Are you cut out to be a Scale up CEO
Not many Founders make the transition from start up to scale up CEO — take the short quiz below to see if you are on the right track.
You have worked so hard to get the business up and running and to product market fit. It has been a rollercoaster journey so far, experiencing the highest highs and the lowest lows in the same day. It has been both exhilarating and exhausting.
You have achieved what most founders do not, real customers, paying for something you have created. It feels good.
But … just when you thought things might get easier, the pressure builds. Everything is still channelled through you. Everyone is still reporting to you. You still interview every new hire. You are continuing to wear many hats.
The stress levels are rising as your workload and demands on you accelerate. People’s issues seem to be growing exponentially. It doesn’t feel like fun anymore.
The Big Realisation — What Got You Here, Won’t Get You There
It dawns on you that you can’t carry on in the same way. And you realise you can’t do it by yourself any more.
“ Four out of five entrepreneurs are forced to step down from the CEO’s post. “
Noam Wasserman, The Founder’s Dilemma, Harvard Business Review
This is the inflexion point where you need to move from Founder to CEO. You need to scale up your capabilities, change some of your behaviours and reflect on your motivations. If you don’t you and your company will crash and burn.
Being A Start Up Founder Is One Thing, But Being A Scale Up Founder CEO Is Another
To transition your company from product market fit to a self-sustaining, value producing entity, you essentially need to:
- Rewrite your job description
- Hire smart people you can delegate to
- Stop solving everyone else’s problems, and focus on what really matters
- Inspire the great people you hire to flourish
- Create a workplace culture which truly differentiates you as a company
- Develop company-wide communication
- Stop doing everything and start leading
Many founders struggle with the transition and with figuring out what they need to do as a scale up CEO.
And in some cases investors lose patience and throw them out.
Some get through the transition but it’s an unnecessarily messy process.
Some find out the scale up is not for them and they prefer the hustle and bustle of the start up.
Take the Quiz — Are You Cut Out To Be A Scale Up CEO?
Decide whether you are able and/or want to make the transition from start up founder to scale up CEO by taking my short quiz below based on the key success factors a scale CEO will need to focus on (NB I have also created a more in-depth quiz with bespoke guidance and tips — click on this link to find it).
To take this short quiz, just answer the questions as honestly as you can. Strongly agree — 3 points, Agree — 2 points, Disagree — 1 point or Strongly Disagree — 0 points.
- I have more drive and ambition than most people I know
- My vision is big, it’s a waste of time thinking small
- My energy levels are rising as the company grows and my role evolves
- I have team members on my team who have better knowledge or expertise than me
- I know how to find and hire top talent
- One of my main roles is ensuring my senior team fulfil their potential
- I realise that the success of the business will be down to my senior team — business is a team sport
- I have intentionally designed the working environment and culture, and have not left it to chance
- I have created a board of formal and informal advisors to learn from and to give me feedback
- My company already has procedures, planning, forecasting, processes and systems in place to be ten times the size we are today
- I trust my gut but I have learnt to slow down on some of the more important decisions and to make sure I get hold of data to help guide me
- When it comes to my leadership I know what has got me here is not going to get me or my company there
- I am managing to delegate and confidently let go of tasks as my team grows
- I have stepped up the amount and the quality of communication I do internally and externally
- I have developed my storytelling skills to such an extent it is now one of key strengths
- I am developing my strategic thinking and consciously make time for it
- I am commercially-minded, focused on the numbers, and on creating a financially sustainable business
What’s your score? If it’s over 38 then you are well set.
Anything below doesn’t necessarily mean you are not going to be a successful scale up CEO. But it does raise some questions which you want to face up to.
There is no one play book for a scale up CEO to follow. You need to decide for yourself what type of leader you want to be and create a CEO job description that plays to your strengths.
But there will inevitably be areas e.g. skills, behaviours, attitudes, mindsets you need to get better at or change that perhaps don’t play to your natural strengths. And there will be areas you may not have thought of i.e. blind spots.
12 Key Success Factors Of A Scale Up CEO
Here’s what you may need to learn as you transition from Founder to CEO. Below you’ll find 12 of the key success factors behind the short quiz you have just completed. I have identified 17 in total and by completing the full in-depth quiz you will discover all 17 success factors.
These skills, behaviours or attitudes or mindsets have been identified from seeing the start up and scale up from all angles — as a founder, coach, mentor, director, venture capitalist, angel investor and from working with multiple founders over the last 25 years. I have experienced some wonderful successes but some heart-breaking failures too. And remember, we can learn from both our failures and successes!
#1 Ambition Reset
Ambition is one of the main factors that gets you through those existential crises facing every scale up and any day-to-day requirement to keep pushing things forwards.
The scale up Founder CEOs continue to increase their personal ambition as they progress from one level of success to the next. These are the scaleup entrepreneurs. They continue to double down on their commitment to learn and increase their own and their company’s capabilities.
#2 Energy, Motivation & Strengths
Motivations are our inner drivers, the ‘fire within’, that determine how we feel and how we act. Strengths are things you are good at and that give you energy.
Each of us has a unique fingerprint of what energises us. Unless you are energised by being the CEO of a scale up you are very unlikely to succeed. Why? Because it is going to get harder, and you are going to need all the energy you can get.
So having self-awareness and clarity about what energises you and how to manage your energy will materially increase your probability of success.
#3 Your Leadership Development
Leading a startup is really hard. Leading a scale up is even harder. You need to scale up your leadership skills ahead of the growth of your company.
You have to keep humble and keep learning every day. You need to make yourself a learning machine.
A commitment to developing yourself is not a selfish act. It’s a commitment to your team members and your business.
You get used to wearing many hats as you fight to get initial traction for your startup. As a result you get used to being involved in every aspect of your startup.
To scale up successfully you need to bring in new leadership talent to fill the gaps in the early team’s capabilities. You need to remove yourself, let go of roles you previously had and delegate real responsibility.
So that you can focus on working on your top priorities every day.
#5 Consistently Sell The Vision
To build a scalable and sustainable business that delivers more than shareholder returns, a compelling shared vision is essential.
Even when Amazon was a loss-making online book retailer, Jeff Bezos consistently talked about his dream of Amazon becoming the Earth’s Most Customer-Centric Company. This bold vision allowed him to make some big, long-term decisions. While some failed, some would ultimately help the business become one of the most successful on the globe.
The 10,000 feet view keeps the wheels turning even when the going gets tough. You have a clear vision of what needs to be accomplished and you don’t get bogged down in the finer details.
#6 Strategic Thinker
Founders like to keep their options open, but to succeed you need to make some hard choices. And that is what strategy is fundamentally about — making hard choices about what to do and what not to do. Making choices does not guarantee success but it forces you to focus on what matters. A company can’t do all things or be all things to all people.
As you move into the scale up stage you have product market fit and you are focusing on growth. You will probably have made a strategic pivot or two to get to where you are today.
But just because you have got to the growth stage doesn’t mean you don’t need to consistently evaluate and update your strategy to increase the probability of success.
Passion and excitement about the growth is one thing but actually being aware of how much money you have in the bank, how long it is likely to last, what your outgoings are and monitoring your business using data and metrics is what makes a proper scaleup CEO.
Financial discipline is often ignored as rapid growth can be at odds with profitability and cash creation. You might get away with it for a while but it will catch up with you. You can’t say you haven’t been warned!
#8 Sourcing And Hiring Talent
In a scaleup I often hear the excitement around how many people they are hiring. Sadly this is followed, a few months later, by the seemingly inevitable stories about the new hires failing to hit the grade and/or original team members leaving because they don’t like the new culture.
Bums on seats do not solve your problems and often exacerbate them. I’m with Jeff Bezos when he says, “I’d rather interview 50 people and not hire anyone than hire the wrong person.”
Hiring is often one of the biggest weaknesses in an entrepreneur’s toolbox mainly because most have not had any experience or training. Many of us have misplaced confidence.
As you scale, the introduction and effective execution of proper hiring processes is a necessity to maintain and increase your hiring success rate.
#9 Talent Development
Arguably a scale up CEO’s key role is to develop their people, a skill many founders do not have much experience of. And that is probably why few startups or scale ups focus much time on training or coaching. Many operate on the extremes — either micromanaging their team members to the nth degree or letting them get on with it with no management at all.
Professional or career development may sound like it is something that only big companies do but it’s not. Millennials and Gen Z employees, in particular, want career advancement. It comes up in company surveys my clients do time and time again.
The fight for talent is intense, promoting learning and growth within your company will attract the talent in the first place, help them get better whilst they are with you, increase engagement and reduce attrition rates. Don’t leave people development for the future, do it now!
#10 High Performing Teams
“Great things in business are never done by one person. They are done by a team of people.” Steve Jobs
Teamwork is almost always lacking in companies which fail and is present within companies that succeed.
The challenges of the world have continued to grow exponentially in terms of complexity, interconnection and speed of change, which means it is unrealistic for any one individual to have all of the necessary skills and strengths to lead the company to sustainable success.
Too often you come across teams with an average IQ of 110–120 where the team functions at a collective intelligence of about 60 i.e. performing at less than the sum of their parts.
Scale up CEOs need to learn how to not only build a high-performing leadership team, but also highly effective teams across the whole of the company.
#11 Design Your Culture
As the company scales it gets harder to maintain and build a strong culture. A strong culture can quickly turn into something toxic if founders don’t take steps to design the culture deliberately i.e. codify and reinforce it continually.
Culture is a complex thing which cannot be fully controlled; it is co-created by everyone in the business. But consciously understanding what it means and guiding the culture is a key part of the leader’s job.
A culture will be growing and developing with or without you, it will be hard to reverse it once it has grown some roots. The most successful companies create a culture by design rather than by default.
#12 Systems & Metrics
From the outside the growth looks really impressive but on the inside it’s chaotic. Those hacked-together processes are creaking at the seams.
You pride yourself on being nimble and fast-moving. Planning, processes and structure seem an anathema to you. Tension builds up between the need to move fast versus the need to build structure, plans and systems.
Standardising and streamlining processes means you do not have to constantly reinvent the wheel. It creates effective decision making and efficient work flow in every functional area.
How do you know these processes are working? You need to measure them. Metrics give you and your colleagues direction. People like direction.
The right metrics give you goalposts and the right processes give you the infrastructure to achieve them.
The Scale Up Is Very Different To The Start Up — It’s Not For Everyone!
If you are contemplating whether you want to transition from start up founder to scale CEO …
Firstly, you should give yourself a big pat on the back for being in this position in the first place. It is a sign of success.
Successful companies go through a life cycle, from start up to scale up to maturity. At each stage, the focus of the company changes, as do the skills, and attributes of the CEOs.
Not many founders go all the way from £1 to £1 billion. You may not want to go the distance or feel burnt out. You may have real energy for the scale up but others don’t think you are the right person for the next growth phase.
Unfortunately with this success means you need to make some tough decisions, get further out of your comfort zone, learn quickly and navigate some tricky transitions.
So my plea to you is that before you make any big decisions or let others make the decision for you, do some deep honest reflection and ask yourself these questions.
When I visualise 5 years ahead and I am the CEO of a company with 1,000 people, how does that make me feel? Do I feel energised when I reflect on my new scale up CEO job description?
But also invite a friend, coach or mentor to question your thoughts, reflections and choices. You may believe your reasoning wholeheartedly that you do or not have what it takes but your thinking may be flawed!
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As a next step I recommend completing the more in-depth questionnaire I have created called Are you cut out to be a Scale up CEO?. Answer the questions and we’ll send you a personalised report with feedback on the 17 success factors — mindsets, skills, behaviours or attitudes — behind scale up success. This will include a summary on where you are strong or have energy for and where the gaps are. You will also get 40 practical Top Tips on how to transition into a successful scale up CEO.
Originally published at https://www.fittolead.net on October 2, 2022.