As an early stage investor, I have worked with hundreds of CEOs and founders. Some successful, some not. I have seen some companies die within a year and others become unicorns.
Success requires every startup to unlock growth (we call it “finding Go-To-Market Fit”). Growth, although highly desired by everyone, has a huge negative cost; growth can result in former superstars getting fired.
Growth causes the company to change, thereby causing everyone’s job to change right underneath them. This applies to everyone from the CEO to middle managers, and even to the board. What used to work suddenly stops working. It’s maddening and frustrating, yet it’s totally the norm.
In no role is this more true than that of the CEO. Often the very behaviors and skills that were critical to a leader’s success at one stage, now become liabilities and hold them back at the next stage. The key to bridging that transition is something which I refer to in my latest book as ‘unlearning’. Leaders must unlearn the skills that used to work, but no longer do.
Often the very behaviors and skills that were critical to a leader's success at one stage, now become liabilities and hold them back at the next stage.
Here’s how the role, and skills needed by, a CEO dramatically change as the company undergoes three major growth stages.
Survival requires Wonder Woman/Captain America leading the platoon
Surviving is hard. Being a CEO in an early stage startup, fighting to survive, is incredibly stressful. Running through a leader’s head: Can we iterate to find GTM-Fit before we run out of cash and die? Can we hire the right talent even though we’re not yet proven? And for first timers: How do we know if we did the right thing if we’ve never done this before?
In this stage, the ideal CEO profile is a Wonder Woman/Captain America figure leading the platoon. The CEO is very hands-on. The CEO is the primary individual contributor who does it all: runs through walls, leads the troops into battle, digs ditches, engages in hand-to-hand combat. The CEO is the ultimate project manager who manages every task within the company in order to ensure the startup’s survival. This dramatically shortens decision-making and ensures tight coordination. The CEO is connected to every team member and leads by example. When the team needs to buckle down for a key product or deliverable, the CEO is in the office with them, keeping tempers in check when the pressure kicks in and leading the celebrations when victories are won.
The CEO and the platoon feel like a highly motivated, highly functional single cohesive unit—like a Navy SEAL team—with a great leader.
Scaling requires Captain America and the Avengers
As a startup starts to find its GTM-Fit, the company needs to begin focusing on scaling. And here the CEO job needs to change.
The CEO becomes Captain America leading the Avengers. Meaning that the CEO must hire and lead the Avengers, a band of capable executives. Each part of the company is now run by a superhero—a marketing superhero, an engineering superhero, a sales superhero. Because of their superpowers and focus, they can all do their respective jobs better than the CEO.
Now CEO must let go and work through the Avengers. Everybody in the company now reports to the Avengers, not the CEO. This is a big change for the CEO and the team. The CEO must now unlearn the heroic do-it-yourself behaviours. The CEO must learn how to delegate and relinquish control to the Avengers. The CEO must let go of the fear that no one else can do the job as well as they can. But, the CEO must maintain accountability and visibility—and overall control of the company.
Moving between these two roles can be a challenge, to say the least. In particular, because you have to learn to abandon some of the very qualities you cultivated to fulfil the previous role. For example, rather than leading the platoon, you have to start empowering your platoon to take over and become leaders themselves. I call this process ‘unlearning’.
[Read also: The evolving role of the CIO]
Continued scale requires Professor X and the Dean of the University
As the company reaches scale, the role of the CEO changes again. It’s no longer enough to lead a band of superheroes, Avengers-style. The company has accelerated to category leadership and must make the leap to become a sustainable industry leader. At this stage, the CEO must preside over and lead an entire army.
Rather than leading the platoon, you have to start empowering your platoon to take over and become leaders themselves.
The scale CEO role becomes more like Professor X in the X-Men, who was the dean of a special university. Each of the superhero executives is now both a warrior on the battlefield and a teacher ringing up the next generation of superhero leaders. Professor X is focused on winning the war rather than on any individual battle. The CEO finds himself or herself doing fewer things, but doing things for a lot more people across the company, and repeating themselves a lot.
The scale CEO is relentlessly focused on providing vision, driving the company toward its top-level goals, ensuring the right leaders are in the right roles, aligning the teams, and amplifying the company culture.
The leap from the Avengers CEO to the Professor X CEO requires a different behavior, mindset, and focus. Often the most difficult challenge is personal. The CEO must unlearn how they perceive themselves adding value. The new CEO role often requires disengaging from the very things that, up until this point, were closely tied to how the CEO perceives he or she contributed to the company.
Unlearning is the key
So much of building a startup is learning. Ironically, we rarely stop to think about what we need to unlearn. Unlearning is letting go of what used to work and working to understand what’s needed for the next stage. Unlearning can be unpleasant because it means going from feeling competent to incompetent. Unlearning can foster insecurity. Yet, unlearning is the key to leaders rewiring themselves in order to adapt to the next stage of the company’s growth.
Tae Hea Nahm is co-founding MD of Storm Ventures and author of Survival to Thrival: Building the Enterprise Startup: Change or Be Changed (Mascot Books, July 2019).