Startup founders wear many hats that they take on and off as company priorities ebb and flow; especially, but not exclusively, CEOs. One moment they are the CFO and raising capital and the next they are the Head of Product and making critical roadmap decisions. As a quarter-end nears, they become heads of Sales and as the company expands (or contracts) they’re running HR. There can be tremendous stress when a founder tries to wear too many hats at once or struggles to decide which to wear, which to remove, and which to hand off to someone on their team — if such a team exists! The entrepreneurs I coach have used the following framework I’ve created to help them determine which hats to wear and when to wear them. While this article is largely focused on startup CEOs, the framework can also be an effective tool for other organizational leaders.
Updated July, 2023
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The most common array of hats that a CEO may wear at any given time fall into the categories below, but no CEO — early stage or not — can split their time and attention so perfectly as the chart denotes.
Before deciding which hats to wear and when, a startup CEO should first identify with what their hats (categories) are in their current role. Here’s how I define these very common categories:
Product (What & When): This is what the company produces. It includes customer discovery, design, building, shipping and support. It also includes prioritization and tradeoff decision making for features, new products and services. Many startup CEOs are product people and this can often be one of the hardest hats to take off completely — if ever. Note that being a product visionary and/or a great coder or designer does not necessarily mean one is a great Product Manager — knowing how to make tradeoffs, analyze customer requirements or develop a product roadmap. Be sure to fully explore this “hat” before deciding it’s one to wear or take off.
Culture & Process (How): I was inspired recently by a coaching client of mine who combined these two into one category. If the culture doesn’t work, then the processes won’t work either. Creating high performing teams goes well beyond what workflows, policies and procedures are in place. It is how the team communicates, operates and evolves as a living organism. Never underestimate the value of focusing on culture with process starting from day one! Some CEOs are natural culture builders and system thinkers, but if this is not a strong suit, it’s definitely a hat that should be worn by an in-house culture expert or by someone with natural team-building/program management skills.
Strategy (Why, When & Where): Determining the company’s True North, setting direction for at least the next 12–18 months and making critical decisions about the company’s mission for things like fundraising, revenue growth and human capital. This is also about defining and communicating why the company is doing what it does which is as important as where it is going. Employees and investors/board members all perform better when there is clarity on why the company is moving in a particular direction. This hat is quite commonly on the CEO’s head forever.
Talent & Development (Who): A company will not succeed or grow without hyper focus on the growth of their employees. It is vital to the success and stability of an organization to establish best in class hiring practices and programs as well as to develop each person’s skills as individuals and leaders. As companies grow, CEOs must be thoughtful about where to focus hiring efforts, how to provide incentives to retain top performers and how to grow those with high potential. In addition, as companies grow, there will always be tradeoffs on when to promote from within, when to hire more experienced talent and when it’s time for some team members to move on. CEOs often wear this hat more often than others, but many have COOs or strong HR leaders on their teams who wear this hat permanently.
Back Office (How): A company can have the best product and team in the world and mess things up royally because the back office hat was on the wrong individual’s head. This is mostly finance (accounting, receivables, payroll, etc.) and legal (employee contracts, partnerships, etc.). I’m amazed at how many CEOs wear this hat for too long. It’s ok early stage, but let the professionals do this work once the company hits product market fit and is beginning to operate at scale. Some CEOs are former CFOs who are perfectly capable of leading back office teams, but data shows that CFOs often lack “Outside-in” thinking (a strong mega-trend and customer focus)” and lack the creative and inspirational leadership qualities of a great CEO. While CEOs must always be fully aware of cash flow and the financial health of the business, the back office hat can be taken off once operating at scale.
Marketing, Sales & Business Development (What, Why & When): Brand identity, target audiences, community development, filling the pipeline, closing deals and creating strategic partnerships. These tasks often require CEO leadership — especially early stage when a CEO must stay close to customers to evolve the product and close deals. Some CEOs are very marketing/sales oriented which can derive huge benefits for the business as long as there are capable leaders on the team wearing other hats. However, many CEOs are not marketers and, like the Back Office hat, should leave that work to the experts.
The Have-to-dos, Want-to-dos & Good-ats
Rather than being stressed out trying to balance all hats at once, it is best to focus on wearing 1–2 hats at a time. These 1–2 hats are those that HAVE to be done. It’s great when these prioritized hats also happen to be hats a leader wants to wear and require skills that they believe they are good at, but that is not always the case — especially for early stage CEOs who often need to do a lot of things that they may be good at, but don’t necessarily want to do. Similarly, there can be things a CEO is good at and wants to do, but the business doesn’t require them to do it. Finally, there are times when something has to be done, the CEO wants to do it, but they lack the skill to do it well (self-professed or not!). Here are a few examples:
- Finances — CEOs may be good at doing the accounting for the business and it has to be done, but often very willing to give that up as soon as they can hire a head of finance. They don’t want to do it!
- Product/Technology — No matter how much a founder/CEO wants to design or code — and they may be good at it — there is a point as a company scales when CEOs have to take off this hat. They are no longer “have to-dos” at their level. Note, I have seen a number of CEO-Founders take their CEO hats off to dive back into the product!
- Hiring — Inexperienced CEOs may be managing people and leading teams for the first time. They have to hire and want to hire, but are often unskilled when it comes to sourcing, interviewing and managing the onboarding experience. They also may not know exactly who and what they are looking for and may have to iterate a few times before getting the first few hires right. This is a skill they are not yet good at. However, this may be a skill they have to develop vs. hand off to someone to do for them.
If a company has the runway, the CEO can usually move swiftly to swap or delegate hats with the support of their co-founders and leadership team. They may hire more seasoned leaders or specialized team members and/or offer training for those who need to develop their skills. However, for the fledgling teams who can’t fund these improvements, it is even more important to make hard choices about which hats to wear…even if that means letting some things slide or not executing perfectly. The tradeoffs can be hard and it is extremely common for CEOs to become so paralyzed about which hats to wear that the performance of the company is suffering more than if they had just picked 1–2 hats to focus on and move forward. The focus of this exercise can allow a leader to move quickly from one to the next so things don’t slide for too long.
To get started on assessing “have to-dos (HTDs), want to-dos (WTDs) and good-ats (GAs)”, I recommend a two-pronged approach:
- Identify the primary categories (hats) you wear today. This can be done together with personal hats (Mother, Caregiver, Volunteer, etc.) or two different charts — one for work and one for non-work hats.
- Reflect on the hats identified and assess your HTDs, WTDs and GAs today — Y for yes and N for no. This exercise requires a large dose of humility and is a subjective assessment — what good means to you, may be viewed differently by others (team, investors, partner, etc.). If unsure, do a 360-feedback survey with your team or ask for candid feedback from your cofounder(s) and/or investors.
- Define the actions (if any) you plan to take to change your assessments. For example, if Talent Development is something you have to do, want to do, but you’re not good at it, what steps will you take to improve? Hire a coach or mentor? Take a course? Read a book? Similarly. if you are good at Back Office, but you don’t have to do it or want to do it, what actions will you take to supplant your efforts? Perhaps hire a fractional CFO or an in-house accountant?
- Finally, actions are only useful if they can be measured. How will you know you have effectively achieved your goals? Will employee satisfaction or retention numbers improve and, if so, by when? If you are bringing on a fractional CFO, when would they come on board and how will you know you’ve officially taken that hat off?
Here is an example of the chart of a CEO of a post series A startup with product market fit:
In the above example, the CEO has prioritized Product, Culture & Process, and Strategy as the hats they have to wear. Here’s how they thought about it these and the other hats:
- As a former engineer and product manager, Product is their area of expertise and therefore not a hat they need to explore at this time. They will continue to oversee the product team. [NOTE: this particular CEO’s cofounder is CTO who oversees the engineering team]
- Both Culture & Process and Strategy are still very important hats for this CEO to wear, but they have assessed that their skills in both areas could be improved.
- In terms of Talent & Development and Back Office, this CEO has squarely decided that they no longer have or want to wear these hats. They realize “people stuff” is an important focus for the business, but fully admit it’s their least favorite thing to do so will hire a head of people to wear that hat.
- Even though they are good at Back Office work, they really don’t enjoy that work and know it can easily be handed off to a combination of a fractional CFO (finance) and their head of engineering (IT).
- Finally, this CEO knows they still need to be very involved in Marketing, Sales & BD, but they don’t need to wear the leadership hats for any of these efforts. Therefore, with fresh cash in-hand after their series A, they will hire heads of marketing and sales who will report to them and with whom they will partner to develop their go to market strategy.
I recommend that leaders who follow this process check in on progress quarterly, but it all depends on how one works and how fast change is happening inside the organization. Choose what works best for you!
No Recipe Is Perfect
The exercise above is one way of thinking about how to balance many hats a CEO — or any leader of a large team — might wear. There’s no perfect algorithm and while one might aim to only wear a maximum of 2–3 hats at a time, there will be times when more hats will have to be worn. I’ve also seen CEOs who find that once they’ve mastered a new skill, the hat they didn’t want to wear is actually one that they enjoyed wearing more than they expected.
There are of course sometimes when CEOs realize that no matter how much training, coaching or mentoring they get, they are not able to wear any of the hats well or they just don’t enjoy wearing them. This is often when the company is achieving a level of scale that requires more experience than the CEO’s own professional experience. Some CEOs recognize this and work with their boards to find a successor, but sometimes this can be a decision taken out of a CEO’s hands when their board/investors decide the business can’t wait for the CEO to grow into the role. I’ve also seen many CEOs who find a great partner (President or COO) to run the business with them and augment some of the skills they have yet to or want to master. This not only keeps the company on the rails, but gives the CEO a role model to learn from along the way.
CEOs should be performing a regular assessment of where their time is focused, identify measurable results when changes are made and what actions to take to get there. Even a simple visual like the Before and After on the balance wheels below can kick start the process. Identifying what the current focus areas are (before) and where should they be (after).
No matter how a leader decides to assess and prioritize their hats, leaning into the balancing process will likely mitigate stress and potential burnout. What processes have you seen that are effective towards balancing hat wearing? Please share in the comments! Meanwhile, if you are thinking about trying this exercise, I have created a google sheet template for anyone to use to start this process. Feel free to save a copy of the template for yourself and dig in!