By Scott Patchin
September 2, 2010
Her eyes were tired as she recounted the last month of long days dealing with all the daily work it takes to make her business go. People asking questions — most of them needing only a simple “yes” or “no.” Customers calling directly because they want action NOW. There was even that box of office supplies she had tripped over three times before deciding to put them away. All of this had distracted her and detracted from what she had planned to do, which was to spend a day reviewing where the business was today and charting a course of growth for the next 12 to 24 months. She really felt there was an opportunity to grow 50 percent or more if there could just be time focus on it for the next six months…
How do you know you’re an entrepreneur who needs to become a CEO? If this story rings true, it’s time.
The Moment of Awakening
For the entrepreneur, energy is focused on starting the business and growing the idea. It’s great to come to work every day as the boss, focused on work that has significance, and doing it over and over again. Even though the title on the business card reads “President,” “CEO” or”Owner,” startup means doing anything and everything that needs to be done. Inevitably, there comes a point when entrepreneurs look around at the work they’re doing, see the busyness and develop an uneasy feeling that there’s something more that needs to happen. Maybe, in that moment, the realization is about:
* A need to see positive cash flow that will be critical to paying off initial investors and prepare for the next round of financing.
* A need to see the people you hired handling the daily work.
* A desire to see the business hitting targets established in the business plan.
* Balancing your fear of leaving to take a long weekend with the family against your fear of not getting away to be a spouse and parent, if only for a couple of days.
This is the point when one thing becomes clear: the business needs a CEO to take it to the next level.
Becoming the CEO: Three Steps to Start Making the Move
Step one is to assess honestly whether the goal is a job or a business. In his book, Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Fast-Growth Firm, business growth expert Verne Harnish makes the observation that, “Most entrepreneurs actually don’t like working with anyone. This is the major reason why 96 percent of all firms have fewer than 10 employees, and a vast majority have fewer than three.” Remember that a business means more financial risk and depending on others to make decisions. If the answer is a business, then keep reading. If the answer is a job, then be content and look for ways to make the job fit into the life you’re looking for.
For the entrepreneur, the second step is defining how you want to spend your time. Is it in the day-to-day operations, generating new sales, defining and executing the growth plan, developing new products? Once you make that determination, find people to fill the leadership roles in other key parts of the business. If the entrepreneur has a passion for the day-to-day operational role, it might be time to find someone to drive the growth and vision of the organization going forward. Maybe the organization needs to hire a CEO? The reality is that a business will never grow beyond the limitations of the leader.
Finally, build a strategy and a plan to achieve it, including measurable goals. Begin the habit of reviewing the plan’s progress monthly. This is a big step and cannot be adequately addressed on these pages. While the first two steps are about personally making a choice to grow a business and getting the right people on the team to achieve that growth, this step is about defining the target for the business and having the discipline not to change it weekly, or even monthly. Verne Harnish’s book is a great resource in this endeavor. While Harnish covers much more than the strategic plan — and a rhythm for revisiting it — the book affords great details and insights into implementing this final step.
As someone who has successfully demonstrated the ability to start a business, it’s easy for an entrepreneur to jump into his or her next challenge: growth. The rewards are greater for a larger organization, but so are the risks. A thoughtful consideration of the questions raised above is critical in assessing the readiness of an entrepreneur to take that next step in the journey of his or her career, and toward the future of the business.
Click here to view a video from the author providing additional insights on this topic.
Scott Patchin is president of The trU Group, and is committed to helping organizations get the right people in the right roles to grow their culture and their business. Scott has served in leadership roles in the health care, banking and manufacturing sectors. He has called Michigan home for most of his life, and is committed to making Michigan the best state in which to work and live. Contact Scott at scott@thetrugroup.com.