You don’t think when you start a company as the founding CEO that, if your venture actually works, you end up with three jobs: founder, CEO, and chair of the board. The first eight years at Bonobos, I have learned a lot about the tension between the first two. It didn’t even occur to me that I had the third job until much later.
Being a founder is about being so driven to distraction by the world that you want to put something new in it. It’s an act of creation, of irreverence, of defiance, of hope, and arguably one of narcissism. (If you dispute the last point, just ask yourself: of all the people on the planet, no one has both thought of this before and been capable of doing it, other than you?) Founder is, along with president of the Cubs, one of the great jobs of all time: you get to create something that matters to you, and to attract great people to join you in making that creation mean something. If it works, you make money for yourself, your team, and your investors: the people who back you and believe in you. If it really works, you change the world. The only issue with it? If your company is successful, the founder job changes so rapidly that it becomes something that barely resembles what it was when it began.
In the unlikely event that your venture takes off, you become something else that can crowd out the founder role with its demands on your time: CEO. Soon the creativity that got you into this gives way to something more regimented. You come to discover the CEO job is a lot different than founder. It’s about focus, scale, and execution. It’s mostly about not doing new things, and picking the few new things to do which are really going to matter. It takes judgment. It’s about hard decisions, sometimes lonely ones. It takes courage. You need to become a leader, overnight, often to people who are your peers or your elders. It takes self-awareness, humility, empathy, and intellectual honesty. As you attract more employees, more shareholders, more customers, and more capital, you have to decide where to go with it all. It takes endurance, perseverance, and a profound sense of duty.
A third role then creeps up on you. As the company scales, the board becomes more important. Board meetings that were an afterthought with just a couple of people in the early days, almost like check-ins, become more significant moments of actual governance: real board meetings. The board expands and the amount of capital invested increases. Stewardship of the company, matters of strategy, whether to sell or go public, whether to raise more capital or not, whether to buy a company or not, how to align incentives, and how to take a group of disparate people who put in money and make them into a team in their own right: these becomes your new challenges. You become the leader of the shareholders, or more precisely, the leader of the people who report to the shareholders. They call this role chair of the board. In tandem, you may become a voice for the company vision, a shepherd for the corporate strategy, the architect of the company balance sheet, a keeper of the company’s long-term future, and an ambassador for the company to the investors and the wider world.
Soon you are juggling three balls.
For some period of time, you do all three. You may even want to do all three in perpetuity, and not plan for any change. If you are thinking long-term, though, you may want to be more proactive. In our case, at Bonobos, I decided to drive the strategy myself. I started dreaming two years ago with our board about hiring a great CEO to run the company, so that I could step up into an executive chair role. As I’ve learned about the importance of focus on company strategy, I wanted to hone in on similar focus in my role. I wanted to play a role that I thought I was uniquely positioned to play. I have a long vision for the company, one that could take decades to unfold, and I didn’t think that my running the company day-to-day was necessarily optimal to getting there. I started studying how company leadership can evolve, and I discovered I had to answer three questions:
- How do I hire a great CEO?
- What do I do as executive chair?
- When do I do it?
The first question has a long answer, and I’d rather let Fran show the world what she can do before sharing how she got here. The second I will answer today. As the universe of interest in this topic may be reasonably low, I take it on in an appendix. The last question has a simple answer, which is make the move from a position of strength. You have to. Otherwise you can’t recruit a strong CEO.
At Bonobos, we feel lucky to be in a position to attract someone like Fran. We’ve come a long way from when I first met her five years ago. We are the largest digitally native clothing brand ever created in the US. We re-invented the fit of a men’s pant and just sold our 1 millionth chino. We have evolved into a full suite men’s brand behind phenomenal growth in shirts and suits, built on that common proposition of great fit together with great service. We have re-invented the physical store for the digital age and now have 16 of them. We are fully distributed in all 118 Nordstrom locations. We believe we are on our way to building the most important men’s clothing brand of the 21st century. We also have a dream that we can replicate what we’ve done with Bonobos, leveraging our capabilities in great online service (the ninjas), great offline service (the guideshops), a great supply chain, and great technology/data science to build the leading portfolio of digitally-native brands. We are excited about the early innings of Maide and AYR, and know that we have a lot more to do.
Most of all, we are excited to welcome Fran, who becomes my partner, joins our board of directors, and who takes the helm on June 1st as our next CEO. Her experience is formidable, but it is her humanity that makes what was a ridiculous joke at our first dinner about joining Bonobos, when we had twenty people and never thought we’d even have stores, an unfolding reality in front of us five long and short years later.
What does an executive chair do?
The reality is I don’t know, because I have never done it. That said, I’ve been fortunate to get ready by talking to a number of people who have. Here is my synthesis of what the job can be. The truth will emerge, of course, as this vision collides with reality.
An executive chair is a chairperson who works at the company full time. You have six official jobs:
- #1 ambassador for the company
- Voice for the customer
- Sounding board for the CEO
- Good cop/bad cop
- The innovation frontier: special projects
- Leader of the board
What do each of these mean? I’ll speak from the vantage point of a founder who becomes executive chair, but recognize that that’s not the only way to do it.
#1 ambassador for the company
Without internal reporting responsibility, a founder who becomes executive chair can do a lot more to represent the company than they could previously as CEO. This frees up the new CEO to find the right balance between internal and external roles, and to bring an intense focus to the former. For a digitally-native consumer brand with lots of partners, customers, investors, stores, and opportunities for amplification, there is a lot to do here.
Voice for the customer
Every company can use someone advocating loudly for the customer. As the CEO juggles the competing demands of employees, shareholders, and customers, the executive chair is free to becomes the strongest voice for the customer at the company. What great company has ever had too much of that? Delighted is great, but it’s not enough.
Sounding board for the CEO
An executive chair has unique ability to have both distance and immersion in being the CEO’s chief advisor. The CEO and the executive chair are typically the only two people at the company who are both employees and board members. If it happens that the executive chair has just come from the CEO role, then the CEO has a sounding board who will have particular empathy for the challenges faced and the personalities involved. It is important for the new CEO to have the space to make decisions, and so executive chair must first hand over the keys to the new CEO.
Good cop/bad cop
When the CEO needs a bad cop, you do it. When the CEO needs a good cop, you do it. The chair serves the CEO, and in all ways, not the other way around.
The innovation frontier: special projects
The executive chair can do work internally. For that work they have to report to the CEO. From my conversations, this is the #1 place where friction emerges — as it’s where roles can cross internally. This only works with strong self-understanding for both the CEO and chair on the project goals, with clear communication channels and team alignment about who the ultimate final boss is: the CEO. If it does work, it can be powerful as the chair can get a lot done. When it doesn’t, it just confuses the team.
Leader of the board
A board is an organism in itself that requires nurturing. A good board can be hugely accretive to a company, a bad board disastrous. By having a chair who is focused on it, and in this case an executive chair who has the perspective of being an employee of the company as well, the CEO is freed up to be that much better at running the day-to-day, which is where shareholder value is actually created. This then gives the chair time to think strategy and vision, and to plan for the long term.
And I think there may be a seventh one. I leave it unlisted above, because it is notional, intangible, and cringe-worthy if it is received wrong. I call it spirit animal. A founder plays a magical role at the company: they invented or, as in my case, co-invented it. If and when a founder walks out the door, there is something spiritual that walks out the door too. By stepping up into the executive chair role, a founder who stays on gives that magic a more permanent home, a visible place for it to reside safely into the future. At some point that spirit will be imbued. As Lao Tzu says:
A leader is best when people barely know he exists, when his work is done, his aim fulfilled, the people will say: we did it ourselves.