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'I fired myself as CEO'

Johannesburg - How can you get fired from a company you started yourself?
 
That's the question Apple founder CEO Steve Jobs had to ask himself when he was ousted in 1985 by the board, whose view differed from his on where the technology giant was headed.

Jobs came back in 1996 and in 2010 the world is buzzing with the success of the Apple iPod, iPhone and more recently the revolutionary iPad.
 
While Jobs' exit was high profile, it shows up one of the very real challenges entrepreneurs have to face when they find their business growing: how to let go of control without being shunted out of the picture.  
 
Jobs sums up this feeling in a presentation he gave at Stanford University, where he told students: "So at 30, I am out. And a very public out.

"What had been the focus of my entire adult life was gone, and it was devastating. I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down."
 
"I fired myself as CEO," said Jonathan Miller, the founder of Forge Media. "The first time I did it, it didn't work out so well but the second time it was far more successful."
 
Miller said what he noticed was that many entrepreneurs tended to "hog everything" and found themselves being dragged into trying to deal with issues that did not always make optimum use of their time.

How to let go gracefully
 
Asked whether he butted heads with the company CEO he had appointed, Miller said that one of the key ingredients to letting go of control is finding somebody who has a shared vision.
 
"You cannot abdicate responsibility and then expect people to follow your vision," he said.
 
One of the key issues he identified was finding a way to incentivise the incoming professional manager. This could take the form of equity as well as profit sharing arrangements.
 
"Equity is a nice carrot - but profit share is a great one," he said.

Entrepreneurs also need to understand when they need to step back and think logically, says small business guru Allon Raiz of Raizcorp.
 
"Ego is one of the biggest killers of small businesses. When entrepreneurs make ego-based decisions rather than business-based ones, they impede growth and keep their businesses small," he said.
 
His advice: hire people who are smarter than you.
 
A further step to consider is whether you are hurting your chances of a more profitable exit by grimly hanging on to operational control. A point raised by many of those who spoke to Fin24.com is that if the business is perceived by an outside buyer to depend heavily on the intellectual capital of the entrepreneur, it could hurt an outside valuation.
 
"Think like a buyer rather than a seller," was a comment made by one consultant.
 
For those contemplating relinquishing control of their firm, small business expert and author Scott Cundill has one piece of advice in his book How not to start and run your own business.

He says: "Business is about people. Nothing more and nothing less. The more people you get to work with and the deeper you connect with them, the greater the experience of your journey."

- Fin24

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