Small Business

Why Co-founders Shouldn't Share the CEO Title


This week's Web roundup: What co-founders may want to avoid, how to reduce work interruptions, how best to negotiate, and more

Four Reasons Why Having Co-CEOs Is a Bad Idea

TechStars (BusinessWeek.com, 9/26/07) founder David Cohen says he's working with two companies that have founders sharing the CEO title, and he has concluded it's a bad idea: "Often [it's] just a symptom of a deeper and much more important problem." Among his issues, which he posts on his Colorado Startups blog:

He frowns on "the desire to make equal founders feel equally important," arguing "they should be able to easily work as equals and assume different outward-facing titles."

He feels "it sends a signal to your customers, employees, and partners that there is no clear chain of command, especially in a small company. Much like children play mom against dad, you open yourself up to being played by people inside and outside of your company."

It makes friction between the co-CEOs more likely because it's not clear "who is ultimately responsible for the direction of the company."

People outside the company may figure there's an "internal struggle in general. Perception is reality, even when it's not."

Cohen suggests that entrepreneurs settle "upon general areas of responsibility while maintaining mutual trust and respect…Once you've done that, then you pick titles that accurately reflect areas of responsibility."

Reduce Interruptions with "Meeting Corridors" and E-Mail Management

Interruptions are the bane of many entrepreneurs' lives, but they can be reduced, argues, Paula Jagemann founder and director of eCommerce Industries a $30 million software company established in 1998, on the Ewing Marion Kauffman Foundation's eVenturing site.

One trick: Establish "office hours when you're available to meet with colleagues," which she refers to as "meeting corridors." Try to restrict those you must interact with each day to a certain time of the day for, say, 10 minutes each. Other times, you're not to be interrupted, except for emergencies. Another technique is to read and respond to e-mail less frequently—say two or three times a day. "Aim for predictable, not immediate response."

While she admits that "these new ways of working may seem odd and cause friction at first," your productivity will likely improve.

Is Going Ga-Ga Over Web 2.0 Just a VC Thing?

A new survey of more than 300 business owners indicates that only 14% of owners of small and midsize businesses expect blogs to be very or extremely important. They have only slightly higher expectations for wikis (21%), social networking sites (22%), and Webcasts (31%), reports Briden Business Information, which conducted the survey.

In Negotiating, Don't Be Afraid to Go First

The conventional wisdom that it's best to let the other side make the first offer doesn't always apply, argued Stanford Business School professor Margaret Neale at a conference at the school. She says you gain an advantage by giving the other side a starting point. It might make sense to allow the other side to make the opening offer if you have information that you feel gives you a bargaining advantage, or "when you honestly believe that the other side dramatically values the object of the exchange at a much higher rate than you do."

How extreme should that first offer be? You must straddle a fine line—be aggressive, without prompting the other side to give up and leave the table.

David Gumpert is a journalist who blogs reports regularly about the business of health and has written a number of books about small business and entrepreneurship, including Burn Your Business Plan! He writes his What Entrepreneurs Need to Know columnevery other week.

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