Should the CEO of a business be one of its founding partners?

Entrepreneurships are newly born businesses that require steering of the best people, or in other word from people that have the better-suited traits in order to lead it to success. Normally when an entrepreneur decides to start a new business he does it thinking that he is this person that should steer the new company. However a question is brought in this point, that every entrepreneur should ask himself ¿Should the CEO be one of the founding partners of the enterprise? In this article I will explore the answer to this question.

In the first months and maybe years of the project maybe the answer to this question is “yes”. The reason –without taking into account the traits that the entrepreneur has or doesn’t have- normally is bounded to the financial resources of the business on its firs years. At the beginning of the project when the entrepreneurs are struggling in order to acquire resources it will be easier if one of its founder partners becomes its CEO, because he is not expecting a high wage in exchange for his job. This does not means that his job shouldn’t be paid, however if someone that is not part of the business is hired for this job he must be compensated as any employee with an excellent wage and all its legal benefits. The problem is that at this point the business cannot pay anyone for this job.

That is the reason why I think that the answer at the beginning is that the CEO must be one of its founding partner, but the answer to this question might change as time passes by. Once the company has the required financial resources, this question must be asked again, and the partners should evaluate who is the ideal person for this position. Taking into account that in this moment the financial resources are not limiting this decision the partners should take into account the short-term, mid-term and long-term objectives in order to decide if one of the partners should guide the business or if there is someone better out there in order to steer the company.

The same CEO must be neutral when they are deciding who is the best person for this position, and be thinking in what is better for the company. He must understand that if they decide that out there is a better suited person it does not means that he does not have managerial qualities, but that in this historic moment the business needs someone different in order to obtain the business objectives.

Thereby it is important that the founding partners of the company do not get in love with the positions of power, and that they must always think what is better for the company. In this way it is going to be easier to make changes when the company requires them. They must understand that even if they are not employees of the company they are still partners of it.

As en example, we see cases such as eBay or Google where an external CEO was hired in the first years of the company. In contrast to this Amazon CEO is one of its founding partners. Remember this decision should be linked to the company’s objectives and the ideal person to execute them.

Image taken from Flickr.com

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