Growth Stage and CEO focus and delegation

Broadly, there are 4 stages to a company, it’s worth noting that a company could stall at any stage. Depending on the stage a CEO’s role changes and specialises. 

0 to 1 Stage – this is the inception stage, where the team is under 8 people, at this stage the CEO need to be a generalist, they need to worry about fundraising, business development, client servicing, product and operations. They are focused on building the plane and flying it at the same time. This stage is where CEOs who are more entrepreneurial will thrive, they can realise their visions rapidly and have relatively direct control over all aspects, but, the price of this stage is CEOs need to be active and actively involved in all aspects of the business, at this stage many of the decisions determine the direction if the business and can’t be delegated. 

1 to 10 Stage (Growth) – this stage is where the business has some revenue, the business will either position for investment and accelerated growth, or become revenue positive and grow as a more traditional business, the team has started to specialise into disciplines with experts and some formation off hierarchy and reporting lines, there’s a degree of clarity in how things are done. Entrepreneur CEOs at this stage often seem to get frustrated the business is moving too slow for their pace; they also find themselves starting to drown under the workload of running multiple growing teams with increasingly complex strategies, they can start to get frustrated with the more junior staff abilities or silo’d working behaviours. Whats actually happening is that the Entrepreneur is trying to run a larger organisation in the same ramen-hustle style, but the ‘machine’ is less responsive. Hiring, Cashflow, Business Development and Finance (including fundraising) become the main areas of concern. Product. CEOs can also get frustrated at this stage since they are no able to focus on the area they are passionate about and instead have to do more sales and finance related tasks. Generally at this stage, the CEO should be focused on Cashflow, Business Development and Finance (including fundraising), it would be reasonable that the CEO appoints a general manager/ COO-type who can focus on the day to day management of the company in tandem with the CEO (just to note, this was the role I played from 2014 for several years and multiple companies) – the goal of this general manager/ COO-type is to buffer from the more tactical and operational problems, so the CEO can focus on the complexities that legal and financial work can entail. 

10 to 100 Stage (Acceleration) – acceleration stage companies have a unique challenge, I consider these to be either post-merger, or post-investment companies, there’s a clear model for revenue and all eyes are on the business reaching various commercial targets, at this stage, CEOs really should be starting to specialise in their area of ‘super power’ and have a management team taking care of areas that they are less equipped to drive. I find that most entrepreneur founder CEOs find this stage challenging, ironically, their goal being to get to this stage and beyond. The reason for this is that the organisation starts to grow beyond the CEO, either the CEO doesn’t have the time to handle everything, or their style starts to create bottlenecks that start to work against the organisation, given how most entrepreneur founder CEOs start, the decision to give up control and leave decision making to others is key, but something most are consciously or unconsciously unwilling to give up. At this stage the CEO so look at their strengths and double down, sales CEOs should focus on selling, product CEOs should find a strong sales director and let them get on with it. The only area that the CEO can consider being involved in outside of their area of focus is in hiring for critical roles. Its also worth the CEO considering (assuming that they are a fit) being a figurehead and profile for the organisations PR.

100+ (Stabilisation) – I would consider these to be companies where there’s clear and stable recurring revenue, growth is something that is planned and there’s sufficient data to support decisions. I think most companies who have significant traction and are over 70 staff would fall comfortably in this category, at this stage the CEO should be focused on M&A, Strategy, larger strategic sales and leadership guidance. The CEO is at the strategy level and its reasonable that they have limited exposure to the day to day, with other officers, directors and managers handling the day to day. 

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