LinkedIn founder explains how a CEO evolves as the company grows
Reid Hoffman is not only the billionaire
co-founder and chairman of LinkedIn, he's one of Silicon Valley's top angel
investors and sits on the board of several companies, including Kiva and
Mozilla.Hoffman tells The 4-Hour Workweek author Tim Ferriss in a new episode
of Ferriss' podcast that to better understand how companies are run, it's
important to note that there are three types of CEOs.Each is best suited to the
role depending on the size of the company and has their own skill set. Here are
the responsibilities of each kind: Small company (1 to 50 or 100 people,
depending on industry) It's the CEO's responsibility to build a strong team and
work together on a few clearly defined problems. The CEO needs to be in the
trenches and focused on establishing the company's identity. Medium-sized
company (50 or 100 to 500 or 1,000) The CEO needs to focus on process and
organisation. This entails setting a new set of priorities for the company and
training employees on how to meet these new goals. Large company (500 or
1,000+) The CEO is primarily focused on leading the company's strategy and
developing and maintaining the corporate culture.This means creating the
appropriate structure for the company, ensuring the right people are in
essential roles, making the most important hires and empowering employees to
meet their goals.
Hoffman says founders often experience
difficulties when a company advances into a new stage, since they often do not
feel capable of leading a transformed company. He says, ultimately, every
company is different. Founders may choose to replace themselves with a more
seasoned executive, as Hoffman did at LinkedIn with Jeff Weiner, or they can
stay on and surround themselves with top talent, as Brian Chesky did at Airbnb.
If a founder finds their own replacement or is
replaced by the board, Hoffman says, it's essential that the new CEO have a
founder mentality, since bringing in someone who is talented and experienced is
not enough. He experienced this at LinkedIn -his first replacement, Dan Nye,
was a gifted leader but not the ideal culture fit that he would eventually find
in Weiner.
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