Managing co-founders as you scale – Mark MacLeod

April 13, 2023 - Mark MacLeod

Managing co-founders as you scale

In most of my discussions with CEOs we end up talking about their leadership team. CEOs succeed through their leaders and so the strength of those leaders = the impact of the CEO.

Naturally, that leadership team includes one or more co-founders. And more often than not, some co-founders are not keeping up and don’t meet the same bar as the other members of the leadership team.

It is hard to keep growing faster than your company year after year. For any leader (founder or otherwise), is is what is needed in order to stay relevant (or as Tobi Lutke, CEO of Shopify says “re-qualify for my job”).

As CEO, for better or worse, you have the most motivation, context, input (whether you want or not) and access to advisors, mentors, etc. This is why among co-founders, we often see CEOs scaling faster than their companies but co-founders in other roles struggling to keep up.

I suggest a few things in this all too common scenario.

First, treat your co-founders the same as your other leaders. Hold them to the same standard of excellence. You can’t have multiple performance standards inside your team (or it will cease to be a team and become a group of cliques).

Second, have the difficult conversations early (and often). Many CEOs know their co-founders can’t keep up, but they won’t discuss it. It is the elephant in the room. The co-founder feels it as well. Especially if she is sitting in the same meetings as your A+ leaders. She feels the gap.

This often manifests in frustration all around. The team members that report to said co-founder feel it as well. Good is the enemy of great!

There is so much at stake here! You have the expectations of your customers, staff, investors, etc on your shoulders. You can’t compromise here. You have to be able to openly discuss co-founder performance and manage it the same way as you do for all your leaders.

In my experience, this becomes easier when you separate executive roles from founder roles. As co-founders, you wear both hats. But you should only wear one of these hats each time you meet.

When your co-founder is part of a leadership meeting, then they are simply the leader of their individual function. Everyone in that meeting is the same. There is no special founder status.

Separately, I recommend that co-founders meet frequently (quarterly is probably good) to discuss issues that are specific to them as founders and owners. These are issues outside of day-to-day performance. Typical topics include runway, whether / when to consider an exit, preserving culture, etc.

Back when I was a VC, one of my companies, Unbounce, did a great job with this. They were a large founder group (six at one point). They met regularly for dinner, outside of their working roles. While some founders moved on over time, what I witnessed was a co-founder group that genuinely liked and respected each other. Not coincidentally, Unbounce’s culture is second to none and a core strategic advantage. They had the difficult conversations openly and with compassion.

If you are struggling with these issues in your company, give these suggestions a try.

Photo by Austin Distel on Unsplash

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