One of my clients started his coaching session this week declaring he had a personnel issue. (For the sake of confidentiality, I’m leaving out some of the details.) Basically it was that awkward dynamic that can arise when you shed your old role of “Senior Technician of (your expertise)” and start the transition into new role of CEO of a small business. (Even when you don’t have the title of CEO, you may be acting like a CEO as your business grows and becomes more sophisticated.)

She said no…

It turns out that the conflict has been brewing for some time and came to a head last week. In a nutshell, the employee flatly told my client who is founder/owner/budding CEO that she was not going to do something he told her to do. He asked her to review a presentation with him as she hadn’t shown him the final version and they would co-presenting the following day. That’ s when she said no. She has a long history with this business both as a contractor and an employee so this was not what my client expected.

 What gives?

Yes, it’s possible that he asked in a way that sounded rude or arrogant. But what if he didn’t? (And for the purpose of this post, let’s suppose he was professional in his manner.) Many people in startups understand you all pitch in together to make a go of the business. There are titles but things have to be done. And then the business stabilizes and starts growing. Roles change and people have more defined job descriptions.

These changes can be deeply unsettling. Relationships are different. When the owner/founder steps into a role that demands more leadership and management skills, the interpersonal dynamics are different. There can be a disconnect between longtime staff and new hires. There can be a disconnect between the transitioning CEO and longtime staff and, frankly, sometimes new CEO’s don’t handle the interpersonal stuff with tact or sensitivity.

Can this mess be cleaned up?

Truth is, not always. Things are sometime said that can’t be unsaid. I’ve heard horror stories of people screaming at each other, lawsuits being threatened, filed, or acted upon, and new CEO’s getting forced out when the board gets fed up with the drama and lack of positive growth.

But if you can anticipate the mess, perhaps you can clean up the mess before it goes nuclear:

  • Know your limits. Not every founder is CEO material. You may know your story, your Big Idea, and not have the management or leadership skills to pull it off. Be honest with yourself about whether you are really the right one to be leading the organization as it moves into the next stage.
  • Notice what you resist. It is common for founders/CEO’s to resist setting up systems and policies as well as delegate responsibilities. There is a belief that one can still fly by the seat of one’s pants. You’ve worked too hard to grow a solid business with a bright future. Sure you can form a culture that you see as beneficial to productivity but the organization has grown larger than you. It needs a thoughtful, strategic, mature leader.
  • Talk to the longtime staff. These people may be your executive team or employees. Long-standing relationships need a different kind of attention and nurturing. Let them know clearly that you are learning to inhabit a different role, your behaviors will be different, and your communication style will change. If they feel resentful because they perceive you as egotistical or arbitrary, they could undermine your authority and relationships with new hires and affect productivity. Your small business is too small to absorb a lot of dysfunction. You will not be their pal or peer like you were during the startup phase. It is important that they know what to expect.

How do you handle the awkward dynamics of becoming a CEO of a small business?

 What tips would you give to a budding CEO transitioning out of startup phase?