Oct
06

Entrepreneurial Planning Blog Topic 8

William Casey Asbill-Beck

ENT – 600: Entrepreneurial Planning

 

Blog Topic Eight

 

 

Discuss scaling issues as a startup evolves through various stages to maturity (Chapter 10, The Founder’s Dilemmas; “Transitioning from a Startup to Growth-Stage Company”).

 

 

Failure, Success, and Founder – CEO succession are examined in this chapter of the Founder’s Dilemmas.  As we have read through the Founder’s Dilemmas, Noam Wasserman guided us through various examples of how founders and CEOs make mistakes.  Part of the moral I will be taking away from the Founder’s Dilemmas continues with the idea I ended on in the last blog topic.  That is, participating in founding, owning, and operating a business is inherently risky.  This means, everyone is bound to make mistakes in the business world.  What Wasserman’s examples all seem to have in common is their ability to learn from their mistakes, instigating positive change, and continuing forward.

In the pursuit of a start up business growing into a thriving company one defines roles, hires additional founders and finds investors.  Titles are given along with their associated responsibilities.  Decisions are made in start up and transition stages that will alter the course of your company in the preforming stages later down the line.  Throughout the growth of ones company, change will no doubt occur.  Change in the roles, responsibilities, job titles, number of board members, and individuals on the board or investors will all fluctuate with the progress of the company.  As a result of whatever change may occur, founder-CEO’s may need to explore the idea that another individual may be best suited for the CEO title.

The ideal style of CEO succession is a voluntary one triggered by the founder.  This is when the founder-CEO decides to step aside for a new CEO.  This method offers the least amount of stress.  Another scenario is when a board member triggers change because they believe the founder-CEO to be poorly handling responsibilities.  There is another scenario in which the founder-CEO is preforming and still must succeed their role.  Wasserman refers to this as the paradox of entrepreneurial success.  Sometimes a CEO is not capable of adapting and growing with the company they built.  Their skills could be extraordinary in some aspects that were once helpful for business startup, but their skills could be out dated or no longer required for where the company is at.

Just because a founder-CEO may no longer have that position they may still have a place in the company.  All of these methods of succession described have their own outcomes.  Some individuals completely leave the company while others find a new position suited to them.

Possibly one of the hardest dilemmas a founder-CEO will face is when to recognize the opportunity to bow out gracefully, and on your terms.  As Wasserman concludes it is pointed out that founders can gain some control over when they lose control of the startup by getting ahead of the board and initiating the succession themselves.  When you love something, sometimes you have to learn to give it away.

Comments

  1. The ideal succession is one where the Founder realizes he or she is limiting the success of their company and decide to take a smaller role. They still have the ability to help the company in some capacity but acting as the CEO isn’t in the best interest of the company. The succession for some entrepreneurs will be difficult. It goes back to wealth or control. Those that decided to become entrepreneurs for control may have a difficult time stepping down.

  2. I would think that the hardest dilemma for a CEO is when they are performing at the top of their game, yet still have to recede their position. I would also think it would be difficult to drop their CEO title and take a lesser position. They may be looked at differently by employees.

  3. My opinion is that one of the things that makes starting and owning your own business so appealing, is the chance to be stretched in new ways and develop a self awareness of our strengths and weaknesses, beyond what is typically offered to most as an employee. It offers an opportunity to be totally engaged with something we care about. With all the changes all the way, mistakes are a sure thing, but hopefully we can recognize our mistakes early and learn from them. I have yet to start a full time business, but if your were successful, it sounds like it would be a wild and fun ride. I could relate to how that would be hard to give up.

  4. Ashlei Harris says:

    I would think that it would be a little awkward for a CEO to step down but remain at the company in a lower capacity like Whitney stated, but this may just depend. It is important for the CEO to know when it is time for him or her to leave the company or step down from the CEO positions for the betterment of the organization.

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