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Hire too soon and you are misallocating valuable resources. Hire too late and you miss growth opportunities. Here is some guidance on when to hire a CEO.
1) More often than not, the Founder gets in the way of growth. The skill set to start a company is not the same skill set to provide the growth trajectory to bring it to the next level. The Founder remains a funnel through which the most trivial decisions must pass.
The lack of shared responsibility is a disincentive to ambitious staff. Hiring an outside experienced CEO that will attract/retain an inspired management team is the path to long term success.
2) There is a threshold when personal finances and loans from friends and family are just not enough. If you want to attract serious commercial interest to your enterprise – you better have experienced leadership at the helm.
3) Developing a product/service in-house is only the first step to a successful enterprise. In fact, the most vital step is bringing that product/service to market. The company goes from being inwardly focused to outwardly focused and the new challenges of creating a sales team, managing distribution, external marketing and customer support become the priorities.
This key transition point is when you require an experienced CEO. The candidate does not necessarily require industry specific expertise, but rather have deep knowledge in business operations and processes.
4) While having a vision is a key characteristic of a Founder, it is the implementation of that vision that differentiates a good idea from a successful business. Blue sky thinkers are where great ideas originate, but it is seasoned CEO’s who have worked in the trenches that get things done.
5) Attracting and mentoring a success driven management team is a key role of a CEO. A Founders loyalty to original team members can put the brakes on potential. Evaluating performance and making tough personnel decisions opens the door to growth. It takes an A+ leader to attract A+ talent.