From founder to CEO: How to ‘let go’ and scale your business

Most business founders will reach a point where they can either plateau, or they can take their business to the next level. That requires some big decisions, as well as a period of self-reflection, to understand how your own role will evolve as the business grows. So, how can you ease the process of letting go?

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Business founders are experts at juggling a variety of tasks. In the early days, most entrepreneurs don’t have the funds, or the growth mindset, to hire much support, particularly not specialist expertise and experience. So, you become part accountant, part salesperson, and part operations, working out the systems and processes as you go along. That was how I built Rowan for the first three years.?

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But as your business grows, managing everything yourself becomes progressively harder, and the pressure on your shoulders can make you feel like you don’t want to scale anymore. When this happens, you need to decide whether to stay as you are, and keep controlling what you can control, or whether to make changes to move the business to the next level.

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If you choose the latter option, that means bringing in a team to support you. But, while that might sound relatively simple, giving up control of all your tasks and responsibilities is often harder than it sounds. In his book, Traction, Gino Wickman talks about “letting go of the vine” to describe the tension that business owners feel between holding on to the business, while also wanting to step back.

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Overcoming this conundrum is critical if you want your business to scale successfully and relieve the weight on your shoulders. When I went through this process with Rowan, a few key things helped me to gradually hand over my responsibilities and take on a more strategic CEO role. ?

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External investment

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Finding the right investor is liberating because it means that you can accelerate your growth journey, while de-risking the business, so it doesn’t feel like every decision puts your personal position and wealth at risk. You can take braver, cleaner decisions, without worrying you might lose your house. You have the freedom to do what is best for the growth of the business.

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Equally importantly, bringing in an external partner gives you direction, forcing you to put a strategic plan together and then stick to it, regularly reporting on progress. Investors can also contribute significant value aside from just cash. For example, when LCap Group invested in Rowan in 2021, it gave us access to innovative technology to enhance our service, as well as a broader range of functional expertise to draw on. That puts us at an advantage as we look to scale.

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Hand over one functional task at a time

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Entrepreneurs often have a certain mindset which means that they think that they can do everything better than everyone else. However, when it comes to “letting go of the vine,” you must accept that there are people who can do some aspects of your job better than you. For example, my biggest strength is sales, but I recognise that there are better financial and operations people than me. So, it made sense to give up finance first, as it is an area that I don’t particularly enjoy and after that, I handed over operations.

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Often entrepreneurs don’t see the importance of these areas, but they are the building blocks, without which you can’t hit your revenue goals. Bringing in functional heads means I now have a support structure in place, while maintaining the functional balance of the leadership team. They enable me to run the sales function better and free me up to take on the CEO role, setting a clear vision and strategy and bringing the whole team along with me.?

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Finding the right people for the right seats

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Entrepreneurs tend to gravitate towards other entrepreneurs, and some make the mistake of hiring in their own image, by searching for another all-rounder. But when you’re looking to scale, the key is to find leaders who are specialists in individual aspects of your role, and who are also helicopter people, who can do the detail of the people, process, and systems, while also discussing the five-year plan.

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Finding leaders that you can trust is also critical to letting go. In Traction, Wickman talks about asking three questions of potential hires: “Do you get it? Do you want it? Do you have the capacity to do it?” It essentially comes down to having the right culture and values, having the motivation, and having the “mental, physical and emotional capacity” to do the job. If the answer is ‘yes’ to each of these questions, then you’re on to a good thing.

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Since partnering with LCap Group, we also now use PACE, to understand behavioural complementarity; the interplay between different characters in the team and the cognitive diversity, to ensure that the whole is greater than the sum of the parts. For example, if we have a business development manager who likes to focus on the ‘big picture’, then we will team them up with a more detail orientated research specialist, so that each complements the other’s strengths.

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Find a situational match

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A final element that helped me to get comfortable with letting go was to look for leaders who have been through the exact stage of growth that my business was in. For example, if you are looking to grow the business from revenues of ￡5m to ￡15m, can you find functional leaders who have been through that exact situational challenge before?

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I would even argue that this situational experience is more important than having experience in your exact business sector (in our case executive search), as it means that a person has a real-life understanding of the changes that a business needs to go through to achieve and sustain a certain level of growth. For me, having that experience in my team meant less pressure to have all the answers, while also giving me confidence to let them run with it. ??

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You can’t be functionally dysfunctional forever

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Early-stage businesses are often what we call ‘functionally dysfunctional.’ They function, but to an external observer it isn’t always clear how, and they are heavily reliant on individual personalities - particularly the skills and hard work of one or more founders - to stay on track. But functionally dysfunctional businesses have a limited shelf-life. ?

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For your business to achieve its full potential, and attract external investment, you need to shift your mindset from founder to CEO, putting the team and structure in place around you. Investors want to see a business that is ready to scale. Plus showing you have the right people in the right seats will enable you to attract a higher multiple from potential backers.

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Rowan specialises in working with founders who are ‘aspiring for more’ but need support in building the leadership team to take the next step. As we have been through this process ourselves, we understand the challenges of letting go - and we know that you won’t regret it.