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Inc magazine; March 2003

Do I Still Have The Right Stuff?

A company founder wonders whether the time has come to fire himself.

In six years, my business has grown from a start-up launched in a spare bedroom into a 300-person insurance company with $20 million in sales. When we were small, my gunslinging, play-it-as-you-go CEO style worked fine. But today the issues I face are more complicated, and sometimes I wonder if I’m still the right guy to be at the helm. What can I do to evaluate whether I’m doing a good job as CEO?

--Tim Fargo, Omega Insurance Services, St. Petersburg, FL

You’re not the first entrepreneur to discover that managing a large company is less like waging a gunfight than mounting a major military operation. The challenge is how to transform yourself from gunslinger to general.

With 300 employees, your company clearly is too complex to communicate everything through casual conversations in the hallways, says Dick Strayer, a Los Gatos, Calif., consultant who has advised growth companies for 21 years. You need to created a formal strategic-planning process with regular departmental meetings and routine status check-ups to ensure managers are meeting their goals.

None of this is easy – especially for a self described gunslinger. Enlist a trusted adviser to help you set priorities and evaluate your performance. Ideally, this person should be a CEO who has traversed the same stage of a company’s life cycle. And the adviser’s primary loyalty must be to you. “You want someone who will see all of your warts but wont use them against you, not someone who has another agenda – such as a major investor,” Strayer says.

Working with your advisor, talk to managers, customers, and board members to identify your company’s main challenges. Then, on a quarterly basis, have your adviser reinterview the same people. Are they frustrated? Do they have problems making or implementing decisions? Do your employees lack faith in your company’s business plan?

If, after about six months, you continue to get affirmative answers to these questions, it may be time to bring in a strong chief financial officer – or replace yourself as CEO. That’s okay. Not every entrepreneur is cut out to run a large operation. Handing the reins to a more experienced manager may present an opportunity to dust off your six-shooter and find the next gunfight on the frontier.

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