When and Why Co-Founders Should Stop Managing Their Company
When you take the leap of faith and start your own business, you step into the unknown. For most successful entrepreneurs, that risk, in and of itself, sparks an incredible energy that propels you forward. Your life becomes firmly entrenched in your business, as you work to mold it and grow it. Your business truly becomes a part of who you are.
As you experience success, you find yourself going down a road where you are continually raising the bar. It’s the nature of most entrepreneurs to continue seeking growth, but at some point you see red flags that indicate it is time for a change -- you can no longer be the main driver for your business.
After 20 years as co-founder and executive officer of Seven Corners, Inc., I transitioned to chief revenue officer and then to business development, where I am now. These incremental changes in responsibility were directly related to an identified need for me to step away from management, by working “on my business” and not “in my business,” if I wanted the company to continue to grow successfully. With this final shift, I am no longer involved in the day-to-day activities inherent in managing the business, and I do not have direct reports. Instead, I foster my vision for the company by developing business opportunities and relationships.
So, how and why is it necessary for co-founders with a strong entrepreneurial spirit to make a move like this, especially for a business they spent so much time and effort growing?
1. Your skill set is not infinite.
You come to a point where you recognize that your knowledge and experience is limited in the scope of managing a business. You may know your industry like no one else, but there are many components involved in the operation of a company, and each of them requires a specialized skill set. Even the most well-rounded individual cannot effectively direct a functional area the same as a contributor with expert knowledge of a specific function. Entrepreneur Ashley Bodi explains it well when she writes, “I learned quickly that I needed employees with strengths where I didn't, so that there would be balance in my business. Find your super strength and exploit it, while you let others take care of things that slow you down.” What entrepreneur can argue with logic like that?
2. You cannot do everything.
When your company grows to the point that you simply cannot continuing directing all necessary activities for business, you need to understand a simple truth -- you can’t do everything. You may try to, and maybe you were successful previously, but you will reach a point when you start dropping the spinning plates. This was a tough one for me but crucial to the company’s success. Since my change in roles, there have been times when I have had to refrain from solving a problem presented to me, because it was outside the scope of my new position. It was an internal struggle -- my gut was to make the call and move on, just like I did in the past. I had to remind myself that another team member was responsible for that decision, not me.
3. What got you here, won’t get you there.
You followed a winning playbook to get to this point, but the rules are constantly changing. Entrepreneurs have a natural instinct to continuing growing, but often the situation, the capabilities and the effort that got you to one level will not take you to the next. You have to back up and examine your business model with a broad view, identifying the gaps, the opportunities and the solutions. And, even though you might not want to admit it, you will need help to do this, which brings us to No. 4.
4. New viewpoints are truly enlightening.
Hire people from outside of your industry to scale the company. They bring a fresh perspective, developed from their experience with different business models and outcomes. According to human resources experts Lee Hecht Harrison, “Left-field talent can be a source of innovation, a new set of eyes to study a long-standing problem. Or, perhaps they see the same product or service from a completely different perspective; instead of looking at it from the manufacturing point of view, they see things from the perspective of the end user.” In addition, it broadens your talent pool, providing you with a wider range of future team members. Take time with the hiring process to ensure the right fit and then let these individuals apply their ideas and solutions to propel the company forward. The benefit of transferring successes among industries is real.
5. Find a focus.
Freeing yourself up from operations will allow you to direct your energy toward your own competencies and put them to work for the company. For me, business development is my first love and my strongest skill. So, after way too much time in the office, I’m back on the road, initiating and developing business relationships.While it may not be easy to step away from a management role in your business -- entrepreneurs like to be in charge -- the benefits can definitely outweigh the difficulties, especially if you are seeking continuing growth for your company. And, it’s important to note that the change will not happen overnight. There will be an adjustment period for you and for the entire team, as you all learn a new way to work together to achieve new opportunities.