My Company Is Changing. Do I Have to Change Too?

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The CEOs of rapidly growing companies inevitably reach a point where they must balance the entrepreneurial drive to expand with the need for processes and structure. These successful enterprises survived their start-up years. Now they must face many questions about how they will run their companies in a new period of greater stability.

The role of the CEO during the start-up and rapid growth phase of a business is generally different than the part played by a larger, more stable company. These executives must ask themselves, “Am I the right person to lead my company now that it has entered this new stage of development?”

The CEOs aren’t the only ones asking this question. Investors and the boards of many firms are probably making the same inquiry.

My role as CEO in my company has changed in many ways over the years. I anticipate that this role will continue to change as the company continues to grow and mature. While the changes I’ve experienced sometimes have been challenging, they were—and will continue to be—necessary for my company to remain successful. Moreover, my willingness to adjust my role ensures that I continue to be the right person to lead the company.

From the Trenches to the Tower
Since starting AnswerNet Network, we’ve grown from 20 employees to over 1,500. We expanded from one telephone answering service to a network of 53 outsourced contact centers, telephone answering bureaus and fulfillment sites.

In the first year, I participated in every aspect of the company’s day-to-day operations. I took the lead on fundraising, made most of the significant sales, created marketing materials, wrote press releases, oversaw operations, hired and developed each manager. I negotiated with significant vendors. I dealt with critical issues that the team faced. All of this was in addition to managing the corporate issues, such as acquisitions and finance.

We worked at a fast pace with long hours and no certainty that the effort would pay off. I also created and learned the business from the ground up. I helped develop the basic processes that would form an environment that promoted growth. I made thousands of decisions very quickly, but in making them, I listened to many people in the organization. People who had been in the industry for years patiently taught me the operational details. In turn, I helped teach them how our company would work and helped them understand our long-term vision.

Thanks in part to the general processes we put in place during the early years, we were ready to handle the hyper-growth we experienced. By the end of our third year, our company had 1,000 employees and almost 30 locations. We had teams of corporate operations managers (people who help oversee multiple sites) and corporate support leaders (administration, sales and technical services people). Management became more focused and departmentalized. People who were involved in a wide range of issues became concentrated on their core responsibilities. New team members hired for specific duties made decisions and gave me advice on matters that had been previously discussed with a variety of people in senior management.

During this time, I spent fewer hours in the operational trenches and much more time creating communication processes between the departments and operations. I was still making most of the significant decisions, but we were beginning to season our team; they began to make effective decisions without me. We created our “Management without Walls” structure, and our company philosophies that would guide us through this truly exciting time. No longer did I train every manager in the company. Instead I hired, led and trained our senior team. They, in turn, took the lead in developing the operational and support managers.

Over the last couple of years our growth has been more controlled, to about 10% annually from the 5,000+% growth that made us number 21 on the 2003 Inc. 500. My role has once again changed. Leading a larger organization requires me to spend more time reviewing others’ work, creating processes and systems to guide the company and monitoring results. I ask questions to understand not only what was done but why. I still spend significant time seeking out flaws in our decision-making processes so that we have the best chance to make good choices. I find that the more I understand how our team makes decisions, the easier it is to trust them to make the right decisions.

What I don’t do is make all the decisions myself. I am often briefed on activities that have occurred. I give my opinions about how we should handle certain aspects of the company in the future. I spend time delving into issues that I feel will have the most positive impact on the company or that marry my interests and skills. Then I delegate those issues that require time or skills that I either don’t have or don’t choose to devote time to.

This is where many entrepreneurial CEOs fail. As a company grows, the CEO must let go of some decision-making authority. Failure to delegate properly can cause a company to grind to a halt or to fail to seize opportunities. At some point, every organization expands to the point where one person can no longer effectively manage it. Boards, investors and entrepreneurial CEOs sometimes differ over when this point is reached.

As a company grows, more people need the CEO to communicate what is happening with the company. This can take a significant amount of a CEO’s time. Whether you are communicating with customers, your board, financiers, employees or the public, your role eventually becomes one of senior decision maker, communicator and strategic leader.

Yet for many entrepreneurial CEOs the transition from senior doer to senior strategic leader is difficult, if not impossible, to make. An entrepreneurial CEO likes to make decisions without having to justify them. Moreover, now the CEO must explain other people’s decisions that may have differed from his own—which can often be frustrating and disheartening.

Thus, we come back to the beginning. Are you the right person for the job? Do you need the rush of making all the decisions quickly or do you enjoy being a senior decision maker and communicator? Can you enjoy the successes created by others while being responsible to deliver the overall results? These are the tough decisions that face all CEOs in fast-growing companies. Can you make them? 

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