Growth – CEOs Only – The Personal Cost

Big Red Car here in a slightly rainy ATX. Rain makes the green grass grow and startup companies are focused on growing, also. They call it scaling, growth. But it just means getting bigger and stronger and more powerful. Growth, it’s not for sissies.

So, the Big Red Car is eavesdropping on a couple of The Boss’s conversations with some of his brilliant CEOs and the discussion wanders into the personal costs of growth.

CEOs will find themselves changing their relationships within the company as they grow. It is inevitable and you cannot change it. It is hard work. It can get messy.

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That co-founder? The one who could not scale with the company?

You have to deal with it. Here’s how.

Growth means organization

Growth mandates organization and organization is the first step toward complexity. That complexity shows up in the org chart. No surprise there, right?

The guy who was your best sales guy? He isn’t the right guy to be your sales manager or your VP of marketing or your CMO. Sorry.

He was and is a great sales guy but that’s different than overseeing other sales guys or slipping into marketing. Sales is just one element of marketing. Marketing is a bigger tent than just sales.

So what is a CEO to do about growth, Big Red Car?

The first thing is to recognize the problem. Understand this happens routinely. You have not been singled out for special treatment and, luckily, the solutions are also apparent. You have to know where to look.

Keep a clean organization chart and use it to model growth.

If you start with a couple of co-founders and two employees and you have the opportunity to grow, begin to model what your org chart is going to look like when you have fifty employees.

[Pro tip: Dollar weighted org charts (cost of each position and department identified in absolute dollars and as a percentage of gross revenue) with six month intervals looking out for three years is a great growth planning tool. Do it.]

Whoa, Big Red Car, fifty employees? That’s a huge change.

No, dear CEO, it isn’t. The Boss went from zero to five hundred employees a couple of times. Doesn’t happen overnight but it happens. It is a good thing. It is a pay window kind of thing.

Then what, Big Red Car?

Figure out what levels of management are going to emerge or be necessary as the company grows. You don’t have to think very hard to realize you’re going to have layers of operations, marketing, tech emerge from the swamp. The company will evolve in a predictable manner.

Begin to slot people and quickly realize a harsh truth — the person who was your third hire is good at their job but they have never grown a business with the rate and depth that your business is going to grow. They’ve never done this before.

Haha, neither have you but you’re the CEO so that’s too bad. You have to learn how to do it but you don’t have to do it in the dark.

Hire experience, CEOs

You will never be able to grow organically as it relates to management. Sorry, that’s a bit harsh and direct but you’re busy and you don’t have time for a Big Red Car to blow sunshine in your face, do you?

You are going to have to hire talent from outside the company.

Here’s the big takeaway — if your big challenge is growth, then hire folks who have worked for bigger companies (not the US government) and folks who have been there when that big company grew so quickly.

Do not think they have to be industry experienced because you are hiring them, many times, for their ability to handle growth. They can learn the industry. [Don’t carry this to an extreme. Just be a little broader in your thinking.]

[Pro tip: When hiring these experienced growth personages make damn sure they liked the experience. Don’t hire someone who hated the experience and wishes they’d never grown. You have to hire people who like growth. You’ll find this out quickly.]

What is the downside, Big Red Car?

The downside, dear CEO, is that the guy who was the third hire, who you spent a lot of time around the campfire with drinking adult beverages, he will not make the same journey you will. He’s not going to be there side-by-side. Reality sucks.

He is going to get someone hired over his head and two problems will emerge.

The first is that he will be pissed off because he got, essentially, pushed down in the org chart.

The second is that the new hire is going to be nervous as to your relationship with what is now his direct report. He’s going to wonder if this guy is going to go around his back to you. Different problem.

Solution me up, Big Red Car, please?

And, therein lies the solution.

The third hire guy? He’s no longer your problem, CEO. He is no longer your direct report. He is the direct report of the person you hired to oversee that growing department.

Tough love. Bit harsh. Not so touchy and feely. Truth.

He is no longer your problem, CEO, cause you’re now dealing with a Board of Directors, fundraising, reputation management, hiring more great employees for supervisory positioning, and a wife who wants to take a month long vacation and then send the kids to private school.

Get over it. Get over yourself. Be kind to yourself. This is normal. Normal, sometimes, can be a little tricky. But this is CEO normal and that’s the trade you’ve chosen.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be kind to yourself.cropped-LTFD-illust_300.png