It’s often said that when companies reach a certain size, founders should stop working in their business and start working on their business. In other words, hand over the day-to-day operations to someone else and focus on topline tasks like meeting new clients.
Entrepreneurs searching for insight on how to delegate are spoiled for choice – there’s a wealth of available advice on how founders can step back. Yet there’s surprisingly little said from the other side of the fence: how does it feel to effectively take charge of an entrepreneur’s pride and joy?
Throughout my career, I have stepped in when founders have stepped out – first in luxury hotels and hospitality, then with shared workspace provider Central Working, where I spent four years as managing director before becoming CEO in 2017.
I couldn’t be prouder of how the business has grown during this time. But I won’t pretend that there haven’t been lessons to learn.
For anyone who finds themselves stepping as a founder steps back, it’s crucial for everyone –including yourself – to recognise why you’re there. Many new CEOs or managing directors believe their job is to step into the shoes of the founder but this couldn’t be further from the truth.
Central Working’s founder, James Layfield, is a serial entrepreneur. His background meant he was ideally positioned to know exactly what entrepreneurs needed to thrive and could provide this through the supportive environment of Central Working, the shared co-working space startup. He had an unshakeable vision for the business and a leadership style that our team easily bought into.
When I first joined the business, co-working spaces were still in its infancy. As one of the sector’s pioneers, Central Working were performing well, launching sites across London and looking further afield too. But even in those early days, the industry was still competitive and becoming more crowded with each passing week.
In this kind of high-pressure environment, it can be too easy to look to the leadership style which has worked for the business in the past and simply try to emulate it. But knowing your skills and strengths is essential as is not wavering from employing them.
Despite working with entrepreneurs across my career, I’m not an entrepreneur myself. I was brought into the business because James was familiar with my background in running five star hotels and wanted to bring that luxury service model into shared working. Over time, we’d carve out our own distinct roles, with James maintaining the company’s overall vision and direction while I ran operations day-to-day.
However, at first our lines of communication weren’t fully formed. Both of us spent time reporting back to each other rather than listening. This sometimes led to one of us end up taking on a task the other was halfway through. Clearly defined separation of responsibilities stops either side stepping on toes. Moreover, it also prevents staff from playing one off against the other, asking dad when mum said no.
Starting a business from scratch and powering that company’s vision requires a distinct mindset, and too many managing directors fall into the trap of thinking they should – or even could – do what the founder does. But remember the old rule – if you could have done it, you would’ve. Leave your ego at the door and recognise that you’re there to seamlessly implement the founder’s dream.
This doesn’t mean you can’t have a transformational impact on the company – by the time you’re appointed, it’s likely the business has long since moved beyond the phase when the founder could wear many hats and do all jobs effectively. Although, some entrepreneurs find it difficult to loosen the reins. But any managing director should be proving their value every day, consistently improving the way the company operates to bring everyone that one step closer to the founder’s overall vision. Remember – as someone far closer to day-to-day operations, your knowledge of certain areas of the business or sector can often trump theirs. Don’t be afraid to politely reiterate this.
The fundamental reason why so many founder-CEO relationships crumble is a failure to get on the same page. Either the founder simply can’t trust another person to take control of their business or the person coming in doesn’t realise that’s what they’ve been brought in to do. Unfortunately, the former is the more common. It’s down to you to earn that trust.
Ultimately, remember that everyone is there to help the business scale. And just as we encourage founders to relinquish control, we should also encourage managing director and CEOs to have enough confidence in their own skills to take some of that control. A company cannot survive when one senior person is trying to do the job of another, and businesses that don’t combine driven-yet-trusting founders with skilled, confident managing director will never scale effectively.