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Founder to Public CEO

Andy Grove and I agree on inflection points.  I see them in a  fundamentally different way.  He sees them as reactionary and I see them as premeditated

“They represent, in my description of it, what happens to a business when a major change takes place in its competitive environment. A major change due to introduction of new technologies. A major change due to the introduction of a different regulatory environment. The major change can be simply a change in the customers’ values, a change in what customers prefer. Almost always it hits the corporation in such a way that those of us in senior management are among the last ones to notice.” – Andy Grove – Intel Keynote (paraphrasing his own book)

I see inflection points in a broader context.  From a leadership perspective we know inflection points will happen.  We know that markets will mature.  We know that C.O.G.s will change and that price pressures will effect gross margins at some point in a company/product life time.  There are numerous studies on this.  Today, I am going to focus on the leadership role in expressing where  inflection points are planned for vs. reacted too.

A founder typically has the passion of innovation.  A raw desire to bring a vision to market.  Professional CEO’s presents a polished and stable vision of markets and how the company will continue to address challenges while growing predictably   How do we as founders and CEO’s make these transition?  Few founder CEO’s make the cut to public CEO.  There are painfully few success stories of founding CEO’s who go on to run large public companies.  There is a vast number of leaders who opt at various stages along the way.  Let’s have a look at the my chart on inflection points as aligned to business typical growth:

Large screen shot

Inflection points are aligned with various stages of a startup.  Each level roughly aligns to a stage in company growth.  The expectations are driven by investors.  Andy Grove describes outside forces while I am mapping internal forces / customers.  These inflections points can be predicted and planed for allowing the Founder to map learning and success.  I am not suggesting everyone should aspire to be a Professional CEO, but everyone should know when to pass the baton.  Framing your learning  so that you aligned with some predicable events listed in this model.  Fundraising is often a seminal and powerful moment for an Entrepreneur.  It is as exciting as it is scary.  As shown above, seed rounds are often aligned with an “all in” approach form Angel Investors.  Everyone understands it’s an experimental time where the company and management or finding market value for innovation.  What happens next is very predictable.  You have to let go to move on.  Did you plan well enough?  Were you aware that with a B round you are expected to lead the company and investors more?

Death is not an exit strategy.  Plan well and train along the way.  Prepare and model yourself on what the next stage leader looks like.  Focus on the expectations of that role and how to let go of the previous role.  In future posts I will break down each of these sections and how they play on one another.  This should give the practitioner of corporate yoga the skills to remain flexible and let go when the time comes.  Or, be ready to bridge the inflections point on the path to another stage of growth.   Plan for inflection points and you will know when to let go.

 

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