One of the things I see when working with CEOs, especially in smaller businesses and organizations, is that growth eventually forces you to become a different kind of leader. In the beginning, the CEO usually does just about everything. You make most of the important decisions, handle key relationships and probably know what almost everyone is working on. When something goes wrong, people come to you.
For a while, that works. A founder or CEO who knows the business inside and out can move quickly. But I’ve been telling leaders something more often lately: The $5 million company can’t run like the $1 million company. I’m not really talking about revenue. I’m talking about stages of growth.
What works with 10 employees may not work with 30. Informal conversations become less reliable. Decisions get missed. Eventually, the organization needs systems that didn’t seem necessary a few years earlier. Then the CEO realizes something else: I need other people who can lead. Before long, there are several executives sitting around the table.
But having executives isn’t the same thing as having an executive team. We put a lot of energy into developing the CEO. I coach CEOs myself. But making the CEO a better leader doesn’t automatically make the leadership team better at leading together.
That’s one reason I almost always want to work with the CEO and the people closest to them. I want to hear how each person understands the organization because sometimes what you hear is very different. I’ll ask, “What’s the mission?” Then, “What’s our North Star? Where are we trying to go?” I’m not looking for everyone to recite the same sentence. I want to know whether they’re describing the same organization. Sometimes they aren’t.
I’ve worked with talented teams operating from different understandings of what matters most. One executive thinks growth has to be the priority. Another believes the organization needs to slow down and strengthen operations. The problem isn’t disagreement. Good leadership teams disagree. The problem is when nobody realizes they aren’t aligned.
That confusion doesn’t stay in the executive meeting. Employees hear different things depending on who they talk to. Departments make decisions based on their own priorities. What begins as misalignment at the top eventually becomes part of the culture. And the cost of that confusion is usually carried by the people we lead. They spend their energy navigating competing priorities and trying to figure out which leader to follow.
A strong executive team shouldn’t agree on everything. If I’ve hired smart people, I expect them to see things I don’t see. I want somebody in the room who is comfortable telling me an idea isn’t going to work. Alignment and agreement aren’t the same thing. You should be able to disagree about the route without being confused about the destination.
That requires trust, but it also requires clarity. People need to understand where the organization is going, what was decided and who has the authority to make which decisions. For many CEOs, that last part is difficult. If you built the organization by being involved in everything, being involved in everything can start to feel like leadership.
I’ve been guilty of this myself. There have been times when I thought I was empowering people while still expecting important decisions to come back through me. Eventually I had to recognize the contradiction. I couldn’t ask people to lead and then make them nervous every time they led differently than I would. We say we want people to take ownership, but our behavior can teach them that the safest decision is to wait for us.
The leadership behavior that helped build the $1 million company can become the bottleneck in the $5 million company. As the organization grows, the job changes. Your value isn’t only in making good decisions anymore. It’s in building people who can make good decisions when you aren’t in the room.
And I think that transition challenges something deeper in us as leaders. We spend years making ourselves essential. People need our judgment, our relationships and our ability to solve problems. There is affirmation in being the person everybody needs. Then growth asks us to do something that can feel completely opposite: build something that needs you less.
That doesn’t make the CEO less valuable. It means your value has changed. Leadership becomes less about how many decisions require you and more about whether you’ve built people capable of making good decisions without you.
The executives have to make a transition too. Being on an executive team means your responsibility extends beyond the department with your name on the organizational chart. You still have to run your area well, but you also have to care about the health of the entire organization. Sometimes what’s best for the organization isn’t what’s easiest for your department. Sometimes the team will choose a direction you wouldn’t have chosen yourself. That’s part of leading together.
When I’m looking at an executive team, I want to know whether people trust each other enough to tell the truth, whether they’re clear about where they’re going and whether they understand who has the authority to make which decisions. I also pay attention to what happens when something goes wrong. Do people retreat to their corners and explain why the problem belongs to somebody else? Or does everyone at that table understand that the health of the organization belongs to all of them?
You don’t build that kind of team by changing titles or drawing a new organizational chart. The organization has to mature, and so do its leaders. Growth isn’t just about becoming bigger. At some point, what you’re building becomes too important and too complicated to depend on one person knowing everything, deciding everything and carrying everything.
Eventually, the question facing the CEO has to change. It can’t only be, “Can I lead this organization?” It has to become, “Can we lead it together?” You can hire executives. Building an executive team is something different.
