5 Reasons Founders Can Make Terrible CEOs

Founders have great business ideas, but aren't always born leaders. Here's why some can't cut it as a CEO.
July 01, 2013

From David Neeleman to Jerry Yang to Mike Lazaridis, many founders can't make the cut as CEOs for their companies. Of course, there are many successful ones too, including Mark Zuckerberg, Jeff Bezos and Larry Ellison.

Michael Useem, professor of management at the Wharton School and author of The Leader's Checklist, says the reason founders find it difficult to make the transition to CEO is because they struggle with the core principles of leadership.

Here are five leadership skills founders find most difficult to master in the role of CEO.

Build Leadership in Others

At a certain point, it becomes impossible for CEOs to be deeply embedded in everything that's going on at a company, which is why they need trusted leaders within their organizations. This is the only way the business can grow, but can be difficult for founders who are reluctant to give up control. 

"You can't do it by yourself. You have to get people to line up and help you," Useem says.

Articulate a Vision

CEOs must be able to "formulate a clear and persuasive vision and communicate it to all members of the enterprise," according to Useem. Doing so is essential to creating a system that can endure and expand beyond the leader. This can be hard for founders who are so focused on having autonomy in their own idea that they struggle to articulate it to others.

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"[You need] an ability to get beyond personal leadership and find ways to put it into the framework," Useem says. This way, whenever "anyone walks into the company, without you having to say anything, they have some fix on what you want from them."

Think and Act Strategically

CEOs must analyze where a company is going and anticipate future risks. Strategic leadership means questioning everything, even one's own ideas, and being willing to change directions. This can be hard for founders who are so set on their original idea.

Staying ahead of the game is more important than ever "because the world is now more complicated and more uncertain," Useem said in an interview with McKinsey & Company. "On top of always having a great vision there will be a premium on thinking strategically and on being able to come back from setbacks, and maybe above all, on being very good at reading the increasingly ambiguous and uncertain universe we operate in."

Place Common Interest First

When making business decisions, CEOs must consider their employees, their customers and their global impact. This can be hard for founders who may care more about their original idea and may feel entitled to getting the most out of the company that they created.

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"In setting strategy, communicating vision and reaching decisions, common purpose comes first, personal self-interest last," Useem writes.

Manage Relations

Part of growing a successful company is allowing people to feel ownership in the company so they have a sense of how the vision will affect their own work and career growth.

Different people bring different skills to a business, and a variety of skills are necessary for a company to grow. This can be hard for founders who may not be the most personable people.

As Useem writes in his book, a CEO must "build enduring personal ties with those who look to them, and work to harness the feelings and passions of the workplace."

Read more articles on leadership.

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