Hitting the Leadership Ceiling – A Note To Founders & Entrepreneurs

The Leadership Ceiling

Every Founder that starts something new will eventually hit their leadership ceiling regardless of the organization type (for-profit, nonprofit, or any other leadership initiative). Everyone eventually gets to a place where they feel like they aren’t growing. They may feel stagnant in their leadership, like they’ve hit a ceiling that is impossible to break through.  Having launched and led new ventures across multiple industries throughout my career, I can usually get a pretty strong read in the first meeting with someone as to whether or not they have hit their leadership ceiling.

I have succeeded in many ventures, and I have also completely failed in some ventures.  Looking back at my failures, it usually was because I had hit my own leadership ceiling and I was too proud to change course or seek better counsel for where my company was at in its growth stage.

Here are the top 3 signs that a Founder may have hit their leadership ceiling:

1. The Founder no longer understand the financials of their organization.

The company may or may not be experiencing financial pain. If a founder can’t explain to me in detail their financial situation and how that ties into their organizational strategy for growth, then they have hit a ceiling. Not only that, but they probably don’t have the right team around them managing the finances.

Often in high growth companies, if I request financials for a company. If they cannot easily prepare and distribute what is needed, then this tells me that there is a problem.  If a founder can’t provide good data to outside parties in a timely manner, then he or she is not managing that data well internally.

Proper financial management is an ongoing daily and weekly task, and is always highly important. The higher the growth that a company is experiencing, the higher the importance of sophisticated financial management.  The most dangerous risk for any growth stage company or organization is running out of cash. This is a sure way to kill a company.

All founders and companies are taking financial risks at many levels, but you must have the right team around you to manage these risks, and understand how each risk plays out in real time. The right team members that are needed to manage and assess financial status and risk will change as you grow. A Founder should periodically reassess those positions to get the right team member on board for where their company currently is and where it will be in the future.

2. The Founder feels in their gut that they are out over their head.  

This can often be a very difficult thing to assess for a Founder. Founders typically have a high risk tolerance and are pioneering new frontiers with their business. This personality trait is a great strength that is needed to get a company off the ground. But often, they can feel that they have gotten into a situation that didn’t work out as they expected. They don’t know what to do. They may not see a clear path to righting the ship. The only Founders who I have seen survive a situation like this are the ones who seek counsel. These Founders go out to get some other trusted parties looking at the full scope of their company and operations.  They don’t ignore their feelings, and aren’t too proud to get other people involved.

 

3. The Founder’s team is no longer functioning well together.  

As the Founder and leader of the organization, the team is their responsibility. If the team is not functioning well, then it is nobody’s fault but the Founder’s. If they have the wrong people in play, then they need to get rid of them as quickly as possible.  No team is perfect or functions perfectly, but if they keep running to the same issues with the team, then they have to figure out a solution and take action.

 

Usually proper team function simply comes down to getting the right people to understand their role and responsibilities, and to make sure that they know that their contribution matters to the greater good of the organization.  A team certainly cannot function above the Founder’s leadership ceiling. Team function-by definition-will never be able to rise above the limiting factors of its leader. Therefore, if a Founder has a leadership ceiling that is limiting their team, then the team will be unable to function to the extent that the Founder desires due to their own limiting factors.

It’s easy to write this in a blog post, but much harder to work through if a Founder’s team is not optimized. This should be a top, urgent priority to get fixed. If they don’t have the right team members and the right structure in place for your team to excel – they will never be successful. The Founder may have the best product, service, vision, or strategy in the world, but it will never be commercially successful.

 Great teams create great results with average products or services.  Average teams create average results with great products or services.

There’s Good News!

If you are reading this right now, and you feel like you may have hit your leadership ceiling, then don’t worry just yet.  The good news is that you can change your situation. Give yourself an honest assessment of where your company really is today. Seek wise counsel from mentors who have more life and business experience than you do. Do whatever it takes to diagnose your problems, and create solutions that can work.

All companies have growing pains, but don’t let your leadership ceiling keep you and your company from where you know you should go.

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