Running a startup is a lot different than running a more mature company. Will you be able to make the transition? Here are three ways to find out.
As a CEO, it’s healthy to reflect on your ability to bring your company to the next level. Shakespeare’s King Richard II, contemplating his own leadership, calls for a mirror saying, “Give me the glass, and therein I will read.” Richard II’s impulse was right, if tardy: Getting a clear vision of yourself is critical.
Self-assessment is difficult –- the stakes are high and it’s hard to be objective when you’ve poured blood, sweat and tears into your company –- but it’s necessary. And sooner is better than later. Richard waited too long to evaluate himself, and his cousin exploited his weaknesses to break his reign. If you have outside investors, they’re going to be evaluating you almost every day. Better to stay one step ahead of them.
As a venture capitalist, I work with many talented founder-CEOs, and inevitably they all find themselves contemplating whether they are still the right person for the job. Very often, this occurs because they are doing a good job and the business is growing. But the role of a CEO is vastly different at a fledgling startup than at a successful company operating at scale. How that role differs is probably a topic for another column, but suffice it to say that it requires an incredibly agile executive to successfully lead a company throughout its lifecycle. It’s also worth noting that the role of CEO – at any stage - carries tremendous weight, with peaks and troughs that can drive even the hardiest executives to self-doubt. When a CEO I work with begins this assessment, whether it’s self-initiated or compelled by other constituents, I offer the following three suggestions.
1. Strip away your preconceptions about CEO transitions. Understandably, the very idea of stepping aside carries serious baggage: Are you admitting to deficiencies, that maybe you are not the next Bill Gates or Steve Jobs?
The fact is, CEO changes are the rule rather than the exception in the development of large companies, both inside and outside the venture world. While the press celebrates entrepreneurs like Mark Zuckerberg, who take a single company from founding to popularity, most of the best CEO-entrepreneurs don’t captain one ship for life.
Brad Keywell, a Chicago-based entrepreneur who has co-founded a string of successful companies including Groupon, MediaBank, and Echo Global, says, “I ask two questions: Would I hire me as the CEO going forward? Do I appreciate what I don’t know and what someone else could bring?” In other words, he is looking into the mirror with another hat on – that of the shareholder. “I’ve learned that the company’s future performance, not the CEO role, is the best reflection of me,” he says.
The secret power in Brad’s approach is that CEOs of his ilk earn sweat equity in multiple companies over time. Venture capitalists call these individuals serial entrepreneurs, and they are the most reliable wealth creators in the world. Look at it this way: If you were the investor, would you invest in one ship or in an armada?
2. Find independent, experienced advisors. Everyone -- not just CEOs -- can benefit from peope who can re-focus our necessarily distorted self-images Soliciting input from truly objective parties can help you achieve a more balanced view of yourself than mere navel-gazing.
A powerful tool for CEOs is the 360-degree review process. Experts gather anonymous input from employees, customers and other constituents and distill those observations for the CEO. At New Enterprise Associates, we do 360s regularly and they are effective. Pay particular attention to feedback from customers or investors in cases where there has been an exchange of products or services, and also to your employees. The former give you a sense of how you measure up to the expectations you set. The latter delivers the brutal honesty that comes only with intimate knowledge and the cloak of anonymity.
3. Don't judge. My final suggestion for CEOs is not to judge your perceived weaknesses. Avoid Richard II’s reaction upon peering the mirror, when, not liking what he saw, he smashed it, portending the end of his reign. You wouldn’t be in the position you’re in—heading a successful company, and pondering your role in its future growth—without being a remarkable individual. Instead, take your insights, including your honest motivations, and match them against your company’s needs. Only then can you adjust your approach, your position, or the company itself, and journey on.
More from Inc.com: