At Lemnos we help our portfolio companies transition from two or three-person founding teams to growing companies with strong functional capabilities and process. In our first article in this series, we highlighted career paths available to engineering founders as their companies grow. As a business-oriented founder or CEO, how do you scale as your company grows?
The Many Roles of a CEO
If your co-founders are focused on engineering, you probably inherit everything else. Leading Sales, General, and Administrative (SG&A), you manage the major non-production costs associated with your product: Finance, Operations, Human Resources, Legal, Facilities, IT, the list goes on and on. You often are the chief spokesperson or salesperson for the company because you understand the product and company vision intimately. And of course, when you need to work with strategic partners and the venture community, you’ll be in the meeting.
CEO Versus Other Roles
Much like with engineering co-founders, a growing organization means more people, more information, and more work. You can hire individual contributors and external resources to manage many of the SG&A functions, but sooner or later there are too many decisions and inputs for one leader to handle. At this critical junction, you face the decision all CEOs face. Do you bring in experienced leadership to direct your functional areas, or do you bring in a talented CEO, so you can focus on a role that you love and are great at?
External and Internal Focus
Being CEO means you have a many internal (company) and external tasks that require both robust IQ and EQ. Some people thrive in the external spotlight, whether on stage in front of thousands at a conference, closing a key deal with a Fortune 100 executive team, or in front of a TV camera for a national press interview. Others thrive inside their company’s offices, solving key product and personnel issues or driving organization development. The key word is “thrive.” Which of these situations leaves you filled with pride or energy when you are done with them? Take the role and responsibilities that you do best and leave you energized, then hire strong functional leaders to take on what you can’t (and don’t want) to do.
A great CEO is a chameleon, a polyglot, and shock absorber merged into a single body. Your superpower is seamlessly changing roles and your corpus of knowledge multiple times per day. One moment you are helping close a key customer deal, an hour later you are dealing with a detailed accounting issue, and a bit later you are diffusing a conflict between two team members. As a shock absorber, you are everyone’s shoulder to cry on, but there is often no shoulder for you to do the same.
It is a tough role that is externally glorified and internally exhausting. Forget the ego boost associated with the title. If are you expert at context switching many times per day and carrying the emotional weight of your entire company, then keep being the CEO and hire functional leaders for the other responsibilities.
If the above doesn’t characterize you well, use the filters below to determine the best functional leadership role for you.
Externally Focused Roles
- Business Development/Sales: Are you an extrovert? Do you love being with customers, telling them how your product solves their problems? Are you ok with being responsibility for closing deals, bringing in partnerships, and meeting revenue targets? It’s a tough job, but it excites passionate extroverts. No one at the company knows more about the market, product, and customers than an effective Business Development or Sales lead.
- Head of Product: Do you love being the voice of the customer throughout your company? The Head of Product and their Product Management team define what the rest of the organization builds and champion the customers’ needs in cross-functional decisions. This role requires strong research skills, the ability to objectively represent the customers’ needs, and cross-functional empathy to weigh the risk and reward of each feature you are asking for.
Internally Focused Roles
- Chief Operating Officer (COO): Does the entire company come to your door to talk and work through problems? Does organizational structure and operational efficiency motivate you? COOs merge functional area expertise with a high EQ to help their internal teams reach peak efficiency. They are the equivalent of the head of Engineering for all the other functions of a company.
- General Manager: Have you demonstrated proficiency at marketing, finance, and engineering leadership? This is the rarest individual who thrives at the intersection of business and engineering, who can guide the profit and loss (P&L), own the go-to-market strategy, and lead the engineering effort that responds to customers’ needs.
Always a Founder
For many, CEO is the ultimate title, and transitioning to a functional leadership role might be considered a failure or demotion in the eyes of peers and business colleagues. Viewed more strategically, however, you will always be a founder, and you should judge your professional success from the achievements of your company. If your personal happiness and the company’s success intersect for you in a functional leadership role, embrace that change and your company will be better for it.
This decision is uniquely personal and requires a great level of honesty and self-awareness. Every option is a wonderful opportunity. The right choice is the one that brings you the most personal satisfaction and the maximum value to your company. The only wrong answer is avoiding the decision as your team grows.
Read more articles in this series: