Startup founders– Avoid “CEO Syndrome” at all costs
Throughout my time working with startups and entrepreneurs, I’ve had the pleasure of getting to observe the rapid growth of some very successful ventures, and the decline of others. I’ve seen companies scale into 10x growth year over year, and have been lucky enough to work alongside them throughout their journey. As a result, I’ve been able to observe some of the key characteristics of companies that succeed after their first few milestones, and subsequently turn those small victories into sustainable growth and success. The key component of founders who are able to keep momentum going and compound small successes into regular wins is the ability of the founder to avoid what I call “CEO Syndrome.”
A definition for “CEO Syndrome” won’t be found in a dictionary, but I believe the definition is best demonstrated by a set of behaviors a founder takes on after achieving what others might view as success. For example, if a startup secures a large contract with a prestigious client or secures a sizable seed round at a favorable valuation, this could catapult their startup into profitability for the foreseeable future, or be deemed as a “success” to the independent observer. Where the distinction of whether or not the founder will succumb to “CEO Syndrome” lies is in their behavior immediately after that accomplishment.
There are, in general, two diverging paths I’ve seen founders take. The first, is continuation of business as usual, albeit with slight modifications needed to adequately respond to the windfall event. This may include hiring support staff, ramping up technological capabilities, or investing in improving operation efficiencies. The second path, which I’ll define as the “CEO Syndrome” path, is one in which the founder lets the success “get to their head”, and responds accordingly. These founders pay themselves an exuberant salary or bonus, hire an assistant, relinquish day to day tasks, and attempt to delegate and remove themselves of all responsibility. Now, it’s important to note that to achieve scale, a certain level of delegation of responsibilities is necessary and critical, but the distinction lies in the level of delegation. If the founder eliminates all “nitty gritty” work and delegates to his or her staff, they risk losing touch with the core operations of their business. Removing yourself from the day to day details of your business in search of a more attractive “corner office” role is dangerous, especially when your business is at such a defining moment in its life cycle. One such set of tasks and responsibilities that a founder may unload onto a staff member is their least favorite activites, or most frustrating day to day tasks. However, this is ill advised, as these tasks are often most critical to the company’s long term, sustained success. For example, if a founder unloads all customer service to an entry level employee, they lose a key pulse on what consumer sentiment of their product/service is, or they are less motivated to fix core issues that are driving customer dissatisfaction if it is no longer their problem to deal with. This can be absolutely devastating, and I have seen this behavior stymie business growth and hinder the prospect of continued success.
While it is certainly understandable that a startup founder eventually wants to move into more of a strategist and high level role, the first taste of success is not the time for that shift to happen. Doing so can be disastrous for startups, and cause the growth curve to flat-line or business failure outright. As such, it is crucial for startup founders to avoid the temptation of hitting the golf course incessantly. Rather, they should continue focusing on the behaviors that allowed them to achieve their successes in the first place. The most successful CEO founders I’ve worked with are the first ones in the office, the last ones to leave, and treat their employees as equals, not subordinates. Don’t catch “CEO Syndrome”, and your startup will avoid the associated ailments.
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