My colleague Jon Scott recently commented on how CEOs need to grow up with their companies. The same unbounded enthusiasm and Wild West approach that got them this far, might not get them to the next level. Very true but what happens if you have never been part of a bigger company, or never got your MBA and dont have the skills needed to define and exercise the new and better processes your bigger company really needs?
In many cases I see entrepreneurs opting to step into some non-descript Founder role and bring in a Professional CEO. Maybe the Founder even steps aside completely or gets promoted to the Board. This is often the case when major investors have put money into the company and want a more experienced leader.
I cant tell you how many times I have seen this model fail. The new CEO often doesnt know the space as well as the Founder and rarely has the same passion (or stock-based motivation) as the Founder. The new CEO has a mandate to grow the business and will often demand huge salaries while spending on Sales and Marketing like a drunken sailor. After a couple of years, the promises arent met, the CEO leaves (usually with a great, big severance more cash out of the company) and the Founder is invited back to pick up the pieces with his more diluted ownership.
When I talk to Founders that are contemplating this route, I almost always suggest that they join some serious business group so that they learn the skills that they need rather than hand over the reins of their retirement fund to a hired gun.
There are a number of such groups in Canada and the United States. YPO is probably the biggest. Ones like Vistage (US) or TEC (Canada) are smaller but much more hands on take your pick but pick one.
Before you hand your baby over to a stranger, take some time to see if you can learn some new skills. After all you were smart enough to create this company maybe you really are smart enough to take it all the way. Maybe you really are Bill Gates.