The Problem With Your Business Is You: Making the Shift From Founder to CEO

If your company is in a period of decline or stagnation, the issue with your business may just be you.

learn more about Darrell Kopke

By Darrell Kopke

Opinions expressed by Entrepreneur contributors are their own.

Often when a company reaches a growth plateau or has a misstep in the business plan, the founder blames others when in actuality it may be them.

I recently met with a software company that saw five consecutive years of stellar growth, peaking at $6 million in sales, followed by two years of stagnation before sales started falling. The founder, who manages a team of 80 people, is overworked, tired and stressed, yet pushes himself to try and regain the momentum of three years previous.

A little dig under the surface and what becomes clear is that the founder is still writing marketing copy, correcting coding mistakes and attending all tradeshows and sales meetings. He has a senior leadership team but consistently undermines their decisions by making snap decisions that change the nature of projects. There may be 80 people working for the company but only one decision maker.

Related: Searching for Wisdom? Search Yourself.

From the founder's perspective, the reason for stagnation is the combination of a weak marketing team, a competitive job market for developers and clever moves by competitors. My interpretation is much simpler: To find the cause of decline or stagnation, the founder need look no further than the mirror. Think of it like this: The initial success and traction was a result of your intellect, passion, vision, hubris and work ethic. You were responsible. If you are currently facing stagnation, however, you cannot escape responsibility now.

The shift from founder mentality to CEO mentality is not a natural progression. Founders who have built their companies by controlling all elements of their business find it difficult to let go and let others lead the charge. They fear they will lose touch. Every hands-on founder reaches their saturation point, a time when there are simply not enough hours in the day to have your hands in every project. Founders who do not let go become bottlenecks to the growth of their organizations.

For those making the shift from founder to CEO, here is how to handle the transition.

Value your time at $1000 per hour. As a CEO, you must value your time above all else. Measure your life as if it is worth $1000 per hour and make decisions on how you spend your time accordingly. Effective CEOs ask themselves, "What's the best use of my time right now?" Working on materials that a junior copywriter should be completing is not good use of your time. Instead, focus on revenue creation worthy of that high hourly rate.

Related: Why Being Self-Critical Can Make You a Stronger Founder

Do nothing and manage everything. A shift in mentality is in order. CEOs must work on their business, not work in the business. Effective leaders align their team around a clearly defined set of desired results and then manage for these results. Manage the who, what and when, not the how. By taking your hands out of the how you open yourself up to the capacity required of a CEO.

Become the chief why officer. Context is important in leadership. By framing yourself as the "Chief Why Officer," you are always reminding your team why the company is doing what it's doing, why you exist and what your legacy will become. These reminders allow the team to rally around a shared set of core values. Guiding people on your values provides context for their decision making. All levels of your organization can align their decisions around a set of intentions.

Founders who successfully shift from founder thinking to CEO mentality do not lose touch with their businesses. Instead, they open themselves up to the capacity to lead the company to a brighter, more prosperous future.

Related: The Secret Sauce of Successful Entrepreneurs? It's All in Their Head.

Darrell Kopke

Co-founder and Principal, institute B

Darrell Kopke is the co-founder and principal of InstituteB, an accelerator for businesses that put profit and societal value on equal footing. Kopke also holds ownership positions in several growth companies and a board position with The Gratitude Aeffect Foundation, a Vancouver-based charity devoted to ending homelessness. Prior to InsituteB, Kopke was the general manager (and sixth employee) at Lululemon Athletica.

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