And why that means founders often fail as CEO’s
Remember what it’s like to be in love? All that heady, obsessive, out of this world and out of control stuff? For me, founding a business was just like that. Crazy, fun, compulsive, possessed.
We often describe our businesses as our babies. I think they are also the offer half of a madly, truly, deeply love affair. And as with being in love, we don’t have any choice about it. We have seen the object of our love in our mind’s eye and set about creating the perfect environment for it to take hold and prosper.
Founders are definitely in Love
When you are in love, the other person comes first, in every thought, every gesture. Their happiness is what you care about. So it is when you are founding a business. You live and breathe its growth, and everything you do is towards ensuring that it flourishes.
But, being in love passes and so it is with founders and their businesses. Over time, the relationship changes. Over time, other interests come back into your life. A routine kicks in. The novelty has worn off. You have looked at the figures, solve this team problem but you have done it before several times over. You may still love it, but you are not in love anymore.
While you are in love with your business, you crave being there, being immersed in it. You are only truly happy when you are with the object of your affections. It’s a rush, sometimes devastating, but highs and lows which you thrive on.
Being in love makes you feel good. You feel loved, needed, and appreciated. You focus on the object of your affections doing well and making them feel good. And being in love is as effortless as breathing.
CEO’s love but are not in Love:
The relationship between a business and a CEO is a slow burn, developing one. The initial introduction may be followed by a period of getting to know each other before any deeper relationship develops. Qualities are assessed on both sides, without initial obligation.
There is much more personal choice involved in loving someone and more choice in being a CEO. The choice is made more rationally, with more facts and experiences at our disposal. We can also choose to opt-in or opt-out at any time and can do so without the heartbreak that comes with being in love.
Because CEOs are not in love, they have a more rational approach. They still want the company to do well but don’t put them first regardless of whether it is right. CEOs are not blinkered by being in love and can see their companies’ faults and good points. They will strive to make the relationship work, but won’t sacrifice health, wealth, and happiness for no good reason.
There is less risk of a long and stable love ending in a big and emotional bang because there is more rationale. Loving is more likely to last. Emotions are steady and considered. Lives are balanced with other pursuits and less danger of burnout.
CEO’s need satisfaction in what they do. However, it is not all about the company, just as with loving, not everything becomes about the person you love. Instead, it is about how the CEO feels as a result of that relationship and how the stakeholders feel about the results within the company. It is a partnership.
The downside is that a loving relationship requires work to keep it going. It needs fuel and attention as opposed to the effortless crazy in love days. Loving someone or something requires effort and commitment.
Small surprise that only around 25% of founders last till things go official, leading their beloved down the aisle of a public offering.
Are Founder and CEO different?
In some ways, the answer to that is no. A CEO’s job description, to quote Investopedia, is the highest-ranking officer in the company, making major decisions, managing operations, and resources.
But they have not had an idea, fallen in love with it, and nurtured it, as the founder has. They have chosen to take the job and have been elected by the Board. A mutual decision based on mostly rational data.
The results tend to be very different too. A study done by the World Management Survey found that companies led by their founders are 9.4% less productive with consistently low management scores. While in theory, no-one knows the company better, cares for the company more than the founders, it just doesn’t seem to work.
Both need to be visionary and resilient but for the long term, not just in the heat and passion of the moment. The founder’s vision may fade as the company changes with growth. A CEO needs other skill sets. They need to have a reservoir of emotional intelligence and be able to earn trust and respect.
Emotional intelligence can be learned and developed. However, a leader has to recognize that they need to self-develop rather and that their obsession is not enough. Few founders want to encourage other people to lead. They feel threatened or fear that doing so will lead to those people moving on to new pastures.
The differences in clear thinking levels also lead to a difference in optimism levels. As detailed in this Medium article, Pardue University scholar, Arnold Cooper, asked 3,000 entrepreneurs their odds of either their businesses succeeding or ones that were similar to theirs doing so. Founders rated their own chances at 81% but similar companies at only 59%, with one in three believing their chances were 100% certainties.
We never think we will be one of the people who fall out of love.
Many In-Love Couples Break Up.
Not only do only one in five companies survive in the first five years, but large numbers of the founders get removed from their positions by tactful and less-than-tactful negotiation, amicable or less than amicable breakups.
A star-studded list of these breakups includes Travis Kalanick, the Uber Founder replaced on a seven-year itch. Rob Kalin broke up twice with Etsy, once for a year and then later for good. Nasty Gal founder, Sophia Amoruso, managed nine years.
Jack Dorsey only last two years into his first relationship with Twitter. Dorsey clashed with co-founder Evan Williams and for two years, Williams appeared to have the upper hand in a highly acrimonious war. However, it was Williams who the Board removed two years later. By 2015 Dorsey had been re-instated initially on a trial basis as CEO but later on a permanent one. Definitely a tale of an on/off relationship.
Perhaps the most famous on/off relationship of all is that of Steve Jobs and Apple. A board appointed CEO, John Sculley, had the Board’s support when he side-lined Jobs. Jobs claimed that he was fired from Apple though Scully denied it. Jobs moved on to other relationships, including NeXT. This story had a happy ending when Apple bought out NeXT and brought back Steve Jobs to be re-appointed as CEO in 1997.
If you listen to Guy Kawasaki’s Remarkable People podcast with Job’s co-founder, Steve Wozniak, Wozniak describes how Steve changed as the company started to take off from that time. The fun went out of the window, according to Wozniak. Jobs’ personality seemed to change.
How many people have complained about their mates being no fun after settling down in a relationship?
When a combination works best
Many colossal success stories that inspire other entrepreneurs are about founders who succeeded in transitioning into being CEOs. Those are the ones who take their romance to a long and happy marriage.
Perhaps the reason Jobs made that transition so successfully is how he worked at change and self-development. He worked at learning how to be a CEO.
But it was also always clear that he never lost his first love, and his passion for Apple remained t the end. Jobs was a master visionary with an incredible ability to speak about his vision. Bill Gates described Jobs speaking as “casting spells.”
He took the best from both being in love and loving, and sprinkled them with his unique magic, and ensured the relationship lasted his lifetime and the legend of it survived beyond.
Few of us can ever come anywhere near to this in our relationships, personal or business.
For a tale of a CEO who loves their business, read about Steve Jones of Allied Universal