In my work with founders, I am continually reminded of the incredible power of passion when leading a business.
Passion is the primary source of fuel for founders. It’s what gets them through setback after setback in the early days. It keeps their unwarranted optimism afloat long enough for it to become warranted.
- Should you exit? If you do, what will happen to this company you’ve built?
- Should you step back and let someone else take the reins? If so, are you really ready or even able to put that much control in someone else’s hands?
- Should you stick with it? Many founders do but then find themselves trapped and lifeless like a sailboat with no wind.
This is one of those scenarios that feels like there are no good options. In a scenario where you are forced to pick the least worst option, we are all but guaranteed to choose the worst option: to give up the power to decide.
We end up feeling forced into something of someone else’s choosing. No one likes to feel this way, but this is especially challenging for business owners. You chose to start this business in part because of the freedom and autonomy it would provide. Now all these years later, you find yourself in a trap of your own making.
Fortunately, there is a way out. In fact, there are multiple ways out. I’m going to share with you three of the primary reasons founders lose their passion, and we’ll look at all three options: stay, sell, or step back.
This time of year, many of us look back on the previous year and look ahead to the next year. When you do, I think the following points will prove to be incredibly helpful for you.
You’ve been at it for a long time
Most people looking in from the outside just can’t see the toll that starting, growing, and leading a business takes on the founder. Everything pulls on the founder, from the sacrifice of time, energy, money, and sleep in those early days to the complexity and scale of leading a larger enterprise and making decisions with so much on the line. It’s not easy. In fact, without a break, it’s exhausting.
When you add to that the element of time, it’s easy to see how boredom and even burnout can set in.
As the founder, you’ve been with the business since before it started. The vision may be brand new to your most recent hire, but you’ve had to work at keeping it fresh for a decade or maybe even more.
It’s easy for that vision that was once all you needed to get up at 5:00 a.m. to start the day to now feel more like an albatross around your neck.
What do you do? If you’ve lost your passion over the years, should you sell, step back, or stay?
For many, this is their first option. The challenge with selling is that founders generally find themselves unprepared to sell.
First, the company is still highly dependent on them because they’ve not built the business systems that are necessary to succeed at this scale. A knowledgeable buyer will recognize this and either lower their offer or maybe even walk away.
Second, and maybe even more critical, the founder isn’t prepared for their next adventure. It can be tough to “start over” later in life, and if you can’t get a high enough price to retire and live the life you want, you need to have a clear picture of what you will do next. I’m going to come back to this in just a moment.
To step back
If you can’t get the right price for your company, you may consider stepping back and letting someone else run the day-to-day. The challenge here is two-fold.
First, you will need to give far more control for this to work than you probably think is required. If you don’t, a great CEO (or president, or whatever you call them) won’t hang around for long. They’ll either move on or worse; they’ll become a competitor. If they aren’t great, well, we can all see how that will end.
Second, and more importantly, this typically doesn’t solve the passion issue. When you look for someone to run the day-to-day, you hire a caretaker, not a Visionary. At best, all they can do manage what you have already built, and that generally leads to a long, slow slide into irrelevancy. For the business to continue to grow, you need someone in the company with the same degree of passion and vision for the business you once had.
To stay in the business often feels like a last resort for a founder, but it may very well be your best option for two reasons.
First, you can get serious about exit planning and stay long enough to sell the business at a premium. If so, you’ll find a new passion for the transaction, and that new spark could be just what you need to pull through.
Second, you can take a step back and rekindle your passion. I’d be willing to bet that, while the business has likely far exceeded your earliest expectations, if you’re honest, you can trace much of the loss of passion back to unmet expectations. I believe that this is an incredibly valuable asset. It is the distinct advantage held by founders over professional managers.
If this is the situation you find yourself in, use it to cast a new vision for the next ten years. You have way more resources and momentum than you did ten years ago. Imagine what you can achieve if you rekindle that vision.
So the question of whether to sell, to step back, or to stay ultimately comes down to whether you can rekindle a vision that ignites your passion. If so, your best bet is to stay, and your best years are on their way.
If not, handing off the day-to-day is okay, but know that it will likely result in a managed decline. The better bet is likely to sell, and if that is the case, the only real issue to work out is the timing.
The business isn’t like it was before
I hear founders say this quite often. The truth is businesses change over time, and they should. It’s not unlike a mother who wants her baby to stay a baby. It’s understandable but unnatural.
Babies are cute. Brand new businesses are exciting. But both need to grow up to accomplish something great.Babies are cute. Brand new businesses are exciting. But both need to grow up to accomplish something great. Click To Tweet
The primary difference between business and babies (at least in the context of this article) is that babies grow up, reach their prime, and then decline all within about 80 years. You may be able to push it to 100, but the laws of nature don’t change.
For business, many come and go in months or a few years, but others can live on for generations. While companies can age and die, they don’t have to, certainly not in your lifetime. In theory, you can keep a business not only alive but in its prime for as long as you’d like.
But even in its prime, your company won’t feel like it did on day one or year three, and the goal is not to go back to that time. Instead, it is to get it to its peak and keep it there, which means you have a decision to make.
Here’s how this shakes out for you as a founder.
The best time to sell is when the business is at its peak. We call this stage of business Predictable Success. The problem is, because things are good in Predictable Success, no one wants to sell there. Instead, I find most founders want to sell in one of the challenging stages on either side of Predictable Success. They are Whitewater and Treadmill (You can click on the links to learn more about these stages, and you’ll quickly understand why a founder would want to leave. Basically, they are not fun times at all).
To step back
This one is tricky. Hiring a professional CEO or handing over day-to-day operations could potentially get you out of Whitewater (a good thing). Still, it is also likely to accelerate your transition all the way into Treadmill (not a good thing). As a founder, you will likely have more work to do for a longer time getting back out of Treadmill than you would have by sticking with it and leading the company through Whitewater.
Alternatively, hiring a professional CEO could work well and afford you the lifestyle you want if you are willing to pull back on the growth and let him or her manage a smaller, less complicated organization in the Fun stage.
It all boils down to this–While a professional CEO is a good idea for managing what you have, it is not the best route to building a greater organization.
The first reason to stay has to do with understanding the Predictable Success Model. This allows you to identify where your business is in the lifecycle and what your business needs to succeed.
If you are trying to sell or step back to get out of Whitewater or Treadmill, chances are it won’t go well, or you won’t get the premium you could get with the right strategy.
I know this section may sound a bit academic, but the reason I need to lay it all out for you this way is I see founders internally misdiagnose their company’s lifecycle stage all the time. They think Whitewater or Treadmill is Death Rattle, and that’s simply not the case. They also misdiagnose the cause, the thing that got them into this uncomfortable stage, and they lose their vision simply because they don’t know how to win anymore (more on this in a moment).
To stay, you must find a vision and rekindle your passion. I’ve seen this happen so often for founders who do nothing else but recognize what stage they are in and choose the right strategy to take their business into Predictable Success.
You have hit a lid and feel like you are holding back your business
This is one of the biggest passion killers, and I believe it is the hardest to overcome alone. There are only two reasons why a founder would feel this way. First, the founder is the lid. Second, and far more likely, the founder is acting like a lid. While they may sound similar, the difference between the two is dramatic.
If you are the lid for your business, there is nowhere to go but down from here. You are maxed out. This is as good as it gets. You should sell as quickly as possible. You’ve had a good run, and now it’s time to move on.
If you are acting like the lid, this is likely the worst time to sell your business. Again, you’ll only get a fraction of what the company is worth. What breaks my heart even more is that you will likely permanently stunt the organization’s growth by selling. It won’t have you and your passion at the helm, and, in a way, everyone loses.
To step back
If you are the lid, then hiring a professional CEO only has about a 50% chance of succeeding at best. The reason is, at the end of the day, you are still in charge, and you are still the lid. This will frustrate a great CEO and limit the effectiveness of the rest.
If you are acting like the lid, there is actually an opportunity here, but it’s not what you think. You could benefit greatly from bringing on a strong #2, but two other things need to happen. You need to stay plugged in. You can shed some responsibilities, but you need to keep the vision, mission, culture, and creativity at your team’s forefront. And that is the second part. You can’t stop with a #2. You need to build a leadership team (more on that here: Who do you need on your team? and here: 5 Ways to take your team to the next level). When you bring the support and skills you lack into your inner-circle, your decision-making process, you can take the small step back you need while your business takes a considerable step forward.
Honesty time. You are the lid and always have been. The only thing that has changed is that you feel and recognize it. With that being true, I want to challenge you to assess why you are the lead and then work on the problem. Now is not the time to run away.
Here’s what I think you are going to find. Any one person bearing all of your responsibility would be the lid. Leading your company forward is, in part, about becoming a better leader. Still, it is mostly about building a better, stronger leadership team, who can then help you build a better, stronger company.
What you are feeling right now is the difference between being a time-teller (the standalone end-all-be-all) and being a clock-builder. Many may disagree with me on this, but I believe you, as the founder, are precisely what the company needs to move forward. You’re just no longer “all” the company needs to move forward. You need a team to lead well, and with the right guidance, you have everything you need to do just that.
Wrapping it up
There is a time to sell, a time to step back, and a time to stay. Determining which route is best comes down to two things.
If you peel away the daily stress, do you still have a passion and vision for a greater future?
- If you do, chances are your best bet is to stay and simply work the problem.
- If you don’t, you may want to sell or step back, but make sure you get the timing right.
What stage is your business in (you can find out for free using this lifecycle assessment)?
- If your business is in Predictable Success and your passion is waning. Now is the perfect time to exit. You can sell or step back, and both will have their best chances of working out well.
- If your business is in Whitewater or Treadmill, you should get it out into Predictable Success (or even Fun) before you sell. But you may find that understanding these stages and how to overcome them may be all you need to fire up that passion again.
If you need any help navigating all of these concerns and realities, give us a call for a free 30-minute consultation. We’d be happy to help point you and your company in the right direction.