It’s a classic tale. Your company’s driven, visionary founder manages to lead your start up to takeoff and hit rapid growth mode. But then something happens, and everything starts to bog down. Those former start up struggles and early wins turn into a whole new set of challenges: running the business at scale. At about this time in an organization’s lifecycle, conversations in the board room and around the water cooler start to focus on the founder. See if you’ve said or heard any of these before: Our founder has great energy and ideas (along with some really dumb ideas) but we still can’t seem to get our act together. It’s no secret our founder isn’t an Operations person. We need to either replace our founder or support her with someone experienced who can run day-to-day operations and keep the trains on time. What we need is a President/COO. Then the founder/CEO can be Mr. Outside and the President/COO can be Mr. Inside. Does any of that sound familiar? I bet it does. On the surface, having a President/COO can make a lot of sense. Every organization needs stability, structure, and experience if it is going to scale up. The approach is certainly popular. “President and COO” titles are so common—throw a stapler in the air at your local office park and you’re bound to hit one on the head. But hiring a President/COO to solve the “founder” problem typically brings just a new set of problems, setbacks, and even disasters. In many cases I’ve seen, the new President/COO was a sure bet on paper but failed replicate past successes in a new environment. In another common scenario, you’ll find that soon after joining, the new President/COO will get into conflict with the founder/CEO about who really runs the business. When this happens, the culture quickly erodes into “old guard” vs. “new guard” and execution speed bogs down across the board from all the in-fighting and politics. There’s also a little appreciated but equally severe problem that happens when the founder leaves the business too soon, now that “the professionals are in charge” or because “it’s just not that much fun around here anymore,” and the company fails to capitalize on its true potential over time. While hiring and integrating capable senior leaders into the organization is needed and necessary to scale your business (I’ll show you how to do this here), the popular approach of having a President/COO to oversee business execution usually turns out to be a fix that is much worse than the original problem. I’ve coached over 50 founder-led, high-growth companies to increasing revenues and profits without a traditional President/COO and without consolidating business functions under a few key leaders like a President, COO, and/or CFO. I can say with confidence that there is a better way to build great leadership to help an organization scale, without the drawbacks of the popular approaches. The answer lies in understanding the Leadership Team model. With a strong functional Leadership Team, you avoid the typical problems of the President and COO approach in favor of a distributed, transparent Leadership Team process. Done well, it’s the difference between a monarchy embroiled in power and succession battles and a functional representative democracy. I’ve seen it work over and over again. And it all starts with how you think about what’s really needed to scale your business.
Continue Reading at the Source: Organizational Design: Why You Should Not Have a President and COO | Organizational Physics by Lex Sisney