There comes a point in the growth journey of a startup where the role of CEO must be filled or even replaced by a co-founder. There are numerous instances of this in startup history. For example, Steve Jobs was forced out of Apple in 1985 after a power tussle with the then-CEO, John Sculley. Dara Khosrowshahi took over as Uber's CEO in place of Travis Kalanick.
This transition often creates strain and conflict between the founder and the CEO because the two may have different ideas about running the startup. Moreover, as a founder, you may have a specific vision about the company’s role in future, but when a new CEO steps in, you could feel it is being compromised. The inability to work in unison often results in a disruption in the decision-making process of the startup, affecting all stakeholders.
Therefore, it is crucial for the startup’s success to keep this tension in check. With that as the backdrop, here are a few approaches to reducing conflict.
6 Ways to Reduce Founder-CEO Friction
The founder can ensure that the startup continues to thrive by acknowledging that you and the CEO are not adversaries but partners working towards a shared goal.
Once you’ve fixed this perspective, here is how you may assuage the friction effectively.
1. Set Explicit Roles And Responsibilities
The first approach to reducing founder-CEO friction is clearly defining the roles and responsibilities at the offset. This includes specific goals and targets and outlines how decisions are made within the company.
A clear hierarchy and decision-making process prevent confusion or overlap in duties, which can be a major pressure source. Further, it ensures that decisions are made on time and efficiently. For example, if the CEO assumes responsibility for the day-to-day operations, the founder adopts more of a strategic role in deciding the startup’s ambition.
2. Sketch Out Communication Flow
You should foster a culture of transparency and open communication, as it is crucial to keep the founder vs CEO tussle in check. This means planning how communication flows and being clear about expectations and concerns. An open dialogue ensures everyone is on the same page when it comes to the startup's path, performance, and progress.
3. Seek Out Feedback
Be open to feedback from each other and the senior team. Recognise that both roles – founder and CEO – bring unique strengths, weaknesses, skills, and experience to the table. Respect them because they frequently complement each other.
Listen to their ideas, even when they are opposites to yours, because it helps build a more collaborative working environment. That, in turn, forestalls founder-CEO friction before it even arises.
4. Establish Progress Reports
Another approach to frictionless working is creating processes for regular check-ins. When the founder and the CEO share progress reports on startup goals and address current issues, it keeps misunderstandings and potential conflicts from escalating.
5. Have A Dispute Resolution Process
Concede that conflicts will happen and establish a process to minimise the fallout. Bring in a third-party mediator, if necessary, to facilitate resolution. An outside mediator can help address lingering conflicts fairly.
6. Trust is Key
Trust is the linchpin of frictionless collaboration and teamwork between the founder and CEO. Be confident in the other’s capabilities and believe that their vision for the startup aligns with yours. This is built over time with a mutual sense of purpose and, most importantly, through direct communication.
To preserve trust over the years, have a clear understanding of the startup's vision, mission, and values. They serve as a common ground for the founder and the CEO to cooperate, guide decision-making and align their interests.
Take-Home Message
Problems between a founder and the CEO are inevitable in a startup's growth, but they don't have to be a regular occurrence. The two can work together to drive the startup towards success by keeping the bigger picture as their mission: to create a successful and sustainable business!
At Scalix, we help founders get easy access to community, capital, customers, and convenience to build sustainable and scalable businesses. If you’re a startup struggling with the decision to hire a CEO, our experts can offer their personalised mentorship and guidance.
Contact us today to know more!
