Firing the boss
There’s been a rash of high profile departures by top dogs at the nation’s largest corporations.
No one is immune. Take the once celebrated Merrill Lynch CEO Stan O’Neal. He was pushed out of his job because he made a host or risky moves that led to big losses at the firm.
It got me thinking about small business owners and how they decide when it’s time to hand over the reins. It happens folks. A company gets too big, or the owner just can’t handle day to day operations because of personal issues.
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| Joe Raedle / Getty Images |
| Former Merrill Lynch CEO Stan O'Neal |
I’ve interviewed quite a few entrepreneurs over the years and there have been some, well a very small few, who admit they probably ran their companies into the ground.
Let’s face it, there are typically no board of directors or Wall Street analysts to kick them out the door.
The failure rate among small business owners is pretty high. After two years, about 34 percent of new businesses with at least one employee fail, and after four years that number jumps to 56 percent, according to the Office of Advocacy, U.S. Small Business Administration.
Big egos probably keep many owners from knowing when it’s time to quit running the show, or time to get some help.
How do you come to terms with reality?
It’s not every day someone admits to being a failure.
But Micah Baldwin is pretty candid about his failings as a small business CEO.
He left a staff job and started an internet consulting company called Current Wisdom in 1999, but he ended up realizing he wasn’t CEO material.
The wheeling and dealing part -- he loved that.
“While initially, I thought I was a great leader and could be the CEO of a small biz, doing a couple of million in revenue, it turns out that everything I thought a CEO was, was not what a CEO was. And those things, understanding structure and organization, were not my strong suits.”
Earlier this year, Baldwin sold the company. “I decided that I didn't want to be CEO.”
So, how do you know when to relinquish your crown and scepter?
Steve Maxwell with Kodiak Venture Partners offers some warning signs:
* If the founder finds themselves unable to allow others to drive decisions.
* Are constantly questioning the choices of their team.
* Or feel they must be involved in every decision being made in the business.
“If any of these flags are raised then it’s time to re-evaluate whether or not they should continue running the business,” he says. “A good leader will empower others, delegate responsibilities, and accept the choices made by their team. There is a delicate line between a ‘hands-on, involved CEO’ and a ‘founder who won’t let go.’”
I know, your business is like your baby. But at some point we’ve all got to push junior off our laps or risk being crushed.
