6 contrasts between founding CEOs and corporate CEOs

An interesting article comparing Satya Nadella and Bill Gates explains why Nadella “gets it” and Gates apparently didn’t.

However, it is important to recognize the inherent differences between billion-dollar entrepreneurs (founder-CEOs like Gates) and CEOs of established companies (corporate CEOs like Nadella). This article explores the contrasting dynamics of those building from scratch versus those managing existing entities.

#1. Founder-CEOs use startup and growth skills. Corporate CEOs use growth skills.

Billion-dollar entrepreneurs possess a unique blend of visionary and building skills essential to building a society from the ground up. These founder-CEOs navigate through the uncertainties of emerging industries and devise strategies in order to dominate, the Corporate-CEOs manage to develop on an existing base, benefiting from the resources already in place. Satya Nadella’s accomplishments are remarkable, but they rest on the foundations laid by Gates.

#2. Founders-CEOs do it their own way. Corporate CEOs do it the corporate way.

Billionaire entrepreneurs start from scratch and rely solely on their abilities. This experience can shape their personality and their attitude towards business. Conversely, corporate CEOs, on the other hand, often rise through the ranks within an organization, which requires a careful balancing of ambition and loyalty to the company. They learn to navigate organizational dynamics and prioritize diplomacy over naked aggression.

#3. The founders-CEOs adapt from the start. Corporate CEOs don’t start.

Billion-dollar entrepreneurs must adapt and grow as their business grows from an idea to a giant. They become leaders and learn to steer the business in new directions. Or they fail. Gates adapted to the Internet when he threatened Microsoft. Business CEOs also have to adapt but, in most cases, they adapt the business to changing evolving trends, like Nadella did by adding cloud services for the next stage of business growth. Microsoft, not revolutionary trends.

#4. Founders-CEOs don’t have to “kiss”. Corporate CEOs do.

Billion-dollar entrepreneurs have no one above them to hug. While some can get venture capital, most billion-dollar entrepreneurs avoid or delay getting venture capital and thus retain control of their business. As their businesses grow, however, they learn to soften their image and project a more approachable demeanor. Corporate CEOs, on the other hand, acquire and hone the skill of navigating the corporate hierarchy, skillfully adapting their communication to please their superiors.

#5. The founders-CEOs make history. Corporate CEOs rely on history.

Billion-dollar entrepreneurs are starting businesses without the benefit of policies or historical data. They must blaze their own trail relying solely on their abilities and entrepreneurial vision. Conversely, corporate CEOs are professional managers who build on past experiences and existing corporate structures to move forward incrementally, striving to improve on what already exists. They rarely innovate on revolutionary ground.

#6. Founders-CEOs win in breakthrough industries. Corporate CEOs mostly fail in breakthrough industries.

The success of billion-dollar entrepreneurs, from Andrew Carnegie to Mark Zuckerberg, can be attributed to their ability to capitalize on emerging trends to dominate industries. By identifying and seizing opportunities within these nascent sectors, they leverage their vision to outperform entrenched companies. In contrast, CEOs often feel threatened by emerging industries, not knowing how to respond beyond resorting to acquisitions. Unfortunately, statistics show that around 70-90% of acquisitions fail.

MY TAKE: By understanding the distinct differences between the needs of founder-CEOs and corporate CEOs, business schools can better meet the needs of entrepreneurs seeking growth and provide targeted support that addresses the unique challenges faced founder-CEOs, rather than mirroring the curriculum designed for corporate CEOs.

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