Climbing a Different Kind of Corporate Ladder
Les Trachtman, CEO, The Trachtman Group
The biggest challenge that a founder or early stage company CEO faces is oddly not survival of his company but how his role needs to change as his company grows and matures. Many leadership transitions (founders being fired) occur when the company’s needs grow faster or in different direction than the CEO’s capabilities. In fact studies have shown that the more quickly a company becomes successful, the more likely it is that its founder gets replaced. Fast scaling organizations require a chameleon like leader who can acquire new skills as his environment changes. Those that don’t are replaced. It takes a deep level of self-awareness for a CEO to realize this is occurring and a level of maturity not found in many to do something about it. Knowing when to continue to climb the leadership value ladder and when to gracefully dismount is the key to avoiding an uncomfortable, abrupt and often destructive CEO transition.
While every founder starts at the bottom of the leadership value ladder, fast growing organizations quickly pose new challenges for the CEO. The founder/CEO who is a doer occupies the bottom rung of the ladder. Getting things done in an early stage company is critical. Whether it’s coding the next software product, running a project or leading a sales effort, founder/CEOs are often intimately involved in the successful execution of early stage tasks. As organizations scale and multiple projects, products and sales occur simultaneously, no single individual can do them all. Running faster, working more hours, and multitasking can be a short-term solution, but it won’t hold up against the stress of fast growth for long. In order to succeed, a different approach is required.
That’s where the leadership value ladder comes in. Stepping up a rung from that of individual contributor requires rising above “doing.” Leading teams of doers is a better use of a fast growing company CEO’s time. It enables her to share her expertise over a greater expanse making a larger impact. Leverage as it is often called requires the ability to see the big picture and act through others. Stepping up a rung on the ladder gives you a better view of what is happening below. This next rung can be equated with coaching. Coaches often once were players but now are able to utilize the wisdom they acquired to help multiple-others execute simultaneously and in unison to get more done. Coaches are seldom also players, instead of doing (or playing), their focus in on coordinating the actions of others.
While coaching increases the span of their influence, it is far from the highest value role of a CEO. There is still further to climb. Just above coaching is strategist. While coaching helps your team members run their plays, the strategist creates the game plan. The selection of the plan is a critical role that requires the CEO stop working in the business and focus instead on working on the business.
It’s worthwhile to pause here in our climb to note why the leadership ladder analogy illustrates such an important principle: You can only be effective while occupying at most two adjacent rungs of the ladder. Just like on a ladder, trying to straddle too many rungs at the same time can stretch you too far and cause you to lose your balance and fall. To reach the strategy rung you must step off the player rung – which means among other things, no more direct interference with the work being done by your team. You can tell yourself that customers expect you to show up for them and hold their hand, just as you did when your company was small. But you can’t scale the company on that basis. If you believe that you are a critical player in every new sale or determining the features of your products, then your venture is destined to fail. You must accept that maintaining your exclusive close contact with top customers and the bits and bytes of your product are limiting and will wind up doing more harm than good—to yourself, to your people, to your organization and even to the customers who crave your attention.
Climbing further to the next rung is the architect. The architect defines the structure of the company or to continue our analogy – the rules of the game. Determining what is core and what can be outsourced or partnered. What we work on and what we don't. What we buy or what we build. It is within the framework that the architect draws that the strategy gets executed. And then on the next rung above architect is the rung of the investor.
The ultimate role of a CEO is accumulating and deploying assets in ways that are most beneficial for the company. The available assets create the constraints for the architect who then enables the strategist to create his game plan, and so on down the ladder. Each higher rung requires giving up some of the tasks below. Moving from doing to coaching to strategist, architect and investor are some heady changes that most CEOs have a difficult time keeping up with.
Those who can can add their names to the Mount Rushmore of business leaders together with the Gates, Shultzes, Schwabs, Jobs, Dells, Ellisons and other household names. The ones you don’t hear about are the vast majority - all the rest - who found their highest rung of capability and comfort and either purposefully dismounted or fell (or perhaps were pushed) from the heights.
The key to a founder/CEO optimizing her own personal value as well as that of her organization requires determining how to gracefully dismount the ladder at a level that is commensurate with her capabilities. Knowing her own limitations and deciding on her own goals can be the difference between a smooth transition and what could be a disastrous fall.
About the Author
Les Trachtman is currently the CEO of The Trachtman Group – focused on helping companies grow and scale, as well as managing director (and majority investor) of Purview, an early stage company focused on disrupting the medical imaging business. For the past two decades, Trachtman has worked directly with founders in half a dozen growing organizations while acting as a Sherpa for dozens of others. He has lectured at numerous universities across the country including the Harvard Business School, the MIT Sloan School of Business, University of Southern California, Rensselaer Polytechnic Institute, Kent State University, University of Maryland Smith School of Business, Union College, and Quinnipiac University School of Business. Trachtman also has published articles in theHarvard Business Review and Quinnipiac University Business. A portion of his career is chronicled in the Harvard Business School case study; Les is More Times Four, which educates entrepreneurs at leading business schools.
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