When Should You Replace Yourself As CEO?
Years ago, I was introduced to “William”, the CEO of newly formed startup. I think our first meeting was a lunch meeting, and William was trying to convince me to join him.
I liked William on a personal level. However, I didn’t see him as a CEO, so I passed on the opportunity. That didn’t stop William from continuing to recruit me.
We’d meet for lunch, and William would tell me about his challenges raising money. There are a few investors that wanted to give William money, but these same investors wanted to replace him as CEO.
But there was this one investor that was willing to keep William as CEO. You can guess whose money William ended up taking.
You don’t want to delude yourself if you’re not capable of being CEO.
William wanted to be CEO so badly that he couldn’t see straight. I certainly couldn’t blame him. After all, this was his baby, his company.
William didn’t have the skills necessary to be a CEO. In my view, he just wasn’t strong enough. I didn’t think he was going to be able to recruit a strong enough team around him.
The one investor that gave William the chance to be CEO never really gave him the chance in reality. I happened to have inside information on William’s situation because I knew the investors.
One of the investors told me, “We’ll take care of it,” regarding William being CEO. In other words, they were planning on moving William to a different position and hiring a new CEO.
Sure enough, William was replaced with a “professional” CEO after the company closed its next round of funding. The new CEO couldn’t get the company moving in the right direction, and the company went into a death spiral.
It’s okay if you have doubts about your ability to be CEO.
I’m working with a CEO named “Oliver.” I think Oliver is great. He is smart, he has a clear vision for the company, and he can absolutely scale.
The company has done great under Oliver’s leadership. Yet Oliver is filled with self-doubt about his ability to grow the company as it continues to scale.
I actually don’t mind Oliver sharing his self-doubt with me because we all, at some level, have self-doubt. Honestly admitting you have self-doubt is important because you can address the areas where you have self-doubt.
William, in contrast to Oliver, had no self-doubt. I wish William did have some self-doubt because it might have helped him grow into the role of being CEO.
You are the CEO, so act like the CEO.
The lesson of having self-doubt is that you have to dance with your self-doubt. In other words, you have to keep growing and being CEO despite your concerns.
Here’s where you can get yourself in trouble. There’s another CEO I am working with named “Ray”. Ray has a really bad habit of creating a power vacuum. Let me give you an example.
Ray is thinking about whether he should keep his company in stealth mode, so he wants to have a discussion about this at the next board meeting. I asked Ray what he wants to do?
“I want to keep the company in stealth mode,” he said.
“Then just do it,” I suggested. “This isn’t a board level decision. You’re inviting your board to get involved in matters that they don’t need to be involved in.”
It’s unclear what’s going to happen with Ray. Will he gain confidence and overcome his self-doubt, so he can grow into to being the CEO long term? I don’t know.
I do know that if he keeps ceding power to his investors he’s inviting his investors to replace him. That will reduce the chances of Ray’s company succeeding because it’s in everybody’s best interest for Ray to begin acting like a CEO.
For more, read: What Is The Hardest Part Of Starting Your Company?