🪜The 3 Stages Of A CEO
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Enjoy the 145th Podup, with special thanks to ChatGPT Consulting - a structured 4-week program to transform your team’s productivity and creativity.
Today, we’ll dive into the best insights and ideas from Founder’s Journal.
As a startup CEO, growth is the only constant. Ali Rowghani, Managing Director at Y Combinator, is perfectly positioned to guide us through this journey.
He lays out a CEO's evolution from the trenches of product development to the strategic heights of company leadership and innovation investment.
From startup to scale up
Phase 1
Your first job is to build a product users love, so much so that they’re willing to abandon existing alternatives.
A Phase 1 CEO is the Doer-In-Chief. Delegation should not be a word in your vocabulary.
You must be deeply involved in designing product specs, interacting with users, and acquiring customers.
Phase 2
Your second job is to build a company to maximize the opportunity that the product has surfaced.
Once your startup reaches 20-30 people, you have to spend more time leading, and to do this you have to do less.
You can eventually delegate everything you did in Phase 1 by hiring people better than you into leadership positions.
Phase 3
Your third job is to harvest the profits of the core business to invest in transformative new product ideas.
This usually happens when you reach 400-500 employees.
By now, your direct reports should be experienced leaders who can perform at a high level with minimal involvement from you, provided that you set the direction well.
Alex Lieberman paraphrasing Ali Rowghani
3 things CEOs can’t delegate
(1) Hiring a leadership team
Meet lots of people so you can make a good judgement on the skills, experiences, and personality traits that you need.
Because executive hiring takes so much time, you should stagger these hires rather than trying to hire them all at once.
(2) Creating purpose and alignment
As a Phase 1 CEO, you are the lead rower on the boat. As a Phase 2 CEO, your job is to define the purpose of the voyage, set the direction of the boat, and measure the pace of a large number of rowers.
In business speak, this is defining the mission, the strategy, and the metrics.
(3) Nurturing company culture
Culture is defined by the way people treat one another in a company. Unlike the other tasks, creating the culture isn’t uniquely the CEO’s job. It’s everyone’s responsibility.
Rather than assuming the burden of sole authorship, you should work with early employees to codify a set of values and behavioral norms that feel authentic and aspirational to everyone.
Alex Lieberman paraphrasing Ali Rowghani
Why it matters
In the early days, a CEO’s hands-on involvement with product development and customer acquisition is non-negotiable.
As the company matures, the skills to delegate, lead, and inspire take precedence. However, not all CEOs are suited to or enjoy each stage of this evolution.
In some cases, the best decision for the company's future is for the CEO to pass the baton to someone whose strengths align with the company's current needs.
It’s okay to step down when the company needs someone with a fresh bag of tricks. Letting go of the reins is not a sign of failure.
Next steps
Self-assess. Evaluate which phase your startup currently resides in and adjust your role accordingly.
Proactively grow. Start developing the skills necessary for the next phase before your startup transitions into it.
Hire great leaders. Invest a disproportionate amount of time in hiring a leadership team that complements your evolving role.
Your thoughts?
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