Most startup entrepreneurs know it’s expensive to hire a professional CEO in the early stages of growth, but only a small percentage of entrepreneurs acknowledge that they are not born to be CEOs themselves for the long run. Being a CEO and being an innovative entrepreneur are two very different things, so how do you go about this in the best possible and most successful way? My name is Toke Kruse and I will give you the answers and insights in this blog post based on my 18 years as an entrepreneur.
The founder is the idea generator and creator, but not necessarily the operator of a company, meaning the founder may not be well-versed in standard operating procedures and routines, both of which are a big part of being a successful CEO. So, when I am building startups, I take on two important roles myself: the creator and the operator, which means I am both the CEO and the founder. But this setup is only preliminary and changes as soon as I get traction and the product has been market-tested. I then look for a CEO that can be the operator of the company, as most of the time it is difficult for the two roles to be covered by the same person. The most common setup is one in which founders keep the CEO position themselves, but I believe the best setup is to hire yet another CEO, so you have two CEOs in the same company. And there is a very good reason for doing so.
Is the concept double CEO roles really that new?
Having two CEOs at a company is not that new of a strategy as it may sound. Big corporations have done it for years (e.g. Oracle, Deutsche Bank and Salesforce), but even so, it still has not become a common setup in business. The biggest reason for not doing it is probably based on the popular misconception that you need ONE person to steer a boat, or it will sink or go in the wrong direction. Nothing could be further from the truth when it comes to building high-growth companies. You definitely need at least two people to steer, and it is not always going to be easy.
It takes two to raise a child, a startup is no different
The best way to bury the obsolete idea of just having one CEO is to use the analogy of raising a child. You might have heard people refer to your company as your “little baby”, well the same goes for building and growing a company. It’s just like raising a child, except no one questions that there might be two parents to do that. Two in charge, and two people to be held accountable.
An example from the real world
At my startup Bilagscan, after three years of creating and building the product, we have established the double CEO concept – right after I thought we had gained enough traction, and our team had grown to 15 people. This means that we are two people with CEO roles, and although one has the title “CEO” (Dan Rose) and the other “CGO” (myself), we are both equal and have each our areas for which we are held accountable. For instance, it is the CEO’s job to make sure that budgets, meetings and standard operation procedures are aligned, and it is the CGO’s job to make sure we’re growing, have the financial means to ensure continual growth, and that the growth is cultivated through the different sub-teams.
What to do next?
I want you to consider your own startup’s setup and be honest with yourself: are you an operator (traditional CEO) or are you a creator (typically the founder)? If you want your organization to be ready to scale, you need to get all your standard operation procedures ready, but at the same time, you also need to stay curious and innovative. If your team today is made up of 5-10 people, you may not deem the CEO role difficult to handle on your own, but when your team is growing rapidly and the number of people on your team starts to double, you will find it hard to do both things at once. Therefore, if you want to build a successful startup team, the best advice I can give you is to get started in creating a management team consisting of two CEOs.
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Edit May 2019 // Changed language and imagery to meet The Hub’s reviewed guidelines for diverse and inclusive representation.
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