, this entails the leader’s willingness to establish broad cultural guidelines and let the culture-building process unfold on its own from there.

As Canadian entrepreneur Darrell Kopke notes, “The extent to which this corporate culture is one of effective execution and personal empowerment (good things) or one of tolerated abuse, blaming, politics and deflection (…not so good things) is, in my opinion, simply a manifestation of the unresolved issues of a founder who’s still calling the shots.”

For many entrepreneurs, transitioning into top CEOs means relinquishing ego and embracing a higher concept of business leadership.

Lee Polevoi, a former senior writer for Vistage International (a global membership organization of CEOs), is a freelance writer specializing in topics concerning CEO leadership and small business. Learn more at polevoicommunications.com.

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