The opportunities and challenges are immense at startup. The founder acts as a one-stop shop for everything. Finding resources to join the company, working with auditors to fill return, preparing a stamp for the company, and sitting next to developers telling a story – a go-to person for anything and everything. The founder does everything that he thinks that he “understands” and employ the members who execute what he thinks. The prime focus for the founder is the success of the idea or the concept. The life is cool on one aspect, as the people around are under the direct reach of the founder. Let me call this as level one CEO!
As the idea is getting acceptance from the market, the company becomes more organized. Critical functions that he has not specialized, are departmentalized with accountable people. Typically, HR, Finance, Admin and IT etc. Senior members are hired but the CEO personally ensure each outcome from the company. He enjoys doing his core and related areas. This is the best moment for any CEO. The collaboration level would be at the best with almost a flat organization within the core functional team – A level two CEO.
As the company grows, operations aspects of the company are delegated to an expert, typically a COO. This is a critical period for a CEO while scaling up. He often feels the effectiveness of the company got reduced with the absence of his direct contribution on various aspects. He suddenly finds things are moving slower. This often results into rolling heads and often CEO not graduating from level 2. However, many successful CEOs set the minimum principles, tools, procedures, and KPIs themselves before handing over the job to COO to ensure better grip on the company operations. Many fail to scale up and only a few succeed. Having common minimum operating principles and unambiguous interface points helps to convert the collaborations into the desired outcome. At this stage, it is common for CEOs still having direct responsibly for some areas, for example, marketing and products. – a Level three CEO
The next stage comes when the company has grown significantly, and his role would be restricted to visionary (apart from corporate games!). CEOs are typically a good storyteller and it reaches the immediate wing around him/her but most not beyond them. One survey discovered “92% of CEO’s believe their leadership teams agree with and can communicate their strategy. When surveying their leadership teams, it was discovered only 2% could.”. If not attended rightly, it can potentially lead to disaster in the company – Right alignment of the member across the organization is the most important key to success. A successful CEO can be promoted to Level 4.
You will reach a point where the company runs of its own without any presence from you. You would either focus inorganic or radical changes in the line of business. It would come to the state of self-actualization. – You are now a Level 5 CEO.
What is your level?