Dan Sullivan defines two ultimate freedoms. First, freedom to do the things you love. Second, freedom from the things you don’t. For many founders, hiring a CEO makes both possible, freeing leaders from certain aspects of the business and easing pain points. Done well, hiring a CEO is a life hack to win back personal time. The wrong process leads to more pain points. It’s a common problem among Members.
Planning an MMT at Home called How to Fire Yourself as CEO, I went to the source of all knowledge: Google. Though my search turned up tactical advice and a few great books (more on those later), it was lacking. Even the best books skipped a few steps—all the heavy lifting before the CEO role is even addressed.
If information were an iceberg, everything online floated above the surface. Lots was missing: How can founders prepare themselves to put trust in someone else, let go of daily operations and hire the best possible fit? How do you know if you need a CEO in the first place?
It’s a unique challenge and the stakes are high. As a founder, how do you replace yourself?
I wanted to eliminate those blind spots, so I leaned on MMT Community. I spent more than 30 hours in conversation with all types of founders to go deep beneath the surface and reach the biggest part of the iceberg, advice only revealed among peers. This mentorship was much more rewarding than Google.
Here, I’ve crowdsourced wisdom from some of the world’s top entrepreneurs to help you hire a CEO and unshackle from the day-to-day aspects of your business.
First, a bit about the incredible collection of talent and experience.
Community Wisdom from Elite Leaders
I’m grateful to have some very smart, very successful friends—and MMTers—who want to send the elevator back down and mentor at scale, eager to offer candid thoughts.
In my search for advice about hiring a CEO, I spoke to:
- A founder who grew a business from $0 to $200 M in two years
- An entrepreneur who sold a business in one of the largest private equity transactions in Canada
- A founder known as the “Warren Buffet of tech,” with a portfolio of 30 businesses led by 20 CEOs
- A franchise owner with 400 locations across 3 brands
- A founder with a $1B valuation who counts Lewis Hamilton as an investor
I also did a roundtable with MMTer Tucker Max, whose succession was incredibly successful.
Tucker scaled a small start-up into Scribe Media, a company that helps authors create and market books. Not an easy feat with a high price point and a high-touch product, one based on growing Tucker’s personal brand as a multiple New York Times bestselling author. Since onboarding CEO JeVon McCormick a few years ago, Scribe has experienced 20X growth. McCormick has won local awards and high praise on Glassdoor, including an outstanding 94% approval rating. Despite multiple offers to jump ship, JeVon stays with Scribe (Tucker offers more on this below).
Offline, I also interviewed John Berardi. He and Phil Caravaggio grew Precision Nutrition, a SAS business in the health and fitness space, to sell for $200M. John offered insight into their journey as co-founders to ensure both could step away.
Members can access these full interviews at MMT Library.
This brings me to the first big question: Do you really need a CEO?
To quote Peter Drucker, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Here’s how to determine whether hiring a CEO is the next logical step.
Do the Heavy Lifting
A successful hire involves loads of work at the outset—personal and professional soul-searching. Nobody talked about this. Not a single blog, website or book that I found. Only in conversations did I understand, as a founder, you need a strong sense of self-awareness around your unique abilities.
In my case, I identify more as an artist than an entrepreneur. Business is simply my canvas. In terms of unique abilities, I’m very creative. I’m great with generating ideas, seeing gaps and troubleshooting. Operations bog me down. I wouldn’t want to lead a large organization with lots of logistics. If I were on the hunt for a c-suite executive, it might be a COO.
To gain a better sense of self-awareness: Build your perfect day
Once you know what you want your ideal day to look like, reverse engineer your workday—and business—to look the same. One entrepreneur told me he once looked up to Steve Jobs until he realized the former Apple CEO didn’t have the best track record when it came to his private life. With two kids, my friend wanted to spend more time with his family. For him, hiring a CEO was a life hack.
Do whatever you need to identify your ideal lifestyle, how work fits into that vision and how a c-suite leader might support you.
MMT Members can access The Perfect Day workshop here.
One Tactic: Take an inventory of your time
As a business owner, you likely have a sense of where your time is going. One MMT Member, Jim Estill, kept track of his time in 15-minute increments for a certain duration to extrapolate learnings for his potential CEO. You don’t need to go to such extremes, but it helps to be as specific as you can. (If you want to lean into Jim’s method, you can check out his book, Time Leadership). John Berardi looked at his time in terms of tasks, writing down everything he did for a total of 64 tasks. He knew a CEO would not take on every one of them.
Dividing tasks into categories—which were product related, which were operations—helped identify gaps. Ask yourself: Which tasks are most important to you? Which can realistically be filled by a CEO? You may find another role is needed more urgently. This was the case for MMTer Meghan Telpner. She thought a CEO could help run her business, The Academy of Culinary Nutrition. After some heavy lifting, she realized the role of General Manager better suited her needs
Once you’ve identified your skills and designed your ideal with your business in mind, it’s time to shape the role of CEO.
Define the Role
It’s tempting to hire someone quickly. Identifying the role means more time investment, more tasks. Trust me, it’s essential. The position doesn’t look the same in every organization, which means you’ll need to be explicit about what the role of CEO looks like for your company.
In the MMT Community, some hire CEOs and stay on to cast the broad vision. Other founders aren’t involved in the day-to-day at all. Define the CEO role against your own. As you shape both roles, remember: You are not your business.
One founder called hiring a CEO one of the toughest tasks for an entrepreneur, partly because it involves keeping yourself separate from a company that makes up a huge portion of your life and identity. He estimated people get it right about one third of the time. This is optimistic, according to Harvard Business Review, which found one-third to one-half of chief executives fail within their first 18 months. Statistically, it’s not good.
Boost your odds of success by staying out of your own way. Don’t hire someone to replace you as an individual. This is a recipe for failure because this person doesn’t exist. Instead, look for someone who can go beyond your strengths to execute the vision.
Paint a clear picture, something others can look at without needing constant and immediate input from you. Cameron Herold’s book Vivid Vision is a fantastic aid for building this picture and making it accessible to your stakeholders, team, investors and clients (Members can access Cameron’s virtual Vivid Vision session in our MMT Library). Vision casting is critical for both kinds of CEOs. Which kind do you need?
“Hiring a CEO can be a life hack.”
Is Your CEO a Mercenary or a Missionary?
There are mercenaries and missionaries—crusading professionals and those who crave purpose more than profit. This is not a new concept. Still, seeing it through the lens of defining a role and hiring against it was eye opening for me, especially in terms of incentive and recruitment.
The mercenary is more common, especially in the tech space where rapid growth and scalability are prime concerns. In one of my interviews, an entrepreneur told me he asks himself four questions about potential mercenary CEOs:
- Can I trust this person?
- Are they capable?
- Do they have a track record of scaling?
- Is there alignment on vision?
Notice the recruitment focus on professional history, and the ability to understand and execute a mission. It’s more common to find mercenary CEOs through talent firms, the same way you’d discover any other c-suite executive. With strong bonus incentives, you might poach from a competitor.
One founder suggested strong performance-based goals. He oversees dozens of CEOs with $100k-$225k base salaries, plus top-ups. Using this model, he has no problem when salaries reach seven figures. Writing bigger checks at the end of the year is a sign of strong performance.
Missionary CEOs are drawn to purpose beyond profit. Incentives are partly built into the social mission, vision or culture of the company, so recruitment looks very different.
In general, talented CEOs are not sitting on their hands; they need to be head hunted. Missionaries are wooed with a strong why. You don’t have to be a charity. You do need a strong culture. Tucker’s CEO hire, Jevon McCormick, turned down multiple offers to stay with Scribe because he believes in the vision, which Tucker built out in a well-defined picture. This also allows you to punch above your weight.
One founder told me he often scoops up executives he can’t afford—people making $500k base salaries who leave those jobs to work for him and make $180k, lured by remote work and other levers.
Purpose-driven leaders can be more complicated to recruit, so let’s delve into tactics.
Case Study: How to Lure a Missionary
One founder I spoke with was looking to build a top team. After identifying ten companies he admired in his industry, he contacted the CFO at each one, telling them about the company and the impact he hoped to make, adding: We’re looking for a CFO, do you know someone in your network? It was essentially a short sales letter.
The vast majority responded to say they were personally interested in the role. One left a director position at Amazon to work for him—at the time, he had a small product-led start-up. The storytelling approach nabbed these executives, who weren’t jazzed about Amazon or Coca Cola; they were looking for meaning.
From there, he did the same for other roles, then leveraged the interview process, asking: If I were to hire you as CMO, what would your department look like? What’s your budget? The people he hired came ready with contacts to recruit teams. Together, he and his new hires built out massive, key departments—finance and marketing—within months. I thought this method was brilliant.
There’s no silver bullet to find a missionary. Tucker found JeVon organically; he was initially a Scribe client. In other cases, founders tapped old friends. There wasn’t a common theme, though I can’t think of anyone who found a missionary through an executive search firm.
“Businesses are often limited by their founders.”
Businesses are often limited by their founders’ micromanaging. Letting go is challenging but necessary to set up a new CEO for success. You can do this a number of ways.
In a case involving two co-founders, long-term grooming worked well. They first hired a general manager, building in time with each of them over a few years, teaching aspects of both roles slowly, giving the new hire more responsibility until they were doing a bit of everything. Then came a promotion from GM to CEO. This also set the co-founders up for a huge sale with no burnout and an easy exit.
Another founder with multiple operations told me something entirely different. As soon as there’s alignment on vision, he gives new CEOs full autonomy. As founder, he checks on monthly financials and quarterly SWOT analyses. If CEOs need guidance, they reach out, but are otherwise autonomous. This method was inspired by Warren Buffet and Berkshire Hathaway. Buffet doesn’t solve small problems. His job is to hire and fire CEOs—full stop. He doesn’t interject.
Ready for tactics?
Here are some additional resources:
- Who: The A Method for Hiring, by Geoff Smart
- Hiring on Purpose: How the Y Scouts Method is Revolutionizing the Search for Leaders, by Max Hansen
- Y Scouts, executive search firm
- Tighe Burke, founder of Srch Partners and a thought leader in the space
Members can access even more resources at the MMT Library, including:
- How to Fire Yourself as CEO: digital session + Jayson’s video notes
- John Berardi’s complete interview with Jayson
- Cameron Herold’s Vivid Vision: digital session
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