CEOs often avoid these decisions because they involve executives who have become dear friends. We recognize that this is a touchy subject, but it must be faced if the organization is to grow. One option is for some of the early team members to help launch a new product or division. They are usually more comfortable in a start-up situation or working on a smaller team. And several of the early leaders might be relieved to have the burden of an increasingly important and complex function taken off their shoulders. You wonât know until you have these crucial conversations.
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Itâs an issue I see at a lot of startups and project teams at larger companiesâthe founder or team lead often plays the role of the product manager in the beginning. They define the vision and work with all parts of the business to make it a reality. The trouble comes when the team growsâto 40, 50, 100 people. [See also: Chapter 5.2: Breakpoints.] Thatâs when the leader has to step away from the day-to-day business of building the product and hand over the reins to someone else.
But they canât imagine handing over their baby. How could anyone understand it or love it or help it grow as well as they could? And how would that function even work? Where would it live? How could the founder retain influence over the product if theyâre no longer the manager of that product? And then what would the founderâs job even be? [See also: Chapter 6.1: Becoming CEO.]
In this job, respect is always more important than being liked.
You canât please everyone. Trying can be ruinous.
CEOs have to make incredibly unpopular decisionsâlay people off, kill projects, rearrange teams. Often youâll have to take decisive action, hurt people to save the company, to cut out a cancer. You canât skip surgery because you donât want to upset Team Tumor.
Delaying hard decisions, hoping problems will resolve themselves, or keeping pleasant but incompetent people on the team might make you feel better. It may give you the illusion of niceness. But it chips away at the company, bit by bit, and erodes the teamâs respect for you.
In summary, growing a business is a dynamic process as the leadership team navigates the evolutions and revolutions of growth. And like the growth stages of a child, they are predictable and unavoidable. To deal with these challenges, the company must grow the capabilities of the leadership team throughout the organization; install scalable infrastructure to manage the increasing complexities that come with growth; and stay on top of the
market dynamics that affect the business.
To do this, there are 4 Decisions that leaders must address: People, Strategy,
Execution, and Cash.
Building strong relationships with your board members is another top priority of a new CEO. Yes, youâve gone through an intensive interview process with them, and theyâve just selected you. But in the words of one CEO: âYou won't know if you were selected by an inch or a mile.â Some directors may disagree with your vision and plans; some may even be dead set against you, but wonât share those sentiments with you.
Another factor at work here, though, is the status quo bias, a powerful and widespread psychological force in business. The concept was introduced by researchers William Samuelson and Richard Zeckhauser, who showed in studies with many kinds of decision-makers, including managers, that âwhen making an important choice, people are more likely to pick the option that maintains things as they are currently.â When youâre enjoying success, your status quo bias is reinforced, which might be just fine. But given that after five, six, or seven years, market conditions will surely have evolved, it usually won't be fine to stick with the status quo later. When responding to those changes would involve making a substantial alteration to or even reversal of a winning strategy or to operational engineering you have orchestrated, the status quo bias makes recognizing the need for change and making the case for it to your team and board a good deal more challenging.