When to bring in an external CEO

Rajinder Balaraman
MANAGING DIRECTOR
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Rajinder:

When do I need to bring in anexternalCEO?

Avnish:

I think if you have that question in your mind, as a founder and genuinely you have it and not your investors is planting it, then you probably know the answer, and which is that you need it. But I would say, you know in multiple videocasts Rajinder, we have gone through these different phases of a company's journey, 0 to 1, 1 to 10, 10 to infinity. We have also spoken in another videocast about Wartime – Peacetime.

So the reality is, these are not all the same things. There are hustlers, there are thinkers, as a founder forget whether you can do it. We have spoken earlier about passion opportunity skillset in other places, right? You may not have the skillset for it, but you may not even have the passion for it. Do you want to manage a company of so many people, right?

So I think the best thing that I have seen, it probably what played out with Google, right, or maybe even Microsoft.

Where, well they are different but the founders realized they needed somebody at a different stage, may be more of a peacetime, since they were winning, andEric Shmidtcame in and then these guys almost got coached under him and came back. I think that’s probably the best example, probably the most self-aware founders in that situation.

But there have been other transitions, Microsoft and so on and so forth. I think you have to be self-aware, are you able to transition between these different roles, do you have the passion and do you have the skillsets. If you have the skillset but don’t have the passion, still don’t do it. If you have the passion but don’t have the skillset, please don’t do it.

Only if you have both the passion and the skillset, should you do it. And otherwise, ultimately, you’re going to be the owner, owners and managers, in India owners tend to be managers, in the US, you’ve seen so many owners are not managers.

If you are truly going to create value as an owner, then please get a manager who is better than you, if you feel you can't handle it, lot of it has to be self-awareness but I think the board, the investors can play an important role, if you are open to it. In telling you whether it’s the right thing to do it or not the right thing to do. But I think the net-net will be, are you able to transition these different roles.

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