A business’s founder has the incredibly important and rewarding task of building a venture from the beginning. While many continue to run the business themselves, statistics show that by a company’s third year, only 50 percent of original founders hold the role of CEO. There are a variety of factors that contribute to such a change, and occasionally this was the founder’s goal all along. Regardless, when a business surpasses $20 million in revenue, it’s time to decide if the individual who initially launched the business is able and willing to take on a C-level role.
Are They Adaptable?
Once a corporation reaches a certain height, the concept and rate of change undergoes a major shift. When board members and even shareholders become involved, change management and its impact on the long-term growth strategy of the business becomes one of the most crucial skills in company leadership.
Take a look at how a founder like Jeff Bezos of Amazon.com has been able to react to and stay in front of trends and movements in the e-commerce space to morph his online bookstore into a global powerhouse. Not every founder is going to be a Jeff Bezos, but the ability to manage the process of and reaction to change is a key trait for a CEO.
Are They Able to Manage Growth?
Another factor to consider is how a founder manages growth — both funding and team size. If a startup achieves success, it’s not uncommon for that venture to go from a bootstrapped staff of five to a Series A-funded organization with over 50 employees in a few short years. This is a tremendous accomplishment! However, this is where some companies can begin to falter. An infusion of capital and people of this magnitude can become too much for the original leadership to handle, and a major indicator that leadership may need to shift.
Are They Board-Ready?
One area in which an original founder often shines is when it comes to communicating and exemplifying the overall brand. Whether it’s presenting to a potential client or giving a speech at a company picnic, this individual has the passion for the business ingrained within them. This level of excitement and dedication is extremely infectious. However, when it comes to ideal C-level candidates, the term “board-ready” becomes more common. Is the company founder able to bring this level of familiarity to a room full of investors or advisors who all have opinions on how the company should run in order to achieve maximum success?
Just because the founder is the right person to start a business from nothing, does not necessarily mean they are the right person to continue its growth. Even if the C-suite is not the right fit for the founder, many are still highly involved in their business. Should a founder no longer have the necessary skills to take the business to the next level, this need should be identified early on to ensure the corporation continues to grow.
If your company is considering whether or not your founder is C-suite-ready, 4 Point Consulting can help! Contact us to learn more.