A start-Up CEO struggles with change

A founder/CEO called the other day to discuss a dilemma. The individual has done a fine job building an impressive venture-backed company, based in a smaller community, which is really coming into its own. But as the firm grows, the CEO is finding it increasingly difficult to make certain trade-off decisions.

First, as is to be expected, growth places changing demands on management and some individuals adapt better than others. For the group of founding executives this issue is particularly difficult because it’s personal. These are the original musketeers, one for all and all for one. As the business becomes more complex, some of these individuals adapt and grow while others struggle. Some embrace the need for process, rigour and delegation while others cling to the magic of the early gunslinging garage days. If the CEO is lucky, those who struggle will recognize it and voluntarily withdraw in favor of executives better suited to the needs of the larger, more complex business. But in many instances, life does not bear such gifts and very difficult decisions will have to be made.

Second, as this company grows and gains international attention, it has attracted the interest of prominent US-based investors with valuable financial, intellectual and relationship capital to offer. When discussions turn to operations, some have made it clear that with their investment comes prescriptive playbooks and access to a network of proven executives that can be hired as needed. This compounds some of those difficult decisions. Given that the company and CEO in question are based in a small community, fishbowl effects are possible. Angel and other early round investors are local. They are also usually powerful and influential even neighbors in some instances. Founding team members are friends whose children go to school together. In a geographical fishbowl, there is no place to hide from decisions that affect stakeholders in an adverse way. There is also no shelter from their displeasure.

The CEO pondered whether this might be the time to bring on board a new CEO, someone with the appropriate experience and without the baggage of relationships that might be at risk. At the same time, part of him was angry that he had not anticipated these developments, and better managed expectations, feedback loops, learning needs and other transitions .

Both the inevitability of change and the immediacy of pain were palpable on that day.

About The Author

Robert Hebert, Ph.D., is the Managing Partner of Toronto-based StoneWood Group Inc, a leading executive search firm. He has spent the past 25 years assisting firms in the technology sector address their senior recruiting, assessment and leadership development requirements.

Dr. Hebert holds a Masters Degree in Industrial Relations as well as a Doctorate in Adult Education, both from the University of Toronto.

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