Why Founders Often Make Terrible CEOs


This post was originally published on OPEN Forum.    

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jerry yang
Jerry Yang is the co-founder and former CEO of Yahoo.

From David Neeleman to Jerry Yang to Mike Lazaridis, many founders don’t make the cut as CEOs for their company.

Of course there are many successful ones too, including Mark Zuckerberg, Jeff Bezos, and Larry Ellison.

The difference may come down to how well founders demonstrate the 15 core principles of leadership, according to Michael Useem, professor of management at the Wharton School and author of “The Leader’s Checklist.”

Some of these can be hard for founders, including the ability to:

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. This is the only way for an organisation to grow.

 This can be hard 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 tells Business Insider.

Articulate a vision.

CEOs must be able to “formulate a clear and persuasive vision and communicate it to all members of the enterprise,” writes Useem.

Doing so is essential to creating a system that can endure and expand beyond the leader.

“[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 and without you having to say anything, they have some fix on what you want from them.”

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.

Think and act strategically.

CEOs must be able to analyse where a company is going and anticipate future risks.

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.”

Strategic leadership means questioning everything, even one’s own ideas, and being willing to change directions.

This can be hard for founders who are too set on their original idea.

Place common interest first.

CEOs must worry about their employees, their customers, and their global impact.

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

This can be hard for founders who may feel entitled to getting the most out of the company that they created.

Manage relations.

CEOs must “build enduring personal ties with those who look to you, and work to harness the feelings and passions of the workplace,” writes Useem.

Part of this is allowing people to feel ownership in the company so that 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 care more about ideas than employees.


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