Doug Wendt is a co-founder and senior partner with Wendt Partners.
For most privately held companies, the CEO's personal vision and leadership is traditionally the core driver for every aspect of the operation. Without a visionary person at the core, most businesses will struggle to scale and achieve their growth potential. But what if new changes or directions are required, or the traditional leadership model isn't working?
The CEO cannot do everything all the time, nor can she be all things to all people every day. In order to achieve sustainable growth and keep the founder's vision intact, an increasing number of companies are finding that the outsourcing model originally pioneered to address back-office and support functions, can also be applied with great success to senior leadership.
Here are six scenarios in which an outsourced CEO or CXO (i.e. a CFO, COO, CIO/CTO, CMO or other C-level position) can make a major impact upon your business results:
1. Key Functions Require Rapid, Dedicated Senior Leadership
As the CEO, you are your company's true 'chief cook and bottle washer' in every way -- and you are certainly an expert in the core functions of your company. But you can't necessarily be an expert in every aspect of business growth. Product engineering is one discipline; strategic marketing is another; finance and accounting, yet a third. An outsourced CXO focused on one or more of these areas can eliminate an area of weakness or concern without complicating the internal leadership processes of the company, and in a quick, results-driven manner.
2. You Need Large-Scale Expertise on a Small-Scale Budget
If you're willing to consider part-time or 'fractional' options, you can essentially rent the expertise of a CEO, CFO or CXO at perhaps half to two-thirds the cost of hiring a full-time employee -- and achieve similar results. This model is most helpful when the CEO would truly benefit from having another C-level partner to help with the business on a less-than-full-time basis, but where she or he needs more support than what a traditional business coach or occasional advisor would provide.
3. Time is Against You in the C-Level Hiring Process
You're ready to hire a new executive to help you take the company forward. But a major change in your marketplace is happening now, a major new project just kicked off, or you're worried about being able to onboard the new person quickly enough. Not to mention, it could take 4-6 months just to build a candidate pool strong enough to identify top performers. In the meantime, you're hyperventilating as you consider the prospect of the business beginning to crumble under the weight of impending changes. You need a C-level player now -- ready to go and dig in. Under these circumstances, hiring an outsourced CEO or CXO can be the ideal solution.
4. It's Your Business, and You're Not Ready to Share It
You've spent years building your company -- years in which you've sacrificed just about everything else in order to achieve your goals. You know that to retain top talent probably means offering an equity stake, releasing control over financials, and generally stepping aside from major aspects of the company in order to make room for the new person.
And yet, you're just not ready. What if the person is the wrong choice and you have to rescue the business after a crisis begins? How can you hand over equity (even a small amount) to someone you barely know? What does this mean for the future of the business, and is this the only way? An outsourced CEO or CXO is an expert advisor who can step in and play an active leadership role -- if needed, for a long time -- but he or she reports to you. You retain ownership of your business, even while you gain the expertise and leadership support you need to move forward.
5. You're Ready to Hire a Senior Executive, But Maybe Not to Keep One
It's time -- and you're ready. You need to make room for a new leader on the team, and you're willing to give them the compensation, equity, authority and support they need. But then again, you've tried this before and…it hasn't always worked out. After all, you're an entrepreneur -- demanding, exacting, intense. The last person you hired in a leadership role perhaps wasn't a great fit to begin with, but then again you can be difficult to work with.
Are you really ready to make sure that your new C-level hire actually decides to stay on for the long haul? How do you go from hiring to actually retaining a new full-time leader? In this scenario, an interim investment in an outsourced CEO or CXO for 3-6 months can be an invaluable step because this person can serve as an active leader while also coaching and advising you on the changes that need to be made before bringing on a permanent hire. The outsourced CEO is responsible for getting the job done, but is a contractual resource, not an employee -- which reduces tension and gives both of you a more objective business relationship upon which to prepare for the future.
6. You're Burned Out, You're in Conflict or the Business is Rudderless
The company has taken every ounce of energy and enthusiasm out of you. You love the company, of course, and are proud of what you've built -- but on a personal level you are simply exhausted. The toll that entrepreneurship has taken on you is intense, and you're ready to just throw in the towel -- not on the business itself, but on your day-to-day role in it. Or maybe you want the business to continue but your family member or business associate who is a fellow partner feels differently, and the conflict is becoming explosive. Or perhaps you're putting in the hours every day but you feel like the excitement is gone, and your lack of direction is causing confusion within the company.
In short, you're burned out -- or your business is drifting and is at risk of becoming lost for lack of decisive direction. In this situation, an outsourced CEO can bring that energy and fresh insight back to the company -- enabling you to take a much-needed break from the stress, and hand over the reigns to someone who can keep the lights on and find new directions that align with your vision, without you having to do it all personally. If you decide later to re-enter, the outsourced CEO is ready to make that happen…if you decide to step aside for the long term, she or he can help you achieve a successful transition as well.
Building a business is one of the most difficult tasks anyone can pursue. It takes relentless commitment, constant energy and seemingly endless resilience. You're an entrepreneur, yes, but you're also a human being. Whether you're looking for expertise on tap, part-time leadership, transition assistance or a crisis intervention -- partnering with an outsourced CEO or CXO can bring invaluable assistance and impact to your business.
Image Credit: Flickr @ Creative Commons