‘Entrepreneurs make bad CEOs’.
This is a statement I hear a lot in the venture capital ecosystem, and as with most things, there’s some truth in it. When founders lack mentorship, development, self-awareness or willingness they often do make dreadful CEOs, which is probably why only 1 in 4 companies retain a founder as CEO at their IPO.
It doesn’t have to be that way. Founders can become incredibly powerful CEOs if they proactively build the leadership skills and team to enable that; and it’s worth it, for both the founder and the business.
Having poured their heart and soul into their start-up, founders are often devastated if they are shoved out to make way for ‘a professional CEO’. Meanwhile, research suggests there is both a performance and cultural benefit to the business of retaining founders as leaders.
While it’s eminently possible for an entrepreneur to become a powerful CEO, the odds are stacked against them.
Let’s first compare the experience of a Founder CEO with their corporate counterpart. The typical CEO of a large corporation will have spent 15 to 20 years growing and developing first as a manager, then as a leader, before they get a crack at the top job. In the meantime, the founder of a fast-scaling start-up may be expected to shift from entrepreneur to CEO in 12 months, not 12 years. Adding the fact that the superpowers they’ve developed as entrepreneurs will become the kryptonite of their effectiveness as a CEO, and you can see what a challenge they face. Only founders with enough willingness and humility to ask for help, and the right kind of support and counsel around them, are likely to make it.