Although it comes along with a lot of prestige, the role of CEO has never been an easy one to fill. Likewise for that of a company founder, and entrepreneur. And where things become even more difficult is when an entrepreneur decides to transition in to that CEO role. Not all of the skills required to be a great entrepreneur are applicable for a great CEO. In many cases, the conflict comes down to the idea of management. Whereas entrepreneurs are often communicators, hustlers, and creative, they are not always comfortable with the degree of management necessary to be an effective CEO. But there is still hope. With a clear understanding of what a good CEO looks like, an entrepreneur will be able to take on the CEO role with confidence.

Hiring Well Builds Trust

Because a CEO is not as involved in the work, per se, she needs to be able to trust her employees. The only way to succeed here is to hire the right employees to begin with. Says Randy Komisar, partner with venture capital firm Kleiner Perkins Caufield & Byers, “Hiring the best people is the easiest way to build a high functioning, competitive organization. If you hire badly, you’ll spend most of your time as a manager dealing with personnel issues.”
It may seem simple, but the importance of hiring people you can trust cannot be overstated. At a smaller company, it may be easy to manage employee conflict or productivity issues, but every start-up aims to grow and on a bigger scale those types of problems are untenable. With the right employees in place, CEOs have time to help good employees become extraordinary, rather than spend precious hours helping mediocre employees become adequate.

Management over Execution

Ludo Van der Heyden, professor at INSEAD, notes that despite the title, the role of a Chief Executive Officer “is not wholly or even primarily about execution.” This can be a particularly difficult fact for start-up founders who choose the CEO role to accept. Many entrepreneurs are used to creating and constantly being involved in the daily shuffle of the company.
But for a CEO, management is more important that creating. This does not mean a CEO should constantly be planning corporate retreats or calling meetings, but he should be involved in monitoring employee conflict and making sure important operations (like payroll and HR) are running smoothly. This management is essential in creating an environment where employees are not just accomplishing tasks, but are thriving.

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Recognize Strengths

No one person is going to be immediately suited to the job of CEO. Just because an entrepreneur started the company does not mean that he is the best person to run it. Still, many founders do choose the role of CEO, so they need to be able to recognize where their strengths and management skills overlap with the needs of a good CEO and where they can seek improvement. According to corporate finance expert Howard Fletcher, “in the managerial area entrepreneurs desiring to be CEOs must accept the fact that a growing organization is a complex thing that must be managed. The bureaucracy is a fact of life.” Entrepreneurs-turned-CEOs needs to learn not only the importance of reports, planning, and procedures, they need to learn to delegate. This is rarely a strength in a company’s founder, but with practice and conscious effort, it is certainly a skill that can be learned.

Get Out of the Way

The overarching theme in how a CEO can manage is easy to distill: get out of the way. CEOs need to be present and engaged, but only to the point that they can solve the conflicts that are preventing employees from doing their work. This means personnel conflicts, operations problems, and anything that might make the creative, talented people that have built the company from the ground up less productive, less effective, or less happy. Komisar puts it succinctly, saying ” Managers serve the people doing the work. And nobody is more important in an organization than the people doing the work.”

About the author

Matt Faustman

Matt Faustman

Matt is the co-founder and CEO at UpCounsel. Matt believes in the power of online platforms to change antiquated ways of life and founded UpCounsel to make legal services efficiently accessible. He is responsible for our overall vision and growth of the UpCounsel platform. Before founding UpCounsel, Matt practiced as a startup and business attorney.

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