The Hard Truth About Founders – and WHY Our Company Needs a CEO

The Founder Stereotype

“Founder” – sadly, in some circles, this title is met with disdain or eye-rolling.  

Images of carefree visionaries who don’t have a handle on reality may come to mind.

Images of “leaders” who have zero understanding of the financial aspects of the business: cash flow, income statements, balance sheets, even budgeting!

Images of the founders trying to make it with little to no strategy, using a “let’s try it” mentality while lacking focus.

Images of erratic hiring practices, giving roles to seemingly anyone they know because they “like” them.

Images of a hope for a multi-million dollar exit when the company currently has negative EBITDA (Calculated by adding interest, tax, depreciation, and amortization expenses to net income).

Images of decision-making based solely on gut instinct, without regard for metrics, KPIs, lead and lag indicators, or any data of any kind.

Images of founders who have the dreaded “Founders Syndrome”, and who get in the way of forward momentum.

The Truth About Founders

Well, I’m here to tell the world that no one – I mean, NO ONE – would have a job in this world if it were not for FOUNDERS.

Founders and entrepreneurs are the risk-averse crowd that the rest of the world needs. 

We need creative and innovative people to try and fail and try and fail and try and fail so the rest of us don’t have to.

We need the enthusiasm and irrational positivity of founders who have a love for creating something from scratch, from an idea, from nothing!!!

Growing Pains

But if we want a concept, a brand, an idea to have legs – and become more than a small, local business serving a handful of clients – things must change, and it’s not easy.

My Story

In 2016, my husband had been diagnosed with Thymic Carcinoma a year prior, and we were living in the uncertainty of whether his cancer would return.  We had been married for 26 years and were planning a belated 25th anniversary trip to Italy and Greece to celebrate the occasion.

At that time, I had been the Co-founder of Just Between Friends Franchise System for 13 years. We had 8 or 10 employees, and I was absolutely operating from a Founder-led mentality (see notes above) rather than that of a CEO. 

In the planning of our 25th anniversary trip, I quickly realized that I had to figure out how I could be gone on a 21-day vacation without having to work. Every other vacation that we took involved me working more than I like to admit. When the kids were little, I would work in the mornings, assuring my family I’d be available in the afternoons for fun (but still working on my cell phone if the need arose). But with this trip, I wanted it to be different. I wanted to honor my husband with my presence, meaning I needed to figure out how to let go of controlling everything in the business and ACT like a CEO!

The trip approached, and I used several strategies to be able to make it happen, the first being a lot of self-awareness – realizing I didn’t have to have my hand in Every. Little. Piece. Of. The. Business!

 The trip came and went, and I was able to be fully present while the business ran without me!

Challenges and Growth

I don’t want to paint a picture that everything was rosy after that. It came with a lot of challenges, but it was a HUGE inflection point for me and the company. I realized I was the bottleneck, and  JBF would not be able to grow unless I could replace myself in every way possible.

I ended the year by promoting a colleague to Director of Operations and handing over half of my job responsibilities. Again, this was not easy, but it was a much-needed first step in transitioning from a founder-led to a CEO-led company.

Does this resonate?

If you are a founder and entrepreneur reading this and recognize some of the images above in yourself, I want to share with you some significant shifts in responsibilities and skill sets needed to scale your business (and stop getting eye rolls).  You may already have some of these skill sets handled, but it’s always good to have a reminder.

And if you are an employee, friend, parent, cousin, or child of a founder or entrepreneur-led brand and you hope for more for the founder or entrepreneur in your life, please share these tips. We all have enough YES people in our lives that keep us blinded by our own bias to certain realities. Most of us want more for ourselves and our families. It never hurts to have a gentle reminder of where our focus could be for the future of our family and our business. Your employees and family are counting on you to have some self-awareness. Believe me when I say I speak from experience.

Transitioning From Founder to CEO: Key Considerations

What does it take to move from Founder to CEO you may ask? Well, let me share my thoughts!

While the founder is often focused on the initial vision and creation of the company, the CEO's role is more focused on managing and scaling the business. Here are some key factors to consider when transitioning from a founder to a CEO:

Vision and Strategy: As a founder, you likely had a vision for the company's direction. As a CEO, you need to refine and articulate that vision, create a long-term strategy, and align the organization around it. This involves setting clear goals, establishing priorities, and developing a roadmap for the company's growth. This is the first step in your CEO role…set a clear course and bring others along with you!

Leadership and Team Building: As the CEO, you need to build a strong leadership team and establish a culture that attracts and retains top talent. This includes hiring executives who complement your skills and can help drive the company forward. It involves letting go. It also involves delegating responsibilities, empowering your team, and fostering a collaborative environment. As founders, it’s so easy to want to keep control at the detriment of growth. YIKES…I don’t want to be THAT person.

Operational Excellence: CEOs are responsible for overseeing the day-to-day operations of the company. This includes establishing efficient processes with the COO, managing resources effectively, and ensuring the company's financial health. Developing a deep understanding of the business' key metrics, monitoring performance, and making data-driven decisions are crucial in this role.

Communication and Stakeholder Management: As the CEO, you become the face of the company and its primary spokesperson. You need to effectively communicate with various stakeholders, including employees, investors, customers, and partners. Building strong relationships, managing expectations, and representing the company's values and interests are important aspects of this role.

Strategic Partnerships and Growth Opportunities: A CEO is responsible for exploring new business opportunities, forging strategic partnerships, and driving growth initiatives. This involves staying informed about industry trends, identifying potential markets, and pursuing innovative strategies to expand the company's reach.

Adaptability and Learning: The transition from founder to CEO requires continuous learning and adaptation. It's essential to seek feedback (yes, I know this is hard), be open to new ideas, and constantly evolve your leadership style. Developing self-awareness, resilience, and a willingness to learn from both successes and failures is crucial in this role.

Time Management and Prioritization: As the CEO, you'll face numerous demands on your time and attention. It's important to prioritize tasks, delegate effectively, and manage your own workload. Developing strong time management skills and focusing on high-impact activities will help you stay productive and lead the company effectively.

It is possible for YOU!

Remember that this transition will involve challenges (let’s normalize challenges in leadership), and it's important to seek guidance from mentors, executive coaches, or fellow CEOs who have gone through or are IN a similar journey. Continuously investing in your personal and professional growth will help you thrive as a CEO.  Believe me…I’ve been there.

Thankfully, the transition from founder to CEO is possible for YOU and others. I would love to help you figure out a strategy on HOW you can make this transition and scale your business for more INCOME and IMPACT.