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- Alex Visotsky is a co-founder of Business Booster. The accelerator which since 2009 designed to help companies achieve effectiveness and systematization.
- With over 7200 trainings delivered, Alex Visotsky has helped numerous companies from 57 countries all over the world to implement the Business Operating System into their organizational structures, which lets them run and scale business without their owners’ participation.
- He is the author of multiple bestselling books, including “The Business Owner Defined”, “Small Business. Big Game” and others that have globally sold more than 130,000 copies.
If you’re a founder and directly manage your company, you’re hindering its growth. I’ve been a founder for 30 years and started 7 companies in different industries: manufacturing, distribution, repairs and consulting. Over the past 15 years as an owner of a business consulting company, I’ve worked with 6,000 entrepreneurs. I’ve noticed a clear pattern of how owners themselves limit business growth and condemn themselves to “slavery.” In this article, I share a key idea that will help you break free from this cycle and, most importantly, increase personal satisfaction from working in your business.
Is there a difference between being the founder and the CEO?
The CEO’s main job is to keep everything in the company running smoothly. Their main concern is the bottom line and the quality of the product or service. The team – managers and specialists – is their main resource.
On the other hand, the founder’s role is to bring about change in the company. But this often messes with the regular flow of things that the CEO oversees. Like when a new product is launched, it usually disrupts the normal work routine. This can cause some short-term issues but it could also help the company grow and increase its market share and profits.
A person who tries to be both the founder and CEO is always torn between these two roles. It’s hard to come up with big ideas and put them into action when you’re also dealing with everyday tasks. That’s why companies where the same person is the founder and CEO often struggle to grow quickly.
Why is it important to separate these roles for the success of the business?
A business has two main parts. One part is focused on projects and product development. This is usually the only thing going on in a startup, where the main goal is to create a good, working product and these are business owners’ duties. As the business grows, a second part comes into play, handling regular processes like advertising, sales, delivery, customer service, and PR that a CEO should run. This is when it becomes necessary to separate the roles of owner and CEO.
A lot of startups don’t do this, which can lead to a decline and even the end of the business after an initial boom. The companies that grow the fastest are the ones that bring on a good CEO to handle day-to-day operations.
Can being both the founder and CEO ever work out? Are there any success stories, and why did they work?
It can work if there are multiple founders in a company. One can be the creative genius and another can handle the management, organization, marketing, and delivery side of things. Like Microsoft, which was started by Bill Gates and Paul Allen in 1975. Gates was the CEO and Allen focused on developing the software.
Another way it can work is if the business is focused more on processes and productivity, like Starbucks. In these kinds of companies, coming up with new products and projects isn’t as important. A coffee shop doesn’t need constant research or new product development like a tech company does.
How do you find a good CEO for your business and make sure they do well in their role?
Before you start looking for a CEO, you need to lay down some ground rules for your company. You should establish the type of culture you want, and the tools you’ll use. Different companies have different vibes – some feel like a college campus, others are more like a factory. This will affect how you plan, have meetings, measure success, and so on.
The founder should establish these rules. A good, experienced CEO shouldn’t build the company based on their own ideas alone. In our group of companies, there are several CEOs, and together with co-founder Valentin Vasilevskiy, we provide them not only with basic principles and mission, but also clear regulations regarding what the functional organizational structure should be, as well as principles of performance measurement and financial management. Our CEOs work successfully according to these rules, but at the same time, we do not immerse ourselves in operational activities.
Also, it’s important for the founder to manage the CEO. This means regular meetings, a system of accountability, and key performance indicators. This way, it’ll be clear where the CEO is doing well, and where they need help. Even a newly hired CEO can get up to speed quickly with this approach.
Ideally, though, you should try to find a CEO within your company’s top management. They’ll have a deep understanding of the company, its products, and its culture. It’s not often that a young company has experienced executives, so it’s up to the founder to set the rules and provide training and mentorship.
What happens when a hired CEO doesn’t do well? What can we learn from big examples like the CEO who almost ruined Apple?
A CEO only goes off track if the founder isn’t doing their job: not providing training, not meeting regularly, not adjusting plans, and not monitoring the CEO’s successes and struggles. This can have disastrous consequences.
Apple’s big mistake, when they kicked out Steve Jobs and hired a new CEO, was not giving the manager clear instructions and making sure he understood how the company worked. The new CEO tried to implement his own ideas, made some bad strategic decisions, and even outsourced production. Even though the products were decent, customers felt something was off. Licensing their operating system to other companies almost put Apple out of business.
The hired manager tried to change the company based on his own ideas, which didn’t match the founders’ original vision. The company suffered greatly as a result. It was only when Steve Jobs came back and put the company back on its original path that things got better.
I believe that a hired CEO could have done a great job but because the founders let things slide, Apple nearly went under.
