Founder and CEO. What’s the difference?

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The new economy era has driven founders to create their startups with distinctive innovations. But, there are misconceptions about founders and CEO (Chief Executive Officer) regarding leadership. 

 

Founders are the ones who have ideas to start a business while the CEOs are the highest-ranking executive manager in organization and lead the business organization under a commissioner. Should founders always become the CEO? No, it’s not, because the hard cold truth is that most founders simply do not encompass the skill set to be the CEO of their organization. 

 

Based on my experience and observation, starting up a business is relatively easy, but the hard part is to make it sustainable and successful. Starting a business only needs an idea and capital to invest. However, managing it requires a lot more than that. In fact, 90% of all startups fail within the first five years. One of the main reasons for such a huge failure is the lack of proper management. 

 

That’s why businesses need a great CEO because the business will always have to deal with employees, customers, partners, agencies and so on. This requires skills and experience, and sadly not all founders may have these qualities.

 

So, what is the real difference between a founder and CEO? Can a person perform both roles? 

 

Some people can perform both roles at the same time. For example, Bill Gates, Mark Zuckerberg, and Richard Branson are founders and CEO. But, not all founders go on to be CEOs. Usually, these are generally people who grew up in the corporate world and have real experience in the business world before starting their own business. 

 

Most importantly, CEOs have to be able to make tough decisions. Like hiring and firing according to the company’s goals, values and well-being.

 

Founders have seven crucial tasks like choosing the marketplace, identifying the ideal customer, setting goals, building teams, understanding the competition, raising capital, embracing change. 

 

While the CEOs have responsibility for the overall success and livelihood of the entire organization, they have the ultimate authority to make final decisions for a company, sets the corporate culture, working with the founder to determine the companies’ overall mission and core values. They make sure all business is done in conjunction with that mission and according to their core values. 

 

CEOs also take responsibility for creating, planning, implementing, and integrating the strategic direction of an organization to meet their financial goals. This includes responsibility for all components and departments of the business. CEO makes certain that the organization’s leadership maintains constant awareness of both the external and internal competitive landscape, opportunities for expansion, customers, markets, new industry developments, and standards. The CEO must be able to make tough decisions based on the company’s needs, values, and goals! 

 

Question: can all Founders become the CEO?

 

They can. In fact, many have. Founder can acquire leadership skills but it requires a lot of time and effort. The solution is to start from the bottom. Founders should not try to be the CEO if they don’t have leadership skills or experience on how to manage a business.

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