3 Reasons Entrepreneurs Are Not Suitable for CEOs

By | 05.01.2021

Forget the tale of Jeff Bezos or that of Mark Zuckerberg: the founder of a company is almost never able to bring his creature to success as CEO.

After all, having an entrepreneurial and visionary perspective does not always coincide with having solid skills management and managerial skills. As if a Ferrari engineer, after fine-tuning the racing car, decided to sit behind the wheel during the GP race. How many chances would there be to get the front row?

Insisting on remaining at the top of the company founded can have negative consequences for the business and put corporate health at risk.

Recent research conducted by a joint team of professors from the Duke, Vanderbilt and Harvard Business Schools testifies to this: analyzing a sample of over 13,000 companies in more of 32 countries to the world it emerged that the realities led by the same founder were almost 10% less performing than the others. Possible? Yes, looking at the “litmus test”: simply by replacing the founding CEO with a professional CEO manager, the score rose to normal levels.

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The reasons for the failure of the entrepreneur as CEO? Here are listed 3.

1. Entrepreneur and manager: different objectives

A manager hired by a company has a specific goal in his sights: to lead the company to success and to balance all performance indicators, using every legitimate tool in order to reach the set target.

On the other hand, the goal of an entrepreneur is different, who often hides behind the choice to found a business personal motivation such as the need for more freedom or the desire for more control.

Different motivations, different performances: we don’t have to explain which of the two management styles will have the best chance of surviving, do we?

2. Few economic resources

After an initial launch phase, it is essential that l ’company survives and has sufficient economic resources to invest in innovation and development. A more complex activity, that of fundraising, if its founder is at the top of the company. According to research, in fact, investors are less likely to financially finance a company that depends too much on a single leader, interpreting this variable as an alarming risk factor.

Without considering that a visionary entrepreneur at the top scares the financiers for his dubious preparation: will the founder know how to lead the Company like a great manager? The question alone literally makes sponsors run away, penalizing the chances of business success.

3. Poor strategic vision

The job of a good CEO is to set long-term goals and anticipate possible market risks. Having a clear and detached vision is essential to objectively evaluate the progress of the business and, in the case of setbacks, to implement corrective solutions. Showing winning leadership, therefore, means being ready to question everything – even your own ideas – and being willing to change direction.

Unsurprisingly, a founder is more reluctant to change and risks dragging the Company to ruin, due to being too attached to their beliefs.

In short: if you have excellent entrepreneurial talent, capitalize on your skills and start the engine of the Company. Insert the first one, warm up the car, and… take a seat in the passenger seat: your CEO will guide you to success.

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