How to go from owner-operator to CEO (and why you need to)Mar 05, 2021
Most entrepreneurs are the owner-operator of their business.
They’re the face of the company to clients and the person everyone picks up the phone to call whenever a fire needs putting out.
Instead of working in your business, you need to work on it – implementing your long-term vision for your company instead of spending all your time spinning your wheels on the day-to-day.
The question is:
How do you make the transition from owner-operator to CEO without everything falling apart around you?
Setting your vision
The first step in removing yourself from your business’s daily operations is establishing a clear vision for where you want to take your organisation.
Despite this, only a handful of the hundreds of business owners I’ve worked with over the years have had a vision for where they’re going with their business in place before they started working with me.
Most of them had something in their heads, sure. But that would change as soon as they spotted the next shiny object to chase.
Your business is never going to develop from the difficult adolescent phase into a mature business that can thrive without you if you don’t have a clear vision and plan for where it’s going.
So, the first step to transitioning from an owner-operator to a CEO is to create a compelling vision for your company’s future and articulate that to your entire organisation.
Until you do that, you’ll constantly struggle to spend your time in the most effective way and attract the right people to your cause.
But once you’ve got that North Star in place, you can start to plan who and what will get you there.
The power of a vision
One of the best illustrations of the power of a vision is The Founder, the biopic of McDonald’s founder Ray Kroc.
At the ripe old age of 52, Kroc – a struggling salesperson – saw an opportunity to turn two brothers' innovative fast food eatery into the biggest restaurant business in the world.
Once this vision was in place, it guided every single decision the company made.
There’s an incredible scene in the movie where Kroc chalks up a replica of their restaurant on the floor of a playground and – stopwatch in hand – figures out the most efficient way to get a burger out the door with his team.
And this is how McDonald’s managed to get pimply-faced teenagers making perfect burgers in seconds, which is still the foundation of its success.
Look, we’re not all going to create the next McDonald’s. But here’s what we can learn from Kroc’s story:
He had a vision of what he wanted to create, and then he mapped out a plan that stretched all the way back to where he was on day one to make it a reality.
Then every day he worked on turning that vision, which involved getting the right processes in place, hiring the right people, and building the iconic McDonald’s brand.
Without that vision, there’s no way he would have been able to create what is today a multibillion-dollar company.
Owner-independent companies are different from the start
As Kroc’s story shows, mature companies start differently from the rest.
They’re founded on the principle that the most valuable businesses work without the owner’s involvement, not because of it.
If you currently spend your days in the trenches of your business – putting out fires and insisting that every decision goes through you – then you either don’t have a clear enough vision for your company or you don’t have an effective enough plan to make it a reality.
And unless you’ve defined a vision of a business that thrives without you, you won’t have a North Star that will guide what you work on each day, what roles you look to fill, and who you hire.
Your business is always going to rely on you and you’ll be trapped in it.
Knowing what the end looks like
In his book Becoming a Coaching Leader, Daniel Harkavy quotes how Tom Watson, the founder of IBM, explained his company’s phenomenal success:
IBM is what it is today for three special reasons. The first reason is that, at the very beginning, I had a very clear picture of what the company would look like when it was finally done. You might say I had a model in my mind of what it would look like when the dream – my vision – was in place.
The second reason was that once I had that picture, I then asked myself how a company which looked like that would have to act. I then created a picture of how IBM would act when it was finally done.
The third reason IBM has been so successful was that once I had a picture of how IBM would look like when the dream was in place and how such a company would have to act, I then realized that, unless we began to act that way from the very beginning, we would never get there.
If you want to go from a stressed-out owner-operator to the CEO of a company that thrives with you, you need to start thinking like Watson.
Have you got a vision of what you want your business to look like? And do you have a plan in place for how you’re going to make that a reality?
Get this in place and it will serve as your North Star when it comes to what you make your priority each day, how you manage your business, and who you hire.
And this all begins by defining your goal, making a plan to make that a reality, and then articulating that to your team.
How to come up with your vision
Formulating a compelling vision for your business and turning that into an executable plan takes time and requires a lot of consideration.
A great starting point is to pull out pen and paper and ask yourself:
- Where do I want to be?
- When do I want to get there?
- How much capital will that require?
- How many people am I going to need, what are they going to be doing, and how are they going to be doing it?
- What training will they require?
- What technologies are we going to use?
- Where's the business located? Or is it going to be remote?
The answers to these questions are going to form the foundation of your vision.
Of course, the direction that guides your business for the next ten years shouldn’t be made without careful consideration. I dedicate an entire module to coming up with this vision in my business exit formula training and spend significant time working on this with my private clients because it’s one of the most important decisions you’ll ever make for your business.
Rolling with the punches
Now, will your vision for how you’re going to achieve your ten-year goals play out exactly as you’d planned?
You don’t have to look any further than the Coronavirus pandemic to see that’s clearly not going to be the case.
But with your North Star in place, you’ll be able to roll with the punches as they come – whether they’re in the form of a global pandemic, a shakeup in your industry, or mistakes and miscalculations you made at the offset.
Sometimes you’ll be flying blind, but with the North Star of your vision in place, you’ll know the direction you need to be heading.
Bringing things back down to earth
Now, I get it. All this talk about vision can seem like naval-gazing to us entrepreneurs.
So, I’m going to give you a concrete example that’s a bit more down-to-Earth than the likes of McDonald’s and IBM by digging into my own vision.
In the coming decade, there are about 50 million baby boomers that are going to retire. 12 percent of them own businesses, and they're going to exit one way or another – whether that’s through a successful exit strategy or in a casket.
What’s more, only around 20 percent of businesses that go to market actually sell. Yet for most entrepreneurs, our business is our biggest asset. We've put decades of blood, sweat, and tears, and even our relationships into our businesses. Yet the vast majority end up being worthless when it comes down to it.
So my vision is to become the McDonald's of value creation consultancy – to help one million entrepreneurs use systems like the Core Four transform their owner-operated businesses to a business they can sell for a premium.
From that goal I get my target audience: people who want to own valuable businesses that can thrive without them and that come time to exit, they can sell for a significant premium. And that's regardless of where they are along the entrepreneurial journey.
I do it every day and I absolutely love it. And that’s the power of a compelling vision.
And I have a ten-year plan to build a valuable business that runs without me and that I can sell if I so desire.
My plan works backward from that vision, to three years from now, to 12 months from now, to the next quarter.
And it identifies the people I need now and the people I’ll need in the future, whether they are contractors or permanent members of staff.
With this to hand, I have a very clear idea of who I'm going to need, the things that my clients are going to need, the product that I'm building, and how I’m going to differentiate my company.
And I work at that plan every single day to get me to where I want to go.
So even though my business is very small right now compared to where it’s going, I have a very clear plan of where I want to go and what my vision is for the future.
If you're spending your days spinning your wheels and going nowhere fast, I encourage you to take a step back.
If you're trying to figure out how you’re going to go from an owner-operator to a CEO, start with a well-defined vision of what you want the future of your business to look like.
Then work all the way back to the present to create a concrete plan to get you from here to there that you can start working on today.
This might sound basic, but I can't tell you how many entrepreneurs I speak to on a daily basis who don't have a written plan.
And until you have a vision and a plan to achieve it in place, you’re going to seriously struggle to make the transition from an owner-operator to a CEO.
Subscribe to The Freedom Experience podcast for more advice on how to build a valuable business that thrives without you.
And if you’d like help making the transition from owner-operator to CEO, find out how you can work with me.