Latest / The Start, Scale & Succeed Podcast / Should You Really Step Down or Sell with Scott Ritzheimer (stages 5,6) - Ep. 415

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Should You Really Step Down or Sell with Scott Ritzheimer (stages 5,6) - Ep. 415 · The Start, Scale & Succeed Podcast

• 0:00
  Scott Ritzheimer: Hello, hello, and welcome, welcome once again
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  to the Start, Scale, and Succeed podcast-the only podcast that
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  grows with you through all seven levels of your journey as a
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  founder. I'm your host Scott Ritzheimer, and today we are
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  going to take on the fantasy that pulls founders out of their
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  seat as CEO or CVO too early, and it's this idea, this belief
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  that real freedom means owning and not running. And for some,
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  that's true. For some, it's time, and that means going from
• 0:39
  level five to level six, and it's going to be beautiful, but
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  for many, that's just not the case. And we need to figure out
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  what the difference is between the two, and that's what we're
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  going to talk about today. Because before you step out,
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  before you step down, before you bring in someone else to take
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  over as CEO or leader of your organization. Organization, you
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  need to make sure that you're doing it because of your vision.
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  Otherwise, you'll end up stepping out, and like plenty of
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  other founders, finding very quickly that you want back in.
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  And boy, can that get ugly! That can hurt a lot for you and
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  others, and we don't want to do that. So, how do we know if it's
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  time to step down? Should you really step down as CEO? Well,
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  if you listen to the previous episode, you'll know one: this
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  is part of a series, and and so you're probably up to date
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  there. If you haven't, and you haven't checked out the first
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  part of this series, you're gonna want to go back and do
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  that. So head down to the show notes and go back to just just
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  episode one of this series, this should you really series, and
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  you'll get a lot of context for what we're talking about here.
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  And when we say things like level five and level six, you'll
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  know what we're talking about. You don't have to watch
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  everything between here and there, so it's not like you have
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  to watch nine episodes. You just go back and watch that one, come
• 2:06
  back to this. It'll make a ton of sense. So that's the
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  disclaimer. However, if you did happen to watch the previous
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  episode, which some of you might have, or or listen to it, then
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  you'll know that you'll know my two criteria for whether or not
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  a founder should be CEO of their organization, and those criteria
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  are: one, you have a compelling vision for a better future for
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  your organization. You know where this thing can go, and and
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  that's not inherently true. When you look at folks who are who
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  are leaving their time as as as CEO, they struggle with this.
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  They technology is changing, the industry is changing, and
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  usually for reason number two, which we'll get to in a second,
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  they they just don't see it like they used to. Maybe the the the
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  the challenges of change in the past are getting in the way, or
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  they're just reaching a season as a leader where they've got
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  other things that they want to do, or they they just don't have
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  the energy to pursue it anymore, which is number two, and that
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  is, even if you have a clear vision, you also have to have
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  the energy to do it because this is what a lot of people get
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  wrong about the CEO role. The CEO role is not an own and not
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  run role. The CEO role is a running your organization role.
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  Now it's not managing every single detail. It's leading the
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  executive team, but that's a full time job. It's not even
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  necessarily busy in the busy season. You might be busy in the
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  off season, like GMs are in sports, you might have a
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  different flow, a different schedule, but it's it's a full
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  time job to be a good CEO or chief visionary officer (CVO)
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  for your organization, and that takes a lot of energy. And for a
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  lot of founders who are who'd be listening to this, where this
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  episode applies to them. Let me just say this: this episode
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  applies to founders who are in level five. So that means you
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  already are acting as CEO. What does that mean? It doesn't mean
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  that your business card says CEO.
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  It means that you have other at least one other executive on
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  your leadership team, and you are the chief executive. It
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  means that you have an organization that's big enough
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  to require at least two executives, which is generally
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  going to be somewhere north of 50, and could be up to 1000s.
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  And so it's a big range, but the game is largely the same in that
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  window from a personal standpoint. Point so we're
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  talking about chief executives who have other executives
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  working for them and need other executives because of the size
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  and complexity of their business or nonprofit. We're not talking
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  about disillusioned leaders who just want out because they're
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  tired and they think they're the problem in the organization. We
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  talked about that and it can feel very similar. So, if you're
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  wondering, hey, is this quite a fit, or maybe I don't quite have
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  50 people in the organization, or maybe I'm right at that line,
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  but I'm not quite sure, go back and listen to the episode before
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  this one, and you might find some more answers there. Because
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  this episode that we're talking about right now is really only
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  relevant for those who've gotten past the previous episode,
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  chosen to go past, I should say. And so, what we're talking about
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  are folks who are in the CEO seat. They've been in the CEO
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  seat for a while, usually 510, maybe 20 years, and they're now
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  starting to question what's next, what what comes after
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  this, and they're thinking about an exit. I hear this all the
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  time. I don't want to be doing this when I'm 65 I don't want to
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  be doing this when I'm 70. I don't want to be doing this when
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  I'm 85 Doesn't matter what the number is. It just matters that
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  you don't want to be doing it anymore, and and that's helpful.
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  That's usually where this internal conversation starts,
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  but a really bad reason to leave being in an organization's CEO
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  seat is because you're trying to get away from something, and so
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  the fundamental question here as to whether or not you should
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  step back is less to do with are you tired of what you're doing,
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  even though that's a big part of it. We've already talked about
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  it, but it's actually secondary to what are you going to do
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  next? Because if you're really tired, and so you leave the CEO
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  seat because you're really tired, but you never actually
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  decide what you're going to. You don't actually have a vision for
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  what you're going to do next, and it's not golf gallivanting
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  and grandkids. Like there's a time for that. You'll enjoy
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  that, but that's not a purpose. That's a that's leisure, and and
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  so what has to happen here is you're deciding should I be CEO
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  should I step down you have to decide not should I step down
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  but what am I stepping into you've got to have a vision for
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  the next level you've got to have a vision for level six and
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  the difference between level five and level six is you step
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  from owning and running the business in a kind of singular
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  focus in level five to owning but not running a portfolio,
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  where you might have your business as part of that
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  portfolio, you might sell it, you might have real estate as
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  part of the portfolio, or other businesses as part of the
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  portfolio, or stocks and bonds, or whatever else, NFTs. Does
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  anyone do NFTs now? But where you're not like a day trade
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  investor, but you're a portfolio owner, where your income is not
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  tied to your hours, it's tied to your return on assets. That's
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  what level six looks like. We're not running a bunch of
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  businesses; we're owning a bunch of businesses potentially, and
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  that's actually a really cool place to be when you're ready
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  for that. When the vision that you have can't actually be
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  satisfied by one organization, and or you don't have the energy
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  to to keep this going, and and that's what's going to give you
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  the best step into level six. So before you think about stepping
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  down, what you really want to think about is what you're
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  stepping into, and so let's unpack these two options: either
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  you know stepping down and out, or stepping up and continuing to
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  thrive in level five. Let's start there.
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  Reasons why level five might be the right level for you. One,
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  we've already talked about the prerequisites, but again, this
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  is not like a brand new startup. This is a an established
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  organization, brand new and established, make it sound
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  chronological, which isn't necessarily true. This is a a
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  complex, scaled organization. It needs executives. It needs a
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  competent visionary at the helm. And so, if if you're cool with
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  that, if you're ready to lead a an executive team, if you are
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  ready to entrust them with making decisions with you and
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  for you, as opposed to executing your decisions for you, the way
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  that I like to think about this is this. CEO, especially once
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  they they really transform into the CVO, the Chief Visionary
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  Officer, which is which is a better fit for most founders.
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  CVO is responsible for a couple of things: one, having that
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  vision and the energy to pursue it; two, building the team that
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  can make progress toward that vision. Three, resourcing them
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  effectively and holding them accountable to how they use
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  those resources. And what that looks like in a practical sense
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  is, as CVO, as chief executive, you are largely concerned with
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  doing the things this year that are necessary for next year's
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  success, or the year after that, or 20 years after that, it's a
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  very future-focused role, and so you're working hard in the
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  current, in the present, but not so that you can hit this year's
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  revenue target, that's your executive team's job. Your
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  executive team's job is to hit this year's revenue target, to
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  hit this year's production targets, to hit this year's
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  profit targets. If you have a CEO that works for you, it's
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  their job. If you have a COO, it's their job. If you have an
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  executive team, it's their jobs to to manage all those things.
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  Your job is to make their job of doing all those things next year
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  easier by what you focus on this year, by what you help develop,
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  by how you provoke them to innovate, and how you prepare
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  them for change. And so, if you're ready to focus on next
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  year stuff and you have the energy to do that. That's
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  fantastic. If you can trust your team with leading this year,
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  that's fantastic. If you have a, if you have the ability to
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  attract and retain, to coach, to to coordinate, and I said this
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  earlier, but it's worth repeating. And hold accountable
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  your team of executives. So being CEO really is about how
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  well you lead your executives, and that starts before they
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  start. If you're a really crappy CEO, then great executives
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  aren't going to come and want to work for you, or even if they
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  do, they're going to leave pretty quickly after. So you've
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  got to you've got to attract and retain, and be able to coach and
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  encourage and hold accountable the people who are going to lead
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  your organization to your vision. That's that's really
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  what we're talking about here, you in level five, you have to
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  have the discipline to do what needs to be done for the future
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  of the organization, even though it's not urgent. This is a real
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  challenge for folks that are used to being driven by the
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  urgency of earlier levels. You have to be able to recognize
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  what is important. You have to be able to prioritize in order
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  of importance and not urgency, and you need to be able to self
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  motivate you and motivate your team to do the important things
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  despite all the urgent stuff that you're feeling, or the
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  boredom that you might feel from time to time, and you need to be
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  willing to do all that full time. And so, really, so long as
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  you have that vision and you have the energy to pursue it,
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  and you're willing to develop the skills to see that out, you
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  should stay in that level five seat for as long as you can. Now
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  that doesn't mean that you just assume that you'll be there
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  forever. In fact, the a a a sound move from level five to
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  level six is usually about a three, four, or five year
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  process. It doesn't happen overnight because it takes time
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  to develop the next leader who's going to take over after you,
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  and so you want to stay in that level five.
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  Even if you want to get to level six, you want to stay in level
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  five for as long as you can, so that you can give yourself time
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  to intentionally make progress toward the conditions that are
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  required for a successful move to level six. What are those?
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  You have to. Here's the. I call it the secret of succession, but
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  succession is not about finding someone else to fulfill your
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  vision for the organization. It's about finding someone else
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  that you trust with the vision of the organization, someone you
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  trust to change it, and it's that person that's going to
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  really lead the organization forward, instead of it slowly
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  dying once you're gone. And so you need some time to create
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  that. And if you have that person and you know what you
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  want to go to next, you're an ideal candidate for level six.
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  If. You again have a vision, but it's bigger than what your
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  organization can accomplish, or different from what your
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  organization can accomplish. And you're ready to give that your
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  best energy, then that's a great indication that you might be
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  ready for level six. If you're willing to trade the control of
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  having your hands ultimately on the wheel to the better but
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  harder way to lead by influence, then you might have matured to
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  the point that level six is going to work really well. If
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  you would rather invest in others' dreams than chase your
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  own, right? If you'd rather leverage other people's not just
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  time-you've been doing that for a long time with your
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  employees-but to leverage others' vision, then you you
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  might be ready for level six. If you would rather if you'd rather
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  see someone else's vision come to pass, is what I'm trying to
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  say here. And so, the again, this is this isn't simple. I'm
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  not I'm not trying to oversimplify this for you, but
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  the reality of it is, is you you you need to start with, what
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  does your vision demand? Because your vision is either going to
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  demand that you you really double down and go all in on
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  leading your organization, and in that time finding a great
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  successor to lead it beyond what you can do, or your vision will
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  compel you to jump fully into something else. Now, when I say
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  fully in, fully in in level six does look different. Level six
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  is not a full time job for most people. In it's usually
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  somewhere in the ballpark of 20 to 30 hours. But what level six
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  is is it's highly intentional, and it also requires a great
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  degree of discipline. So, if you have those things, you're ready.
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  You're ready to step down, not because you're running from
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  something, but you're running to something. Then you're likely
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  going to be a great candidate for level six. So that's it.
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  That's how you choose. Do you have a vision for the
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  organization? Do you have the energy to pursue it? If not,
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  then do you have a vision for what's next? If not, then you
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  need to start working on that, and you need to start working on
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  a successor who can take over after you. And as you get those
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  pieces to fall into place, it's going to unlock the ability for
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  you to step out of level five as that chief executive and into
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  level six as the true owner, where you don't have to focus on
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  one organization anymore, but you can shift your focus to
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  many, and it's an immensely rewarding and satisfying season.
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  So that's it. It's the difference between level five
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  CEO, level six owner, and what we're going to talk about next
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  time is a an even blurrier line, if I'm completely frank, but an
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  even more meaningful one, and that is that owner is not the
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  pinnacle. Owner is probably what you've been fighting for for
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  most of your careers, probably as far as your vision has gone
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  to date. But there's actually one step further that you can
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  take if it's right for you. We'll talk about what that is in
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  the next episode and whether or not it's right for you. And
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  until then, know that your time and attention mean the world to
• 18:28
  us. I hope you got just a little bit more clarity out of this
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  conversation than you had before. And I cannot wait to see
• 18:35
  you in that next episode. Take care.
• 18:42
  Hey everyone, Scotty Timer here. Thank you so much for listening
• 18:45
  to the Start, Scale, and Succeed podcast. I hope this episode
• 18:48
  gave you exactly what you need for the level you're in right
• 18:52
  now. If you want to discover what level you're in, take our
• 18:55
  10 question Founders Evolution Quiz for free at
• 18:59
  foundersquiz.com. That's foundersquiz.com. It'll pinpoint
• 19:03
  exactly where you are and give you tailored tips to move
• 19:07
  forward and reach that next level in your journey as a
• 19:10
  founder. If you got something out of today's episode, don't
• 19:13
  forget to subscribe, rate, or review. It helps us reach more
• 19:17
  founders like you, and let's be honest, it means a ton to me, my
• 19:21
  team, and all our incredible guests. So keep starting,
• 19:24
  scaling, and succeeding, and I'll see you in the next
• 19:28
  episode.