A few weeks ago, the CEO (and my cofounder), Brody King, in my current business, Restore, asked me a question most every other emerging business is grappling with, too.
“How do I make the shift from operator to owner?”
The first months in our new business (launched in March) have been exhilarating, but have been exhausting as well. Our facility is beautiful, but some of the upgrades in our build out exceeded our budget. (No problem there; we are thrilled with the outcomes and can build them into our template for additional sites.) As we operate the first facility of the many we are planning for the eight Mountain West states, we are spending extra time with customers, with our employees and with our sleeves rolled up while working every role to ensure we get every detail right.
Like every startup business, we know the importance of wearing multiple hats, understanding our customers firsthand, and learning the nuances of each position before turning the reigns over to others. But we also know that if you work within your business (as an operator) for too long, you risk making yourself indispensable to the day-to-day operation. Not only do you miss out on the creativity others could bring to the table, but you may be limiting growth as you lose the benefits of networking and the clarity that comes from strategizing from outside company with trusted advisors. As an operator, you miss the partnerships that are only possible when you are behaving like an aggressive owner instead.
So which role are you predominantly fulfilling, and when and how do you make the transition? Here are some key questions that will help you decide.
- If you were to take a two-week vacation, what would happen to the business while you were gone? Would the business survive? Or would you spend the entire time on your phone or laptop answering emails and putting out fires? Would your vacation cause you more stress than reprieve because you are out of the office? If your business would suffer in your absence, the verdict is clear. You are business operator; not an owner.
- Are you able to be strategic, or are you doing the same things over and over again? If you are too busy to innovate or create more effective solutions you are definitely in the role of operator. An owner is able to step back and see the bigger picture, at least from time to time.
- If a great opportunity emerged to scale your company faster with a strategic partnership would you take it? Or would you be too worried about losing control? This is a critical question—an owner, thinking like an investor, would look for effective outcomes and would gladly examine the bigger avenues at every turn. An operator, in contrast, would fear the unknown and leave the big idea on the table.
So what happens when the CEO remains an operator for too long? Growth suffers. Innovation is slow to happen. The founder struggles to find a successor, and the original CEO becomes burned out in a role they believe they are stuck with for the rest of their lives. The moral of the story, then, is to make the transition sooner than later and accomplish it well. If you simply cannot, perhaps you need to fire the CEO (even if that person is you).
The following are the traits of ownership you should work to instill within yourself and your business today:
Delegate everything you can delegate. The days you spent in an early role will provide you with words of experience and advice you can pass on to others, but remember, your experience is merely a data point. Hire people with hunger and talent and provide them the room to use their own creativity to do the job even better than you. For example, a prominent woman CEO in Utah has made it a personal policy to not do any job herself that anyone else within the company is able to do. While this might sound counterintuitive (and it is important to let your team see exactly what you are willing to do, when the situation requires it), she has made a great deal of revenue for her investors over time.
Always be recruiting and fundraising. Two of the most important functions of an owner-centric CEO are to recruit great talent and to be sure the company as ready access to the capital it will need. Falling down on either of these fronts is a path to disaster, at worst, and at a minimum will impede your optimal growth.
Hire people who are differently and better skilled than yourself. You should be compelled, not frightened by the prospect of hiring people who are stronger than you and when needed, are even paid more highly than you.
Hold others accountable for results, but encourage mistakes. I call this strategy “failing fast.” Every mistake is a data point for future decisions. It is vital to learn and remember the lessons you learn from the times you have failed. Allow that room and learning for your employees as well.
Cultivate culture. Every company has a culture just like every company has a brand, whether it is intentional or whether it exists by default. Decide which values are most important to your business and build an environment that supports those values at all times.
Be a coach and cheerleader. Spend the majority of your time mentoring and encouraging others. Avoid the temptation to micromanage or take over when the going gets tough.
Have a big vision and update it frequently. Where do you want your business to be in the coming three years? Five years? Ten? Map it out and communicate it to your team to allow them to share in the vision of what is possible if they are able to execute passionately on the goals ahead.
Based on this advice, you can guess that my input to my partner (and to myself) is to transition as soon as you can from day-to-day operation to the bigger focus of ownership that will propel your company growth. Your employees and shareholders will thank you, and your own work and livelihood will be more rewarding as well.
