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#4 Ways CEOs Can Navigate the Personal Challenge of Scaling Up Many entrepreneurs who found a start-up imagine they will grow alongside the company and take on a leadership role.

By Hanan Lavy

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Not every founder is meant to be a leader. But sometimes, the founders don't see it that way, and this can lead to conflict. Many entrepreneurs who found a start-up imagine they will grow alongside the company and take on a leadership role. It can be frustrating and an incredible bruise to the ego when they don't advance in their career along with a growing company.

However, if a founder is not thriving in a leadership role, there is no choice but to confront the situation and find someone who can handle the responsibility. This is painful, but necessary step and any company that wants to scale must have the human capital necessary for that growth.

Find a Mentor

Since this can be a highly emotional situation with potentially massive consequences for the company, you should make sure you're navigating it correctly. A mentor can give you sage advice, help you make sure you don't step on too many toes (just the right amount) and potentially help you avoid catastrophe. Other founders might find this topic hard to broach with someone who has been there from the start, but you must, as always, first admit there is a problem, then create an open, smart discussion around it. For those reasons, a member of the advisory board or a different interested party can act as a mentor and intermediary to make sure this process goes as smoothly as possible.

Specialized Roles

If you have a founder on your team who is having trouble making the transition to a larger structure, it might be best to have them focus on the core strength in which they excelled originally. If they focused on UX, then task them with special projects to deliver an amazing experience for users. Perhaps they were a guerrilla marketing wiz that helped your startup burst onto the scene. If that's the case, there is no reason they should be forced to become a corporate marketer. Instead, let them continue their efforts in focusing on key elements of the business that need special attention.

Title Change

Another way to handle it is by creating a title for a founding member of a company that will satisfy their ego but will not interfere with the company's growth. "President" could be a great title without execution responsibility; a transition from VP of Engineering to CTO could work in case a person is a super tech geek, but weak at managing people.

In other cases, that founder could turn into an advisor of the company and help from the outside. They would maintain most of their shares but wouldn't be involved in the scale-up of the company.

When All Else Fails

Some founders simply can't shift their thinking from startup mode to enterprise mode. They are reluctant to relinquish control of important projects to subordinates, insisting on micro-managing every detail. What can a company do with a founder who can't scale?

When all these solutions don't work, it's the CEO's responsibility to act, releasing the founder from his/her activities in the company. This should be implemented with a lot of care, as future investors will not be happy to see that a major shareholder that is not part of the company. (Cases such as these are why the mechanism of reverse vesting was invented. In case you haven't integrated it in your company, now is a good time to seriously consider it).

Any startup is not one person. It's a team-building an idea; it's a team working on the future; it's a group of people trying to change the world at times. Your goal as a CEO should be the success of the company, and that means bruising and ego or hurting someone's feelings, even if it's someone important. Not everyone was made to be leaders; some were made to be followers, and some—some were made to start a great company, but maybe not see it through.

Hanan Lavy is Director of Microsoft Ventures Accelerator in Tel Aviv. Hanan is a serial entrepreneur with 25+ years of experience, including leadership roles in both startups and corporations. He sold his first software when he was 12 years old.


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