Overview

While the two titles are often interchangeable in the same leader of a business, a CEO doesn’t always make a good entrepreneur and an entrepreneur doesn’t always make a good CEO.  Both positions require drive and the ability to create vision and galvanize teams, but each has nuances that require different skill sets.

The CEO

The makeup of a good CEO requires vision, leadership, professional development and delegation.  The responsibility of a CEO is to guide the executive team toward leading each division in pursuit of a clearly stated common direction.  It is the CEO’s responsibility for the bottom-line, as it is the entrepreneur’s, but the pathway between the two positions often takes different routes.  In the case of the CEO, creating a culture and direction for the company on a macro level is essential.  Closer to home, the CEO must work with, guide and groom his/her senior leadership team.  These efforts help press the company toward a common goal while ensuring the different parts of the organization cohesively come together.

The Entrepreneur

A successful entrepreneur requires a level of risk taking to build something out of nothing.  To create through a vision, when no one else may see the picture that resides in the entrepreneur’s head.  Leadership is essential in this role as well but it may take the form of inspiration.   This allows the founder to lead a team towards a vision that the entrepreneur is passionate about. Like the CEO,  the entrepreneur must also hire solid professionals to grow the organization in order to scale towards future prosperity.  The culture driven in an entrepreneurial organization is that of the entrepreneur himself.  It is the vision, charisma, values and goals of the entrepreneur that guide the organization to future success.

The Entrepreneur CEO

More often than not, especially with younger organizations, we see the entrepreneur in the CEO role.  This does not mean that he isn’t the right person for the CEO role, but it does mean that as an organization grows, the entrepreneur needs to be careful that they too grow professionally into the leader the larger organization requires.

A successful CEO, whom has never founded a company, will never truly know an entrepreneur’s plight.  The CEO can most certainly empathize with the entrepreneur’s journey and the CEO too knows the pressures and responsibility of leading.  However, it is only the entrepreneur that will know the personal risk of starting a business from scratch.  It is a unique journey to dream an idea and bring it to fruition.  This journey offers getting beat down through the tougher times and second guessing oneself when times are at their lowest.  The entrepreneur, through their risk taking and hard work, has earned something special.

That doesn’t mean that as the organization succeeds  the entrepreneur is the best fit to lead the the company into the future.  If the founder applies himself, he can become that person, but the fact remains that the entrepreneur needs to personally grow as the business professionally grows in order to maximize future success.  Since the entrepreneur took personal risks to begin and grow the organization, he takes the future of the company personal as well.  This is not to say that the non-entrepreneur CEO doesn’t take his role seriously, he does.  However, he may be able to take the responsibility seriously without taking it personally better than the one who founded the organization.

Both Can Exist In The Same Person

All of us have limits.  Through professional development and hard work, we expand the boundaries of our personal limits to become more effective, more useful.  Through the life cycle of a business, the leadership position may be best suited for an entrepreneur initially to drive vision, take the risk and provide a foundation for a new company.

At a certain point, the best move for an entrepreneur may be to appoint a new CEO who can carry the ball the rest of the way.  When looking at the stage of a company objectively, a CEO who can take the company to the next level once it is established may fall flat on his face if he tried to start the company from scratch.  There are different skill sets at work in these roles.  A solid leader willing to grow professionally can likely be an entrepreneur and a successful CEO, but this shouldn’t be assumed.  It takes work and change to see a company from its origins through to its finish if the size of the organization continues to grow.

Passing The Torch

Sometimes, the best course of action for the company is for the entrepreneur to sit as the chairman of the board and hand over the reins to a successful CEO.  This allows the spirit of the entrepreneur, the historical wisdom and knowledge and guidance to remain while allowing the company to scale under one whom has successfully scaled companies in the past.  In this scenario, it is important for the entrepreneur to release the day to day control of the organization to the CEO.  While the wisdom of the entrepreneur will still be a valued resource, it is the CEO that is responsible for the leadership and results of the company.  The CEO’s job is dependent on achievement, don’t inhibit his progress by overstepping.  If you do, you will not retain a quality CEO for any substantial duration of time.

Parting Thoughts

The purpose of this article is not to state that an entrepreneur cannot be a successful CEO.  Far from it.  It is to merely illustrate that there are different skill sets at play within each role and the smart leader should recognize these differences.  Then the entrepreneur can purposefully make the internal changes to become a good CEO or pass the baton to leadership that can drive the organization to the next level.  An entrepreneur should remember that while he personally assumed all of the initial risk in the venture, he now has people whom work for the company that are counting on the appropriate leadership.  Not only for themselves but also for their families.  Take the decision seriously, consider all of the variables and your business should be the better for it.

Rob Comeau is the CEO (and entrepreneur) of Business Resource Center, Inc. a management consulting and M&A advisory firm.  To visit BRCI online, please go to www.biz-rc.com.