How a CEO's role changes as a company grows
In many companies that experience high growth, the role of the CEO changes from doing it all themselves to relying more on delegation. However, this transition is far from straightforward, bringing with it many challenges. It is something that Liesbeth Ceelen of data science company BioLizard has also struggled with. Luckily, the experts at Vlerick Business School are on hand to offer advice.
BioLizard provides consultancy in bioinformatics, data analytics and machine learning. “In other words, we analyse data for biotech, pharma and diagnostic companies,” explains CEO Liesbeth Ceelen. Since she became CEO two years ago, BioLizard has experienced significant growth, not only in terms of client numbers, but also in its total workforce. Consequently, a new interpretation of her role of CEO is required.
1. As CEO, you cannot do everything yourself
“In the early days, I did almost everything myself. I made the decisions, took care of HR, talent management and office management, and practically all sales went through me,” recalls Liesbeth. “This situation became entirely unsustainable. Any kind of work-life balance had gone out of the window, and I noticed that things were bottlenecking with me.”
Following this realisation, Liesbeth hired not only a COO, but also a CFO, as well as someone to take care of HR and managing the office, putting together a real commercial team and streamlining the company’s project management process. The problem? She continued handling a great deal of administrative work and sales calls herself. “During the first two years of BioLizard, I was the only one reaching out to clients. While this is something I really enjoyed doing, it made it hard for me to relinquish that sales role.”
Vlerick’s adviceAt the moment, sales are still too ‘founder-driven’, notes Yannick Dillen, Professor of Entrepreneurship at Vlerick Business School. They need to evolve towards ‘non-founder driven sales’. “You must be able to delegate sales operations to your team.” “From what I understand with Liesbeth, she is trying, but finding it hard,” says Yannick. “You first need to create a solid base with a sales director, a sales manager and, below that, a whole host of account managers.” Be careful, however, as there is also a potential trap here. “The classic ‘founder-driven sales trap’ arises when new recruits are not given enough information to do the job properly. New sales personnel need to know inside out what is expected of them. To ensure this is the case, put together a sales bible – a four- or five-page document that summarises the company's sales culture, and who plays what role within it.” Client categorisation The professor stresses that you must then also make strategic choices. “Not every client will bite when you send your sales director instead. For big clients, you do still need to be present – something Liesbeth has also observed.” So how do you make this distinction? “Categorise your clients into A, B and C tiers. Only for that top category, i.e. the A tier clients, does Liesbeth need to be the ‘face’ of the company. Clients such as for example J&J and AstraZeneca are clearly A tier, meaning you must attend yourself. But she should be able to hand over the rest of the clients to her sales team.” Conclusion
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2. The need for talent management
For her fast-growing company, Liesbeth faces another challenge: recruiting good people and keeping them on board. “We work with a lot of highly educated individuals, particularly PhD students. They are very ambitious and driven, and have a pervasive desire for rapid growth. It's not always easy to find the right balance between keeping people motivated and allowing them to grow at the right pace,” explains Liesbeth.
“So far, it's worked out well. However, I feel we are reaching our limit in this regard. I want to work on managing talent growth by providing an improved structure for doing so.”
Vlerick’s advice“Often the need for improved organisation in terms of talent management arises from the moment a company reaches around 40 employees,” explains Koen Dewettinck, Professor of HR at Vlerick Business School. “People have their own ideas about how they want to shape their future. If you wish to retain talented individuals, you must give them some degree of future prospects. This is the realisation currently facing Liesbeth at BioLizard.” While doing this may seem obvious, it is not so simple in practice. “The difficulty lies predominantly in organisations with flat organisational structures, where individuals perceive little opportunity for career progression, with everyone generally working at the same level. This is something a classic pyramid structure does provide, making it easier to ‘look upwards’, i.e. offering something you can work towards.” Should you then just move towards more of a pyramid structure? “Definitely not. Within a flat organisation, you can define ‘buckets’ of competences and roles. This could entail greater responsibility, managerial assignments, etc. – it all depends on your company's context. By developing tangible goals, you are providing future prospects for your employees.” Conclusion
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3. Getting ready for what's on the horizon
Like any entrepreneur, Liesbeth is constantly on the lookout for growth opportunities, as well as wider opportunities for her business: “Today, while we are primarily focused on data analysis, we can see a big payoff for companies in terms of how they manage their data, and how everything is stored and formatted; data management, in other words. That's where we see a great deal of opportunity.”
“While it may seem logical to clients that these two elements fit neatly together, things are not always that simple for us as an organisation. For one thing, it requires extra knowledge and effort from staff,” continues Liesbeth. “On top of that, you find that not everyone is keen to work on data management. The question therefore arises: how do we tackle this? While we do not want to overwhelm ourselves by growing at too rapid a pace, we do need to continue moving forward.”
Vlerick's advice“I always admire how entrepreneurs see opportunities everywhere,” says Kurt Verweire, Professor of Strategy at Vlerick Business School. “While of course it's good to think of expanding, sometimes it's better to mature as an organisation before adding new elements.” Where is the pitfall? “As a business owner, you need to think carefully about whether any potential expansion will fit a defined client group, as well as whether that client group is too broad. Otherwise you run the risk of losing sight of the basics in the long run. Remember: first the core, then add some more.” This is why Kurt recommends that Liesbeth focuses on her value proposition. “Will expanding lead to ‘operational excellence’ or greater ’customer intimacy’? While this may seem purely theoretical in nature, it's something you have to think about.” Conclusion
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So growing with your company as CEO means above all adapting your job responsibilities. If not, you risk holding back your own growth – and that of the company.