Are You Cut Out to Transition From Startup to Scale Up CEO?
Take the short quiz below to see if you are on the right track
You have worked hard to get the business up and running and find product market fit. You have achieved what most founders do not, real customers, paying for something you have created. It feels good.
But, just as you thought things might get easier, the pressure builds. Everything is still channeled through you. Everyone is still reporting to you. You still interview every new hire. You are continuing to wear many hats.
The stress levels are rising as your workload and demands on you accelerate. People’s issues seem to be growing exponentially. It doesn’t feel like fun anymore.
It dawns on you that you can’t continue in the same way. What got you here won’t get you there. And you realise you can’t do it by yourself anymore.
You need to scale up your capabilities, change some of your behaviors and reflect on your motivations. If you don’t, you and your company will crash and burn.
This is the inflection point where you need to move from Founder to CEO.
And yet, according to Noam Wasserman, The Founder’s Dilemma, Harvard Business Review, “Four out of five entrepreneurs are forced to step down from the CEO’s post.”
Being A Startup Founder Is One Thing, But Being A Scale Up Founder CEO Is Another
To transition your company from product-market fit to a self-sustaining, value-producing entity, you essentially need to:
- Rewrite your job description
- Hire smart people you can delegate to
- Stop solving everyone else’s problems, and focus on what really matters
- Inspire the great people you hire to flourish
- Create a workplace culture that truly differentiates you as a company
- Develop company-wide communication
- Stop doing everything and start leading
Many founders struggle with the transition and figuring out what they need to do as a scale up CEO. And in some cases, investors lose patience and throw them out.
Some get through the transition, but it’s an unnecessarily messy process.
Some find out the scale up is not for them and prefer the hustle and bustle of the startup.
Take the Quiz — Are You Cut Out To Be A Scale Up CEO?
Decide whether you can and/or want to transition from startup founder to scale up CEO by taking my short quiz below based on the key success factors a scale CEO will need to focus on. (NB, I have also created a more in-depth quiz with bespoke guidance and tips — click on this link to find it).
To take this short quiz, answer the questions as honestly as possible. Strongly agree — 3 points, Agree — 2 points, Disagree — 1 point or Strongly Disagree — 0 points.
- I have more drive and ambition than most people I know.
- My vision is big, it’s a waste of time thinking small.
- My energy levels are rising as the company grows and my role evolves.
- I have team members on my team who have better knowledge or expertise than me.
- I know how to find and hire top talent.
- One of my main roles is ensuring my senior team fulfills its potential.
- I realize that the success of the business will be down to my senior team — business is a team sport.
- I have intentionally designed the working environment and culture and have not left it to chance.
- I have created a board of formal and informal advisors to learn from and to give me feedback.
- My company already has procedures, planning, forecasting, processes and systems in place to be ten times the size we are today.
- I trust my gut, but I have learned to slow down on some of the more important decisions and to ensure I get hold of data to help guide me.
- When it comes to my leadership, I know what has got me here will not get me or my company there.
- I am managing to delegate and confidently let go of tasks as my team grows.
- I have stepped up the amount and the quality of communication I do internally and externally.
- I have developed my storytelling skills to such an extent it is now one of key strengths.
- I am developing my strategic thinking and consciously make time for it.
- I am commercially-minded, focused on the numbers, and on creating a financially sustainable business.
What’s your score? If it’s over 38, then you are well set.
Anything below doesn’t necessarily mean you will not be a successful scale up CEO. But it does raise some questions which you want to face up to.
There is no one playbook to follow. You need to decide what type of leader you want to be and create a CEO job description that matches your strengths.
But there will inevitably be areas, e.g., skills, behaviors, attitudes, and mindsets you need to get better at or change, that perhaps don’t play to your natural strengths. And there will be areas you may not have thought of, i.e., blind spots.
12 Key Success Factors Of A Scale Up CEO
Below you’ll find 12 key success factors behind the short quiz you just completed.
These skills, behaviors, attitudes, or mindsets have been identified from seeing the startup and scale up from all angles — as a founder, coach, mentor, director, venture capitalist, angel investor and from working with multiple founders over the last 25 years. I have experienced some wonderful successes but some heart-breaking failures too. And remember, we can learn from both our failures and successes!
1. Ambition Reset
Ambition is one of the main factors that get you through those existential crises facing every scale up and any day-to-day requirement to keep pushing things forwards.
The scale up Founder CEOs continue to increase their ambition as they progress from one level of success to the next. They continue to double down on their commitment to learning and increase their own and their company’s capabilities.
2. Energy, Motivation & Strengths
Motivations are our inner drivers, the ‘fire within’, that determine how we feel and act. Strengths are things you are good at and that give you energy.
Each of us has a unique fingerprint of what energizes us. Unless you are energized by being the CEO of a scale up, you are unlikely to succeed. Why? Because it is going to get harder, and you are going to need all the energy you can get.
So having self-awareness and clarity about what energizes you and how to manage your energy will materially increase your probability of success.
3. Your Leadership Development
Leading a startup is hard. Leading a scale up is even harder. You need to scale up your leadership skills ahead of your company’s growth.
You have to keep humble and keep learning every day. You need to make yourself a learning machine.
A commitment to developing yourself is not a selfish act. It’s a commitment to your team members and your business.
4. Finding The Time To Lead
You get used to wearing many hats as you fight to get initial traction for your startup. As a result, you get used to being involved in every aspect of your startup.
To scale up successfully, you need to bring in new leadership talent to fill the gaps in the early team’s capabilities. You need to remove yourself, let go of roles you previously had and delegate real responsibility so that you can focus on working on your top priorities.
5. Consistently Sell The Vision
A compelling shared vision is essential to build a scalable and sustainable business that delivers more than shareholder returns.
Even when Amazon was a loss-making online book retailer, Jeff Bezos consistently talked about his dream of Amazon becoming the Earth’s Most Customer-Centric Company. This bold vision allowed him to make some big, long-term decisions. While some failed, some would ultimately help the business become one of the most successful globally.
The 10,000 feet view keeps the wheels turning even when the going gets tough. You have a clear vision of what needs to be accomplished, and you don’t get bogged down in the finer details.
6. Strategic Thinker
Founders like to keep their options open, but you need to make some hard choices to succeed. And that is what strategy is fundamentally about — making hard choices about what to do and what not to do. Making choices does not guarantee success but forces you to focus on what matters. A company can’t do all things or be all things to all people.
As you move into the scale up stage, you have product market fit, and you are focusing on growth. You will probably have made a strategic pivot or two to get to where you are today.
But just because you have reached the growth stage doesn’t mean you don’t need to consistently evaluate and update your strategy to increase the probability of success.
7. Commercially-Minded
Passion and excitement about the growth is one thing but being aware of how much money you have in the bank, how long it is likely to last, what your outgoings are and monitoring your business using data and metrics is what makes a proper scale up CEO.
Financial discipline is often ignored as rapid growth can be at odds with profitability and cash creation. You might get away with it for a while, but it will catch up with you. You can’t say you haven’t been warned!
8. Sourcing And Hiring Talent
In a scale up, I often hear the excitement around how many people they are hiring. Sadly this is followed, a few months later, by the seemingly inevitable stories about the new hires failing to hit the grade and/or original team members leaving because they don’t like the new culture.
Bums on seats do not solve your problems and often exacerbate them. I’m with Jeff Bezos when he says, “I’d rather interview 50 people and not hire anyone than hire the wrong person.”
Hiring is often one of the biggest weaknesses in an entrepreneur’s toolbox, mainly because most have no experience or training. Many of us have misplaced confidence.
As you scale, introducing and effectively executing proper hiring processes is necessary to maintain and increase your hiring success rate.
9. Talent Development
Arguably a scale up CEO’s key role is to develop their people, a skill many founders do not have much experience with. And that is probably why few startups or scale ups focus much time on training or coaching. Many operate on the extremes — either micromanaging their team members to the nth degree or letting them get on with it with no management at all.
Professional or career development may sound like something that only big companies do, but it’s not. Millennials and Gen Z employees, in particular, want career advancement. It comes up in company surveys my clients do time and time again.
The fight for talent is intense; promoting learning and growth within your company will attract the talent in the first place, help them get better while they are with you, increase engagement and reduce attrition rates. Don’t leave people’s development for the future, do it now!
10. High Performing Teams
“Great things in business are never done by one person. They are done by a team of people.” — Steve Jobs
Teamwork is almost always lacking in companies that fail and is present within companies that succeed.
The challenges of the world have continued to grow exponentially in terms of complexity, interconnection and speed of change, which means it is unrealistic for any one individual to have all of the necessary skills and strengths to lead the company to sustainable success.
Too often, you come across teams with an average IQ of 110–120 where the team functions at a collective intelligence of about 60 i.e., performing at less than the sum of their parts.
Scale up CEOs need to learn how to build a high-performing leadership team and highly effective teams across the company.
11. Design Your Culture
As the company scales, it gets harder to maintain and build a strong culture. A strong culture can quickly turn into something toxic if founders don’t take steps to design the culture deliberately, i.e., codify and reinforce it continually.
Culture is a complex thing that cannot be fully controlled; it is co-created by everyone in the business. But consciously understanding what it means and guiding the culture is a key part of the leader’s job.
A culture will be growing and developing with or without you, and it will be hard to reverse it once it has grown some roots. The most successful companies create a culture by design rather than by default.
12. Systems & Metrics
From the outside, the growth looks impressive, but on the inside, it’s chaotic. Those hacked-together processes are creaking at the seams.
You pride yourself on being agile and fast-moving. Planning, processes and structure seem an anathema to you. Tension builds up between the need to move fast versus the need to build structure, plans and systems.
Standardizing and streamlining processes means you do not have to reinvent the wheel constantly. It creates effective decision-making and efficient workflow in every functional area.
How do you know these processes are working? You need to measure them. Metrics give you and your colleague’s direction. People like direction.
The right metrics give you goalposts, and the right processes give you the infrastructure to achieve them.
The Scale Up Is Very Different To The Startup — It’s Not For Everyone!
If you are contemplating whether you want to transition from startup founder to scale CEO…
Firstly, you should give yourself a big pat on the back for being in this position in the first place. It is a sign of success. Successful companies go through a life cycle, from startup to scale up to maturity. At each stage, the focus of the company changes, as do the skills, and attributes of the CEOs.
Not many founders go from £1 to £1 billion. You may not want to go the distance or feel burnt out. You may have real energy for the scale up, but others don’t think you are the right person for the next growth phase.
Unfortunately, this success means you need to make tough decisions, get further out of your comfort zone, learn quickly, and navigate tricky transitions.
So my plea to you is that before you make any big decisions or let others decide for you, do some deep, honest reflection and ask yourself these questions.
- When I visualize 5 years ahead, and I am the CEO of a company with 1,000 people, how does that make me feel?
- Do I feel energized when I reflect on my new scale up CEO job description?
But also invite a friend, coach or mentor to question your thoughts, reflections and choices. You may believe your reasoning wholeheartedly that you do or do not have what it takes, but your thinking may be flawed!
Good luck.
— — — — — — — —
As a next step I recommend completing the more in-depth questionnaire I have created called Are you cut out to be a Scale up CEO?. Answer the questions and we’ll send you a personalised report with feedback on the 17 success factors — mindsets, skills, behaviours or attitudes — behind scale up success. This will include a summary on where you are strong or have energy for and where the gaps are. You will also get 40 practical Top Tips on how to transition into a successful scale up CEO.
Connect with me on LinkedIn
p.s. If you enjoyed it please share it, spread a little love. Mark’s Scale Up Essays are created by Mark Farrer-Brown, scale up Coach, Investor and Entrepreneur. You can find out more about Mark’s writing and how he empowers Scale Up Founder CEOs and their teams to sustainable success at Fit to Lead website.
