Today on Marketing Rocketfuel, Drew & Michael tackle the biggest mistake made by mid-sized company CEOs. We discuss how the CEO Bottleneck will kill any momentum in your company and how to open it up to scale your company’s growth.
Transitioning from a micro-business to a mid-sized company can be super exciting! As your company transitions, the CEO does too. More often than not, the CEO of a mid-sized business lands themselves in the “CEO bottleneck. ” Time and time and time again, the CEO bottleneck can keep you from being successful. The bottleneck then trickles down, preventing your employees from being able to do the jobs that you hired them to do.
What is the CEO Bottleneck?
The CEO bottleneck refers to the idea that the CEO of a company can become a bottleneck or limiting factor in the decision-making process and overall efficiency of the organization. CEOs can become involved in too many tasks. The bottleneck can also happen if the CEO is unable to delegate effectively, or if there is a lack of clear communication and decision-making processes within the company. Decisions then get delayed or even not made at all. This can lead to inefficiencies and potentially hinder the growth and success of the company.
CEO’s of mid-sized companies end up in the CEO seat for a reason. These people are hardworking and innovative. Let’s take a closer look at what the typical profile is of a CEO of a mid-sized company.
The Profile of a Mid-Sized Company CEO
CEO’s of mid-sized companies tend to be people who:
- 1. Started the company themselves. They may have done this with a team or alone.
- 2. They built the company with your talents and abilities.
- 3. They are now at the point that the company has grown beyond just them. They have staff to manage and facilities to maintain.
- 4. The company has anywhere from 10-200 employees.
- 5. They are typically making between one and 50 million on your
- annual sales goal.
It’s also important to note that a CEO of a mid-sized company may have or need to have experience in managing and leading teams, as well as a strong track record of business success.
The Bottleneck Mindset
For a long time, the CEO may have been able to keep up with all aspects of the business. However, once the company is mid-sized, it’s impossible to maintain the same level of involvement. At this point, it becomes difficult to know how and when to let go of tasks that simply bog the CEO down from taking the next step in growing the business. They’re used to doing everything and often don’t know how or when to let go of the tasks that bog them down.
A bottleneck mindset leads the CEO to think they can’t relinquish tasks. They began to have thoughts like:
- “I started this company. I know how to do everything in this company.”
- “Nobody can do it better than me.”
CEO Bottleneck Effects
When the CEO bottleneck takes root, the effects can be significant. It can hinder the efficiency and decision-making process of the organization. Some potential effects of a CEO bottleneck include:
Delays in decision-making
if the CEO is involved in too many tasks or decisions, it can lead to delays in decision-making. It can also delay response time to a need.
leads to inefficiencies in the organization as the incompletion of tasks.
A lack of clear communication and decision-making processes can lead to confusion and misunderstandings among team members.
Employees feel that their ideas are not heard and therefore, causes a decrease in morale
If the CEO bottleneck hinders the organization’s ability to make decisions or respond to changes, it can lead to slower growth.
Avoiding the CEO Bottleneck
In order to avoid this, it is vital for the CEO to delegate effectively, establish clear communication and decision-making processes. The CEO must have a strong team to support them and the organization’s operations.
Drew and Michael reference the book “The E-Myth Revisited” by Michael E. Gerber. Gerber’s book, published in 1995, has become a classic in the entrepreneurship field. Gerber’s book provides practical advice for entrepreneurs on how to build a successful business. “The E-Myth Revisited” states that a CEO must work on developing systems, processes, and the right team to support growth and long-term success. Gerber emphasizes the importance of understanding the difference between working IN a business and working ON a business. Gerber also provides guidance on how to manage and delegate effectively, resulting in a well-functioning organization.
Here are some steps that a CEO can take to fix the CEO bottleneck:
Tips to Avoid and Fix the Bottleneck
Give yourself the title of CEO
When you are scaling up your business, leaders from larger companies want to meet with the leaders of other companies. The title of CEO carries the weight of the leader of the organization. A CEO must function as a CEO and not just in name only.
Identify and delegate tasks to team members; empower them to take control. As your company grows, the CEO must let go of things one by one.
Establish clear lines of communication and decision-making processes. How will decisions be made and implemented? Ensure everyone understands the process.
Build a strong team
Surround yourself with competent and capable individuals who can support you and the organization’s operations.
Set clear goals and priorities. Identify the most important goals for the organization, and prioritize them.
Seek outside help
Consider hiring a business coach or consultant to help you develop strategies for overcoming the CEO bottleneck.
Take time to review and reflect. Set aside time on a regular basis to review your role and responsibilities as CEO. Determine the areas where you can delegate or streamline tasks to improve efficiency.
A CEO can overcome the bottleneck and improve the organization’s overall efficiency and decision-making process.
Action Tip: Evaluate Yourself and Seek Honest Feedback From Employees
Ask this question: how am I getting in the way of my success? Journal all of the things you are currently doing. Evaluate what’s in the way of your success. Maybe you are stuck and aren’t sure. Be vulnerable and find out what the employees think. Drew and Michael suggest providing an anonymous survey to gain brutally honest feedback. It can be scary. Doing so will show your employees you are humble and completely relatable. According to Pastor Craig Groeschel, people will follow you as a leader, not because you are “right,” but because “you are real.” Praise your team when they provide you with honest feedback.
On Our Next Episode of Marketing Rocketfuel, we will learn about..
the Social Media Coordinator of a marketing team. Who is this person? What is their role? How can they help you grow your business?
Reach Out To Learn More
If you find yourself stuck in your business with 15 jobs and you’re still trying to grow your company, reach out to us at Escape Plan Marketing for a discovery call.