Finance & Operations

The Hardest CEO Decision You’ll Ever Have to Make

June 10, 2014

As your business enters the expansion stage it’s not all sunshine and roses. Brighter days may lie ahead, but as CEO you’ll also have to face your hardest decision to date — when to part ways with early members of the team.

The Hardest CEO Decision to Make | OpenView Labs

As your company begins to scale and enters the expansion stage, there’s certainly cause for celebration. After all, to reach this point, you’ve put in countless hours, a lot of hard work, and it’s finally paying off. Unfortunately, reaching this stage also means that the founding team’s expertise may no longer align with the expertise the company needs to tackle new challenges going forward.
In the video below, UnboundID CEO Steve Shoaff reflects on that difficult transition, and explains why many CEOs may need to prepare themselves for some very difficult decisions.

The Hardest CEO Decision You’ll Ever Make


Congratulations! Your business has grown from just a few people in a room to a more complex entity. That’s a huge achievement, but new challenges are on the horizon.
Shoaff says that for many companies, the transition from the startup to the expansion stage typically marks the time when the your relationships with the people who have been with you from the beginning starts to change. In the video above, Shoaff says that while the people who helped him build UnboundID had become close friends, he knew that many of them didn’t have the skill sets needed to get the company to the next phase in its lifecycle.

The Key Points

Not all people are cut out for all stages of company development. [0:10]
“One of the most eye-opening and painful moments as CEO was actually letting people go that you brought on early,” Shoaff says. “They’re not only people you obviously respect because you brought them to your company in the first place, but they’ve also become your friends.”
Still, Shoaff says CEOs must be able to recognize that when companies reach the expansion stage, it sometimes requires skills or capabilities that not everyone has. And, as the CEO, it’s your job to objectively evaluate whether your founding team has those skills. If some team members don’t, Shoaff says that can lead to a brutal decision.
Letting people go is emotional, but important. [1:10]
Ultimately, if you determine that someone who has been with you from the very beginning doesn’t have the skill set necessary to move forward, it can be gut-wrenching. But Shoaff says CEOs must be willing to let those people go, or they’ll risk undermining their company’s growth.
“Frankly, it’s a pretty emotional thing to deal with as a first-time CEO, but it’s unbelievably important,” Shoaff says. “The people you surround yourself with (in the growth stage) have got to be high quality, high competent experts in the stage you’re entering or going into.”
Read more: For more on how to recruit and build highly-skilled teams capable of managing the expansion-stage, read OpenView’s eBook, “Get More Talent! How to Build the Talent Factory Your Company Needs to Scale.”
 
Photo by: Christopher Griner

CEO & Founder

<strong>Steve Shoaff </strong>is the CEO and founder at <a href="https://www.unboundid.com/">UnboundID</a>, defining the company's vision and overall business strategy. He is also the Chief Product Officer at Ping Identity. Steve is internationally recognized as a trusted adviser on identity and security issues for Global 100 companies. Prior to founding UnboundID, he served as Technical Director and Chief of Staff for the Identity Management product division at Sun Microsystems, and as Senior Product Manager for Directory and Security at Netscape Communications. Steve has also been a key technical adviser to the US Department of Justice.