Founding CEOs; How Not to Get Fired by Your VC

When I was signing up for this year’s unConference, I was reminded how last year’s event was great because of the impromptu breakout sessions where it was fair game to discuss controversial subjects.  I wish every founding CEO could have been at last year’s session titled, “How founding CEOs can transition from visionary to leader.”  Though that was the title, it was clear from the get-go that this session was really about, “How founding CEOs can avoid getting fired before they ever make that transition from visionary to leader.”  Eric Paley and Katie Rae, the session leaders, did a great job covering this controversial subject, focusing on solutions to this common problem.

For the last decade, I have been “up close and personal” with the subject of founding CEOs getting fired.  As interim CEO at a half dozen companies I bridged the gap after a founding CEO was let go by his investors.  And as interim COO at another half dozen companies I helped the founding CEO endure the pressures of their job.  (As one founding CEO said when he called asking for help, “Des, I’m one Board meeting away from getting fired.  Can you give me a hand?”)

In last year’s unConference session, people had many reasons why founding CEOs get fired “early and often.”  The reasons that resonated with me are:

Focus ADD:  Though I’ve seen that a lack of focus is the #1 reason why companies fail, I’d not previously heard the term “Focus ADD.”  It’s when the CEO in fact does laser-focuses on one area; but only for today!  Tomorrow the “Focus ADD CEO” laser-focuses on a different area.  And the next day, he focuses on yet a different area.  The “Focus ADD CEO” drives their staff nuts, pulling them in different directions day after day.  Yes, I’ve seen this.  And I’ve seen how the inefficiency caused to the organization can be crippling.

Lack of Empowerment:  One not-yet-successful founding CEO in the unConference session said he had no trouble empowering his team to make decisions noting, “I empower my people. I only step in when people make a decision I disagree with.”  My response: “You can only say you are empowering your people when you let stand those decisions you disagree with.” I have also seen that, when you empower good people, they will give you their best effort.  But when people know you are going to change / adjust their work, they don’t put in the extra time to make it their best; they know you won’t consider their best to be good enough anyway, so why bother!

Micromanagement:  Going hand-in-hand with a lack of empowerment is a CEO who micromanages.  To move from visionary to leader, the founding CEO can no longer micromanage; they must let go.  In my work I have found that many founding CEOs find this difficult; few who find it difficult survive.

Common Symptoms:  All three conditions – Focus ADD, Lack of Empowerment, and Micromanagement – have common symptoms.  Often other members of the founding team abandon ship early.  Or there has been a revolving door of early workers.  Sadly, the founding CEO usually convinces himself – and his Board – that each person left for a perfectly good and logical reason; the CEO rarely recognizes that these people left due to faults in the CEO’s behavior.

Lack of Life Experiences:  Another problem I’ve seen is the limited life experiences of many young founding CEOs.  On occasion this lack of life experience gets the founder into trouble but the CEO still survives and excels; case in point, Mark Zuckerberg.  But most founding CEOs are not Mark Zuckerberg; most founding CEOs learn that the mistakes they make due to a lack of life experiences cause them to be fired sooner rather than later.

Solutions.  Many solutions were offered in the unConference session.  Fundamental to the solutions is the fact that the CEO job is a lonely one; therefore founding CEOs need mentors.  Mentoring might come from a paid “coach” who comes in, say, 10 hours a week and provides consistent advise and counsel.  Mentoring might come from an organization like The High Growth CEO Forum run by Bouzha Cookman, where CEOs from multiple, non-competing companies can provide each other with advice.  Or mentoring might come from a full or part time interim COO whose job remit includes both advising the young CEO and having his back.   (Aside, at the early stage of a start up, hiring a permanent COO is often risky; if the business pivots, that COO may no longer be a good match for the post-pivot company.)

Eric and Katie ran a great session.  MassTLC and Bill Warner will assure that this year’s sessions will be as good.

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