The Curse of the Irreplaceable Founder—And How to Escape It
When you’ve built a company from nothing to profitable, from good to great, it can be difficult to admit that you’re the one preventing the next leap to a BIG exit.
After all, in many ways, you’re doing everything right. The company is growing. You’ve hired A-players across the board. Your customers love your brand. Buyers are circling. And every single day your company moves a little closer to your ultimate vision of success.
But you and your stakeholders know all that forward momentum will grind to a halt the second you step away.
Some CEOs take pride in being that kind of irreplaceable founder. But if your goal is a nine-figure exit, you have to start seeing your outsize role in your company as a problem.
That doesn’t mean diminishing what you’ve accomplished or your value as a leader. It means taking five essential steps that will transform the value of your leadership so that you can boost the value of your business.
1. Institutionalize Your Secret Sauce
Every successful founder has a “secret sauce.” What’s yours?
Can you see around corners that blind your competitors?
Are you a high-EQ leader whom top talent would follow anywhere?
Do you value learning and experimentation more than you fear failure?
Whatever it is that makes you an irreplaceable founder and leader needs to be transferred into the DNA of your company. Otherwise, when you do step away, you’ll be taking that secret sauce with you.
CEO Action Step: Document and systemize your secret sauce.
What’s instinctual for you should become standard operating procedure for your entire company.
Create playbooks and decision maps that your employees can fall back on when the path forward is unclear, and that managers can use to speed up onboarding new employees.
Conduct internal case studies of major pivot points — the successes as well as the failures — so that your whole company can absorb important lessons.
Make training and systems review a regular part of your company’s meeting rhythm.
By embedding your expertise into your company’s systems, the next CEO will be able to pick up the baton without tripping. That’s step one to the kind of succession planning that attracts BIG buyers.
2. Build a Brilliant Culture That Grows Leaders
Turn your culture into a talent multiplying machine.
Great businesses hire the best people, period.
Great business that scale to BIG, over and over again, use their culture to develop even more talent.
Potential buyers won’t worry about the departure of key employees — including the irreplaceable founder — because they’ll be able to see the next generation of leaders flourishing and growing at every level of the organization.
CEO Action Step: Make collaboration and education core cultural values.
Formal systems like peer mentoring and internship programs can create durable talent pipelines. Not only will you and your leaders be able to identify and nurture potential high performers, but those employees will be able to see a place for themselves in the company’s next-gen org chart. Make sure that your senior leaders know that keeping this pipeline flowing is one of their top responsibilities.
Your leaders should also look for collaborative opportunities between teams that don’t work together very often. Putting your creatives and your tech team together for a new product launch can give employees valuable insight into how the whole company works and how it might work better together.
It’s also important that leaders — including the CEO — check in with your best and brightest regularly and make sure they have all the tools they need to succeed. In addition to regular mentorship, provide access to additional training and shadowing opportunities. Encourage potential next-gen talent to attend conferences and join professional organizations. Consider adding tuition reimbursement to your benefits package if it’s not already there.
Make talented employees feel like they have a key role in your company and they’ll stick around, attract more top talent, and refresh your company’s energy and competencies.
3. Build a Strong Next Tier of Leadership
Your direct reports should be able to run the business without you.
Some irreplaceable founders micromanage out of habit. Some micromanage out of fear.
If you’re doing everything because you’ve always done everything, run through CEO Coaching International’s Stop-Doing List.
But if you don’t trust your c-suite and team leaders to execute on key tasks without your direct supervision, then you’re mismanaging two of your most valuable resources: your people and your CEO time.
CEO Action Step: Don’t delegate tasks, delegate ownership.
Your way isn’t the only way. And, if you’ve been doing things “your way” for years or decades, “your way” might not be the best way anymore. Even worse, you might be frustrating potential leaders when you should be empowering them to step up into BIGGER roles — including CEO.
Once you’ve established the KPIs and target dates that are essential to sustaining growth, give your leaders a chance to really lead. Support their attempts to find more efficient and creative paths from A to BIG. Celebrate wins. Learn from failures and move on quickly. Identify innovations that should be integrated into your SOP and other systems.
And if you want to stress test the hierarchy below you, get out of the way.
Way out of the way.
Schedule a Bill Gates-style “think week.”
Take a month-long vacation with your family.
Unplug from the business completely for your final stretch of training before a marathon.
If you’ve truly hired the best people and put them in positions to succeed, your business will keep humming right along. Don’t be threatened by that — be proud that you’ve done your job and created a truly sustainable, scalable company.
4. Embed Governance and Decision-Making Structures
Make decisions and accountability team responsibilities.
The best CEOs focus their time on just five things: Vision, Cash, People, Relationships, and Learning. A decision that materially impacts the company’s health in these five areas is a decision that you should be involved in.
On the other hand …
The best way to satisfy a disgruntled customer?
Should your new widget be blue or red?
What are the most impactful AI integrations available?
How to help two talented co-workers collaborate rather than battle for credit?
If your team leaders can’t handle these types of questions without running all the options by you first, then they’re just passing on their responsibilities to you. And you already have enough to do. Every second you spend managing below your pay grade is time you’re not paying attention to things only the CEO can control.
CEO Action Step: Put the group in charge.
Amazon’s “two-way door” principle can be a good guideline. Executives, managers, and team leaders should be able to handle smaller decisions that can be reversed (two-way doors). Their direct reports should also feel empowered to handle smaller issues without consulting their supervisors, which spreads out ownership and confidence throughout the organization.
Key decisions that can’t be reversed (one-way doors) should fall to an executive committee that meets regularly to review strategy and KPIs. Your company could also gain some perspective from a third-party advisory committee made up of outside experts and mentors.
Committees and team leaders should always feel comfortable if they need to bring the CEO into a discussion. But escalation to the CEO’s desk should be an exception, not the rule. The less dependent the company is on the CEO to make decisions, the more self-sufficient and efficient the entire organization will be.
5. Transition Key Relationships
Strengthen connections between key stakeholders and your company.
Irreplaceable founders are often still the point person when an important client or supply chain partner walks through the front door. Those stakeholders need to get comfortable seeing new faces and shaking new hands. Any key business relationship that might not survive the founder’s departure is a BIG liability that the company cannot afford.
CEO Action Step: Add new team members to the guest list.
Make a list of your company’s 10 most important relationships and the person in charge of managing that relationship. Assign a senior team member to be the co-manager. Introduce that co-manager at your next meeting. Bring along an up-and-comer to the one after that. Have your ace sales leader sit in on a strategy session. Swing by R&D and show off all the talented people working on your next BIG innovation.
If you’ve truly hired the best people and created a culture that rejuvenates your talent pool, that client or partner will start seeing that your company’s value far exceeds the CEO’s leadership. And if you have systems in place that will continue to attract the best people, deliver exceptional service, and create exciting breakthroughs, no matter who’s in charge, you’ll create durable institutional relationships that will boost the value of the company.
Prep Your Company to Keep Making BIG Happen
A founder CEO should always run their company like they’re getting ready to sell it, maximizing its value and optimizing processes that keep the flywheel spinning. But no one wants to buy a business that will start spinning its wheels under new leadership.
Making an irreplaceable founder replaceable is the only way a company can keep Making BIG Happen. Put one of these five action items on your to-do list and start preparing your company to do what you do best no matter who’s in charge and no matter what challenges lie ahead.
If you don’t have a coach and want one to help you prepare your business during this quickly evolving landscape, fill out the form below to take us up on a complimentary 1:1 coaching call.
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About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, the firm has coached more than 1,500+ CEOs and entrepreneurs across 100+ industries and 60 countries. Its coaches—former CEOs, presidents, and executives—have led businesses ranging from startups to over $10 billion, driving double-digit sales and profit growth, many culminating in eight, nine, or ten-figure exits.
Companies that have worked with CEO Coaching International for two years or more have achieved an average revenue CAGR of 25.9%, nearly 3X the U.S. average, and an average EBITDA CAGR of 39.2%, more than 4X the national benchmark.
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