Top Responsibilities of a Startup CEO
14 min Read
We often hear about big company CEOs like Elon Musk (Tesla), Rajiv Bajaj (Bajaj), and Mukesh Ambani (Reliance), and the hard work they do. But being a startup CEO is quite different. The difficulties and problems they face aren’t always talked about. Being a successful startup CEO is both really hard and enormously rewarding. As the leader of a small and growing business, the CEO has to steer the whole company and make important decisions that will decide its future.
In the startup world, the goal is not just to run a business but to produce radical results. Startup CEOs aim to bring something new and groundbreaking to the table. It’s about thinking differently, being innovative, and creating a significant impact. While big company CEOs manage established businesses, startup CEOs are the trailblazers, pushing boundaries, and striving for radical results in the business world.
Three Important Phases of a Startup CEO
When startups grow, they go through three big phases, and the job of the Startup CEO changes a lot in each phase. In the first phase, the CEO’s main job is to create a product or service that people love. In the second phase, the CEO’s focus is on building a company that can make the most of the opportunities the product or service brings. The third phase is about making money from the main business for living a great life or to invest in new and exciting product or service ideas.
We will talk about how to be a great CEO and how to win as a CEO in the second phase by doing the most important tasks that only the CEO can do. At Radical Results and In my journey of running several startups and working with large enterprises, I’ve seen that when it comes to shift from first phase to the next, many CEOs transit successfully and some CEOs struggle. The future of your startup depends on which kind of CEO you become.
Role of a CEO in the First Phase
When you start a company, your first big phase is to make an awesome product or service that a small group of people really loves. In the beginning, as the Startup CEO, you’re like the chief of everything deeply involved in creating the product or service and getting people to use it and make them pay for it. Delegating tasks to others is not something you think about much. If things go well, it’s because your hands-on work and unique ideas that give the company a special perspective and energy that very few other than you could have. Another important thing for a Startup CEO in the early stage or in the first phase is to be careful with money so that there’s enough time and resource to make the product or service better.
Many startups don’t make it because they can’t create a product or service that people love more than what’s already out there. Success in the first phase means your product or service is in high demand, and your small team can’t keep up. This is the pivot point in your business, now your job as CEO is to focus on building a company that can handle the influx of business as well as create a system for continuous growth in the demand. This is the main role of a CEO in the second phase of a startup. The company you build becomes your second big creation and you leave a lasting mark as the founder.
Role of a CEO in Phase Two
As a Phase Two CEO, you need to transit from being the one who does everything himself to the one who gets everything done by others. This is how you scale your power as a Startup CEO, and this scaling is the first step in sustainable company-building. For most founders, this is very difficult. When you’ve been a successful as a person who does everything himself, it’s hard to refrain yourself from doing everything yourself and getting it done from someone else. It’s hard to stop coding, designing and dealing with customers on a daily basis. It’s hard to stop answering support tickets or doing all the product demos. It’s even hard to delegate the random and sometimes menial tasks that you’ve accumulated over the years because they were “no one’s job.” But you have to stop doing all of these things so that you can safeguard your time for high leverage tasks that only CEOs can do.
When your role changes from doing to leading a team, it might confuse your team. They might wonder why you’re not doing the things you used to do or why you’re giving them tasks that you used to handle. But as your startup grows and has around 10-20 people, you have to spend more time leading, which means guiding what others do. Time is limited, so the only way to lead more is to do fewer tasks yourself. If you don’t delegate, you won’t have enough time to focus on building and growing the business, and it will slow down everything else.
It might feel really hard at first, but over time, you can get others to handle all the daily tasks you used to do in the first phase. Of course, you can’t just stop everything suddenly, but your goal is to hire people who are better than you for leadership roles. The aim is to build a team so good that you don’t need to get into all the little details. When a company expands, it becomes important to have more structured ways of sharing information. When communication isn’t clear, it often causes a set of common problems and so you should structure your CEO meetings schedule in the following way, Weekly Core Team Meeting, Bi-Weekly Core Customer Success Meeting, Monthly One-on-One Growth Sessions, and Quarterly All-Team Meeting.
Usually, the second phase starts when a startup has about 10-20 employees and goes on until it reaches 300-500 employees. By the end of this phase, you should have a team of leaders you can trust to take over everything you did in the first phase. Your team should be skilled enough to work well without you getting too involved, as long as you’ve given them clear direction.
Phase 3 where the CEO becomes a key player
Now, you can let your leadership team handle most of the work, and you can start focusing on the third phase: making profits from the main business and using them to create new, game-changing products. As an example, Facebook built its top team during the second phase while keeping the business balanced financially. In the third phase, it started making big profits in its main business and used that money to invest in Messenger, and to buy Instagram, WhatsApp, and Oculus.
Phase 3 is marked by a dual responsibility: optimizing the existing business for continued success and driving innovation by exploring new avenues and ventures. The CEO becomes a key player in steering the company toward sustained growth and relevance in a dynamic market landscape.
Five Tasks That as a Startup CEO you Can’t Delegate
In simple terms, as a Phase 2 startup CEO, your main task is to let others handle what you did in Phase 1 so that you have time for five very important jobs that only you can do:
1. Hiring and Aligning your Leadership Team
As the Startup CEO, it’s your job to hire the leaders for your company and make sure they all are aligned with the organization’s vision and mission. This process of getting everyone on the same page is also known as “aligning your team for a shared vision and achievements”. While you can get help and advice from others during the hiring process, the final decisions must be yours. You can’t compromise when hiring leaders. The decision has to be yours because you’re the one who will face the consequences.
Recruiting, aligning and retaining leaders take an extraordinary amount of time. If you’re doing it for the first time, meet as many people as possible to learn what skills, experiences, and personalities you need. Many successful founders and CEOs meet the best in each field to understand what a great candidate looks like. Because hiring leaders takes so much time, it’s better to do it in stages instead of trying to hire everyone at once. My suggestion is to hire a good search firm to help with your first few searches. It will cost a lot, but if it helps you find the right person, it’s totally worth it.
If you already have a team in your company, the smartest thing to do is to check within your team first. See if there’s someone you can help grow into a leader. People who grow into leaders within the company are more likely to do well than hiring someone from outside. This is because internal promotions often lead to greater success because the person already knows the company culture, the way things work, and the team. They’ve been part of the journey and understand the challenges. On the other hand, an external hire might take longer to adjust and might not be familiar with the company’s unique dynamics. By nurturing someone from within, you not only save time on onboarding but also foster loyalty and dedication as they’ve been a part of the company’s story from the beginning.
At Radical Results I coach founders and CEOs to manage their business using weekly milestones to ensure rapid iteration and progress. But that’s only great for a small company trying to find its first 100 paying customers, but it’s not the way to manage your leadership. You should manage your leaders to longer term outputs rather than week-to-week tasks. To do this well, you first have to set the right quarterly, annual and three year milestones for the company and for each Leader. To the companies I coach, I first help them in establishing three-year milestones, which are then broken down into milestones for each year, quarter, month, and week. This structured approach is based on the principle: You Can’t Manage What You Can’t Measure by Peter Drucker. Setting long-term goals is crucial, but breaking them down into smaller, measurable milestones makes them more manageable and actionable. By creating a roadmap that spans from yearly to weekly objectives, companies can not only track progress but also make informed adjustments as needed. This method ensures that goals are not just aspirations but concrete, achievable steps that contribute to the overall success of the company.
You also need to help new leaders get used to how the company works. When you’re forming your leadership team, plan and schedule yourself on spending more time with new leaders, both one-on-one and as a group, focusing on the company’s culture, teamwork and assisting them in leading their teams. It’s important to encourage them to take the time to build relationships with everyone in the organization instead of rushing in and trying to make big changes right away. You can show them how to do this by building strong relationships with them and their families.
2. Measuring Performance of your Leadership Team
Learning how to measure the performance of your Leaders is also a challenge, partly because your face-to-face interactions do not provide much of the information you need. You need to see how well your leaders are building their teams, if their team members are happy and working well, and how they collaborate with other teams, leaders, and customers. It’s normal for about 33% of your leadership hires not to work out. Firing a leader can be tough, but it’s better to act fast and create a gap in the organization than to keep an ineffective leader for too long. The longer you keep an under-performing leader, the more trust you lose with your team.
Your work is finished when your whole leadership team is hired, you’ve trained them or hired a Best CEO Coach to help you coach them to work in alignment, and they can operate effectively without needing you too much of your time. It’s okay if almost 40-50% of your time is spent on hiring and aligning your leadership team; it’s time well spent.
3. Choosing, aligning and executing a strategic focus to position your company as a market leader.
To position your company as a market leader, it’s crucial to meticulously define and implement a focused strategy. This involves focusing on a particular area of expertise or market segment where your business can excel as a market leader. By doing so, you distinguish your brand from competitors, creating a unique value proposition that resonates with your target customers.
Identifying this strategic focus requires a deep understanding of market trends, consumer needs, and your own organizational strengths. It’s about recognizing opportunities where your company can outshine others, offering something distinct and valuable. Once pinpointed, the next step is a dedicated implementation plan.
Execution involves aligning resources, optimizing processes, and leveraging your team’s capabilities to deliver on the chosen focus area. Consistency and excellence in this domain will gradually build your company’s reputation and authority. Over time, this strategic focus becomes synonymous with your brand, attracting customers and partners who recognize your expertise. By defining and implementing this area of focus, you pave the way for your company to not just compete but lead in the market.
4. Build and nurture your company culture
Building a company’s culture is a bit tricky to understand. It’s mostly about how people treat each other in a company—how leaders treat employees and how everyone treats each other. The culture starts to take shape when the second person joins the startup. The way founders and early team members treat each other in the beginning sets a tone for the culture, and this tone can stick around for a long time.
Creating a good company culture isn’t just the CEO’s job; it’s everyone’s responsibility. Unlike setting goals and measuring progress, the CEO can’t just go into a quiet room and write down a set of rules for everyone to follow. This approach usually doesn’t work because the written words might not match how everyone in the company really experiences it. Instead, the CEO should encourage co-founders and early employees to work together to figure out a set of values and ways of behaving that feel real and inspiring to everyone. For the culture to work on its own, these values must connect with how the company has acted before. That’s what makes them feel real instead of made up. If you want the company to show a value that hasn’t been there before, then lead by example, and make sure everyone in charge follows that way before saying it’s a company value.
What makes your company who it is? The answer usually lies in the past, especially in the early days when success wasn’t guaranteed. Maybe it’s a dedication to doing things well, like putting “story comes first.” Or it could be a way of working, like “go fast and break things.” Once these values are clear, the CEO needs to ensure that every new leader in the company acts according to these values. But, it’s not just the CEO’s job to make sure this happens. Everyone in the company has a role in making sure their leaders, peers, and even themselves stick to these standards. The CEO shouldn’t ignore actions that don’t match the company values. Instead, it’s the CEO’s job to tell the leadership team when they see these actions and make sure they fix things to match the values.
4. Most underrated Job of a CEO is to keep his or her calendar free for at least half of the time.
One of the most underrated yet crucial tasks for a CEO is the intentional management of their calendar. As the leader of a startup, your time is a valuable resource that, when used judiciously, can significantly impact the trajectory of your company. Here’s why keeping your calendar free is a strategic imperative:
Maintaining a free calendar allows you to direct your attention to strategic thinking and high-impact tasks. Instead of being bogged down by a deluge of meetings, you can allocate time to formulate and execute essential business strategies. This strategic focus is instrumental in navigating the complexities of running a startup.
A CEO’s role goes beyond day-to-day operations; it involves envisioning the future of the company. An unoccupied calendar provides the time for contemplation, allowing you to reflect on the broader vision, long-term goals, and innovative ideas. This reflective time is crucial for fostering creativity and envisioning the next steps for your startup.
A free calendar ensures that you are more accessible and responsive. Whether it’s addressing concerns from team members, collaborating with leaders, or engaging with stakeholders, having the flexibility to allocate time for effective communication fosters a more connected and informed organizational culture.
In essence, keeping your calendar free is not about having idle time but rather about strategically allocating your time where it matters most. It empowers you to be a proactive, agile, and visionary leader, steering your startup toward long-term success.
A story to help you understand the importance of keeping your calendar free.
In a Pixar meeting, Steve Jobs once shared, “When I’m doing my best, half of my time isn’t planned. It’s when I think, visit people I want to talk to, and let my imagination wander. That’s when I get creative. If I didn’t have this free time, I couldn’t stay ahead of the company. Leading a company means being two steps ahead; you can’t do it from behind.” For a Phase 2 CEO, having a lot of unscheduled thinking time is a big achievement. It means you’ve built a strong leadership team, handed over daily tasks to them, and defined the company’s mission and strategy well. Your prize is the luxury of time to think and shape the future of your startup.
In conclusion, the journey of a startup CEO is a dynamic and challenging adventure that evolves through distinct phases. From the inception of creating a product to navigating the complexities of building a sustainable company, each phase demands a unique set of skills and focus. As a Phase 2 CEO, the pivotal transition involves relinquishing hands-on tasks and empowering a capable leadership team. This shift is not just about delegation but strategic empowerment, allowing the CEO to focus on tasks that shape the company’s trajectory.
Crucial responsibilities, such as hiring and aligning the leadership team, measuring performance, defining strategic focus, and nurturing company culture, become paramount. These tasks are not just checkboxes but integral elements that define the company’s identity, performance, and long-term success. Furthermore, the often underrated task of keeping the CEO’s calendar intentionally free emerges as a strategic imperative. This intentional freedom fosters strategic thinking, innovation, and responsiveness, crucial for steering the startup toward long-term success.
In essence, the role of a startup CEO is not only about managing day-to-day operations but about being a visionary leader who can navigate uncertainties, inspire a team, and strategically shape the future of the company. Through intentional leadership, strategic delegation, and a focus on high-impact tasks, a Phase 2 CEO propels the startup toward sustainable growth and radical results.
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