LEADERSHIP IN ENTREPRENEURSHIP
The roles and responsibilities of a startup CEO and its founding team
A framework for a startup CEO’s roles and responsibilities
After four years of running my startups and advising various new ventures, I have learned the hard way — mainly from mistakes and failures — that there is a direct link between the founders’ leadership skills and the success of their startups. A capable and strong startup CEO and its founding will need two different skill sets to deliver success:
- Being a great manager — fostering a loop of various managerial tasks
- Being a great leader — fostering a loop of soft skills
Being a great manager — a loop of tasks
As managers, a startup CEO and founding team need to perform five sets of circular and repetitive activities:
- Developing the strategy — and setting the startup ‘direction’. This is the first thing a startup CEO and the founding team need to do
- Building the team — that can execute the strategy and build the solution the team is aiming to offer to the market
- Setting goals — that will make sure the team is running in the direction set by the strategy. These goals need to be measurable.
- Assisting teams, ‘if’ needed — so that the organization continues to solve problems and push forward with the operations
- Monitoring progress — periodically reassessing the state of the strategy and team, making sure that they still make sense, and having the perseverance to adjust accordingly.
While in established and mature companies, these cycles can be monitored and checked quarterly, in a startup, this needs to happen on a weekly or bi-weekly basis because a startup is functioning under a great number of hypotheses and unknowns and therefore needs to be continuously be learning and making small or large pivots.
Being a great leader — a loop of soft skills
While managerial activities are more mechanical, leadership is more soft skills and harder to acquire and execute. A CEO and founding team’s leadership tasks can be summarized under three main buckets:
- People — when talking about people, we are referring to three sets of activities: 1) — Hiring; the startup CEO needs to bring in needed human resources as quickly as possible. This speed may sacrifice the degree individuals match the company culture, however, this downside can be accounted for in the longer term. 2) — Caring; is potentially the most critical part of leadership. When an organization cares for its employees, they care about their job, colleagues, and company. 3) — Listening; to listen to people, you need to meet them often, over lunch breaks or in meetings, and allow people to speak and share their opinions.
- Vision — is the reason for the existence of the company or the ‘why’, repeating it, and verifying that stakeholders know it — customers, employees, investors. The CEO and founding team need to note that the most important stakeholders in a startup are the employees because working in a start-up entails many hours, people are not getting paid as much as they would in other places, it’s an emotional roller coaster, and therefore the only reason employees stay committed is that they have a ‘why’ that they believe in. Imagine a company that does not have a ‘why’, then it would be an emotionally tiring daily experience for all of its employees, and cracks of failure begin there.
- Culture — is about 1) — Collaboration; creating an organization where people work together in a fashion that they come together to solve problems. Collaborative organizations solve problems effectively and quickly. It is important that whenever leaders see employees behaving against the value of collaboration, they need to act hard on it because employees will only believe that that is a core value if they see that whenever there’s no collaboration it will have negative consequences. 2) — Transparency; for a leader to create the right culture and enforce the right management processes, they need to know what’s happening, and they need employees who can share the truth about what is not working, without any fear. 3) — Self-awareness; lack of self-awareness is the parent of poor decision-making. A self-aware startup has an environment where it challenges all employees to become the best version of themselves. 4) — Optimism; running a startup is difficult. There tends to be a technical problem every other day, a major competitor such as Google launches a new feature similar to yours, and fundraising efforts fall apart. For a startup to last, the CEO and its founding members need to be optimistic at all times and believe that they will succeed even during difficult times, otherwise, it will be difficult to come to work on most days.
Leadership is tough to execute because a CEO can not achieve it by just speaking it — it needs to be behaved and presented in action. Leadership depends on the example that a CEO or the founding team set themselves as to the values they want their company to be run by and if they’re not going to behave based on those values, it will most likely fail.
Becoming a successful startup CEO and a founding team is a difficult task. It requires patience, constant learning from mistakes, and adaptation to new circumstances.
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