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Based on Noam Wasserman’s The Founder’s Dilemma, 4 out of 5 entrepreneurs step down as CEO, either because they found they weren’t fit for the role or because investors ousted them from the corporate. This adds as much as the notion that entrepreneurs rarely make good CEOs.
However, a recent study showed that corporations with founder-CEOs were valued 10% higher during IPO. There’s a premium related to having the founder as the highest executive when an organization goes public.
Successful entrepreneur-CEOs, resembling Jeff Bezos of Amazon and Larry Ellison of Oracle, led their corporations to massive growth before stepping down as chief leaders. I began my entrepreneurial journey at a young age and eventually established Admitad in 2009, which has since grown to change into considered one of the world’s largest partner marketing networks, consistently reaching over 500 million customers globally every month. After years of growing the corporate and acquiring several businesses, we decided to consolidate all entities under the wing of a latest parent company, Mitgo, where I currently serve because the CEO and remain the only owner.
Here are my three key lessons for the transition:
1. Know when to evolve as an entrepreneur
Entrepreneurs and CEOs have distinct roles. Entrepreneurs are visionaries who create and transform groundbreaking ideas into successful, viable businesses. CEOs, alternatively, execute the vision and construct the infrastructure for the business to succeed, scale and adapt.
While many entrepreneurs can successfully grow their businesses, they often struggle to maneuver beyond the entrepreneurial level of sustainability. To reach a bigger scale, a startup needs a CEO. Embracing this natural evolution is important for achieving true success.
To me, the conclusion got here after I noticed a decline in our business’s growth. We needed to transition to a different stage of development and implement a management system.
Recognizing the necessity for change and having the courage to take motion are vital elements of leadership. To change into a CEO, you should develop strengths in structure, organization, and delegation. It’s a cognitive, proactive and deliberate process. It requires learning latest skills, adopting latest systems, and trusting others to make critical decisions.
Related: Here Are the Key Traits of a Top-Tier People Leader
2. Nurture leaders throughout the company
Entrepreneurs often start their journey alone. Even when a small team joins, the corporate structure stays informal, with founders taking over multiple roles. However, because the organization grows, entrepreneurs must relinquish some control by shifting from a hands-on approach to delegating crucial tasks to trusted leaders.
Becoming that thin throat for all the things will not be thing. To create something great, something greater, you’ve to form leaders inside your organization. Nurturing leaders goes beyond simply assigning tasks to individuals. It involves making a culture that values and fosters leadership qualities at every level.
As a CEO, you should empower leaders to make critical decisions, take ownership and drive the corporate’s mission forward. Decentralization means letting go of a tightly controlled ship that relies on a top-down approach to decision-making.
Once you stop micromanaging every detail of the corporate, you’ll be able to concentrate on larger strategies to scale your corporation and ensure its long-term success. To implement this principle, Mitgo now has business units led by specific individuals who act as CEOs of their respective units. They still report back to a board but have been trained with the essential skills to guide.
3. Build a sustainable business — don’t just create a “money cow”
It’s normal for entrepreneurs to construct a business to make numerous money. After all, who doesn’t enjoy significant revenue and profitability? So, founders typically concentrate on quick wins, immediate profits and short-term gains.
But every visionary entrepreneur should embrace a deeper and more enduring concept: constructing a sustainable business. We need to construct corporations which are transferable and can proceed to work even once we’re out of the image.
It starts with the legal. When the founder is gone, they usually are the one founder, the corporate has no alternative but to die. I need my company to live long after.
Building the legal foundations to make the business transferrable is just the beginning. As a CEO, you’ve to pave the road that others can follow without the danger of failure. This means putting signposts to guide them along a clearly designated path. It also means realizing that all of them have families and that the choices you make can impact them.
Related: 8 Ways to Turn a Good Leader Into an Exceptional One
The leadership qualities of CEO
Entrepreneurs are born leaders. From an early age, they’re inherently creative and possess the abilities to make things occur. During the early stages of the business, they lead by example and play an important role in driving the team’s success.
However, transitioning to a CEO role requires additional leadership qualities. Being CEO means acknowledging that you just cannot do all the things alone. You must delegate responsibility and empower the team to take ownership of their work. You should be receptive to feedback and hearken to what others need to say.
In a consistently evolving business landscape, you should be willing to pivot when essential and make well-informed and timely selections. You must also take accountability for the outcomes of your decisions and stand behind them.
Furthermore, it’s best to proceed to encourage a culture of innovation and proactivity. This includes promoting a forward-thinking mindset and staying on top of trends. As CEO, you should proceed to search out opportunities and address potential issues before they arise. Remember, you might be shaping the long run of your organization.
In the initial stage, you might be the nucleus that holds the entire team together. At some point, you realize you’ll be able to’t do it on your individual. You take individuals with good soft skills, teach them the hard skills and provides them time to grow. You depend on them to assist lead the corporate when you pursue strategies to grow the business. That’s the way you change into a CEO.