In this explanatory episode, Scott Ritzheimer, Founder of Scale Architects, shares when and why to step down as CEO into level 6 ownership. If you're in stage 5 wondering whether it's time to exit the CEO seat or if you still have more to give, you won't want to miss it.

You will discover:

- Why stepping down too early without a clear vision for what's next usually fails

- How to evaluate if your vision truly requires you to move from CEO to owner.

- What it takes to intentionally prepare a successor while thriving in level 5

This episode is ideal for for Founders, Owners, and CEOs in stages 5,6 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

Scott helped start nearly 20,000 new businesses and nonprofits and with his business partner started led their multimillion-dollar business through an exceptional and extended growth phase (over 10 years of double-digit growth) all before he turned 35.He founded Scale Architects to help founders and CEOs identify and implement the one essential strategy they need right now to get them on the fast track to Predictable Success.

Want to learn more about Scott Ritzheimer's work at Scale Architects? Check out his website at https://www.scalearchitects.com/

Connect with Scott through his LinkedIn at https://www.linkedin.com/in/scottritzheimer/

Hello, hello, and welcome, welcome once again

to the Start, Scale, and Succeed podcast-the only podcast that

grows with you through all seven levels of your journey as a

founder. I'm your host Scott Ritzheimer, and today we are

going to take on the fantasy that pulls founders out of their

seat as CEO or CVO too early, and it's this idea, this belief

that real freedom means owning and not running. And for some,

that's true. For some, it's time, and that means going from

level five to level six, and it's going to be beautiful, but

for many, that's just not the case. And we need to figure out

what the difference is between the two, and that's what we're

going to talk about today. Because before you step out,

before you step down, before you bring in someone else to take

over as CEO or leader of your organization. Organization, you

need to make sure that you're doing it because of your vision.

Otherwise, you'll end up stepping out, and like plenty of

other founders, finding very quickly that you want back in.

And boy, can that get ugly! That can hurt a lot for you and

others, and we don't want to do that. So, how do we know if it's

time to step down? Should you really step down as CEO? Well,

if you listen to the previous episode, you'll know one: this

is part of a series, and and so you're probably up to date

there. If you haven't, and you haven't checked out the first

part of this series, you're gonna want to go back and do

that. So head down to the show notes and go back to just just

episode one of this series, this should you really series, and

you'll get a lot of context for what we're talking about here.

And when we say things like level five and level six, you'll

know what we're talking about. You don't have to watch

everything between here and there, so it's not like you have

to watch nine episodes. You just go back and watch that one, come

back to this. It'll make a ton of sense. So that's the

disclaimer. However, if you did happen to watch the previous

episode, which some of you might have, or or listen to it, then

you'll know that you'll know my two criteria for whether or not

a founder should be CEO of their organization, and those criteria

one, you have a compelling vision for a better future for

your organization. You know where this thing can go, and and

that's not inherently true. When you look at folks who are who

are leaving their time as as as CEO, they struggle with this.

They technology is changing, the industry is changing, and

usually for reason number two, which we'll get to in a second,

they they just don't see it like they used to. Maybe the the the

the challenges of change in the past are getting in the way, or

they're just reaching a season as a leader where they've got

other things that they want to do, or they they just don't have

the energy to pursue it anymore, which is number two, and that

is, even if you have a clear vision, you also have to have

the energy to do it because this is what a lot of people get

wrong about the CEO role. The CEO role is not an own and not

run role. The CEO role is a running your organization role.

Now it's not managing every single detail. It's leading the

executive team, but that's a full time job. It's not even

necessarily busy in the busy season. You might be busy in the

off season, like GMs are in sports, you might have a

different flow, a different schedule, but it's it's a full

time job to be a good CEO or chief visionary officer (CVO)

for your organization, and that takes a lot of energy. And for a

lot of founders who are who'd be listening to this, where this

episode applies to them. Let me just say this: this episode

applies to founders who are in level five. So that means you

already are acting as CEO. What does that mean? It doesn't mean

that your business card says CEO.

It means that you have other at least one other executive on

your leadership team, and you are the chief executive. It

means that you have an organization that's big enough

to require at least two executives, which is generally

going to be somewhere north of 50, and could be up to 1000s.

And so it's a big range, but the game is largely the same in that

window from a personal standpoint. Point so we're

talking about chief executives who have other executives

working for them and need other executives because of the size

and complexity of their business or nonprofit. We're not talking

about disillusioned leaders who just want out because they're

tired and they think they're the problem in the organization. We

talked about that and it can feel very similar. So, if you're

wondering, hey, is this quite a fit, or maybe I don't quite have

50 people in the organization, or maybe I'm right at that line,

but I'm not quite sure, go back and listen to the episode before

this one, and you might find some more answers there. Because

this episode that we're talking about right now is really only

relevant for those who've gotten past the previous episode,

chosen to go past, I should say. And so, what we're talking about

are folks who are in the CEO seat. They've been in the CEO

seat for a while, usually 510, maybe 20 years, and they're now

starting to question what's next, what what comes after

this, and they're thinking about an exit. I hear this all the

time. I don't want to be doing this when I'm 65 I don't want to

be doing this when I'm 70. I don't want to be doing this when

I'm 85 Doesn't matter what the number is. It just matters that

you don't want to be doing it anymore, and and that's helpful.

That's usually where this internal conversation starts,

but a really bad reason to leave being in an organization's CEO

seat is because you're trying to get away from something, and so

the fundamental question here as to whether or not you should

step back is less to do with are you tired of what you're doing,

even though that's a big part of it. We've already talked about

it, but it's actually secondary to what are you going to do

next? Because if you're really tired, and so you leave the CEO

seat because you're really tired, but you never actually

decide what you're going to. You don't actually have a vision for

what you're going to do next, and it's not golf gallivanting

and grandkids. Like there's a time for that. You'll enjoy

that, but that's not a purpose. That's a that's leisure, and and

so what has to happen here is you're deciding should I be CEO

should I step down you have to decide not should I step down

but what am I stepping into you've got to have a vision for

the next level you've got to have a vision for level six and

the difference between level five and level six is you step

from owning and running the business in a kind of singular

focus in level five to owning but not running a portfolio,

where you might have your business as part of that

portfolio, you might sell it, you might have real estate as

part of the portfolio, or other businesses as part of the

portfolio, or stocks and bonds, or whatever else, NFTs. Does

anyone do NFTs now? But where you're not like a day trade

investor, but you're a portfolio owner, where your income is not

tied to your hours, it's tied to your return on assets. That's

what level six looks like. We're not running a bunch of

businesses; we're owning a bunch of businesses potentially, and

that's actually a really cool place to be when you're ready

for that. When the vision that you have can't actually be

satisfied by one organization, and or you don't have the energy

to to keep this going, and and that's what's going to give you

the best step into level six. So before you think about stepping

down, what you really want to think about is what you're

stepping into, and so let's unpack these two options: either

you know stepping down and out, or stepping up and continuing to

thrive in level five. Let's start there.

Reasons why level five might be the right level for you. One,

we've already talked about the prerequisites, but again, this

is not like a brand new startup. This is a an established

organization, brand new and established, make it sound

chronological, which isn't necessarily true. This is a a

complex, scaled organization. It needs executives. It needs a

competent visionary at the helm. And so, if if you're cool with

that, if you're ready to lead a an executive team, if you are

ready to entrust them with making decisions with you and

for you, as opposed to executing your decisions for you, the way

that I like to think about this is this. CEO, especially once

they they really transform into the CVO, the Chief Visionary

Officer, which is which is a better fit for most founders.

CVO is responsible for a couple of things: one, having that

vision and the energy to pursue it; two, building the team that

can make progress toward that vision. Three, resourcing them

effectively and holding them accountable to how they use

those resources. And what that looks like in a practical sense

is, as CVO, as chief executive, you are largely concerned with

doing the things this year that are necessary for next year's

success, or the year after that, or 20 years after that, it's a

very future-focused role, and so you're working hard in the

current, in the present, but not so that you can hit this year's

revenue target, that's your executive team's job. Your

executive team's job is to hit this year's revenue target, to

hit this year's production targets, to hit this year's

profit targets. If you have a CEO that works for you, it's

their job. If you have a COO, it's their job. If you have an

executive team, it's their jobs to to manage all those things.

Your job is to make their job of doing all those things next year

easier by what you focus on this year, by what you help develop,

by how you provoke them to innovate, and how you prepare

them for change. And so, if you're ready to focus on next

year stuff and you have the energy to do that. That's

fantastic. If you can trust your team with leading this year,

that's fantastic. If you have a, if you have the ability to

attract and retain, to coach, to to coordinate, and I said this

earlier, but it's worth repeating. And hold accountable

your team of executives. So being CEO really is about how

well you lead your executives, and that starts before they

start. If you're a really crappy CEO, then great executives

aren't going to come and want to work for you, or even if they

do, they're going to leave pretty quickly after. So you've

got to you've got to attract and retain, and be able to coach and

encourage and hold accountable the people who are going to lead

your organization to your vision. That's that's really

what we're talking about here, you in level five, you have to

have the discipline to do what needs to be done for the future

of the organization, even though it's not urgent. This is a real

challenge for folks that are used to being driven by the

urgency of earlier levels. You have to be able to recognize

what is important. You have to be able to prioritize in order

of importance and not urgency, and you need to be able to self

motivate you and motivate your team to do the important things

despite all the urgent stuff that you're feeling, or the

boredom that you might feel from time to time, and you need to be

willing to do all that full time. And so, really, so long as

you have that vision and you have the energy to pursue it,

and you're willing to develop the skills to see that out, you

should stay in that level five seat for as long as you can. Now

that doesn't mean that you just assume that you'll be there

forever. In fact, the a a a sound move from level five to

level six is usually about a three, four, or five year

process. It doesn't happen overnight because it takes time

to develop the next leader who's going to take over after you,

and so you want to stay in that level five.

Even if you want to get to level six, you want to stay in level

five for as long as you can, so that you can give yourself time

to intentionally make progress toward the conditions that are

required for a successful move to level six. What are those?

You have to. Here's the. I call it the secret of succession, but

succession is not about finding someone else to fulfill your

vision for the organization. It's about finding someone else

that you trust with the vision of the organization, someone you

trust to change it, and it's that person that's going to

really lead the organization forward, instead of it slowly

dying once you're gone. And so you need some time to create

that. And if you have that person and you know what you

want to go to next, you're an ideal candidate for level six.

If. You again have a vision, but it's bigger than what your

organization can accomplish, or different from what your

organization can accomplish. And you're ready to give that your

best energy, then that's a great indication that you might be

ready for level six. If you're willing to trade the control of

having your hands ultimately on the wheel to the better but

harder way to lead by influence, then you might have matured to

the point that level six is going to work really well. If

you would rather invest in others' dreams than chase your

own, right? If you'd rather leverage other people's not just

time-you've been doing that for a long time with your

employees-but to leverage others' vision, then you you

might be ready for level six. If you would rather if you'd rather

see someone else's vision come to pass, is what I'm trying to

say here. And so, the again, this is this isn't simple. I'm

not I'm not trying to oversimplify this for you, but

the reality of it is, is you you you need to start with, what

does your vision demand? Because your vision is either going to

demand that you you really double down and go all in on

leading your organization, and in that time finding a great

successor to lead it beyond what you can do, or your vision will

compel you to jump fully into something else. Now, when I say

fully in, fully in in level six does look different. Level six

is not a full time job for most people. In it's usually

somewhere in the ballpark of 20 to 30 hours. But what level six

is is it's highly intentional, and it also requires a great

degree of discipline. So, if you have those things, you're ready.

You're ready to step down, not because you're running from

something, but you're running to something. Then you're likely

going to be a great candidate for level six. So that's it.

That's how you choose. Do you have a vision for the

organization? Do you have the energy to pursue it? If not,

then do you have a vision for what's next? If not, then you

need to start working on that, and you need to start working on

a successor who can take over after you. And as you get those

pieces to fall into place, it's going to unlock the ability for

you to step out of level five as that chief executive and into

level six as the true owner, where you don't have to focus on

one organization anymore, but you can shift your focus to

many, and it's an immensely rewarding and satisfying season.

So that's it. It's the difference between level five

CEO, level six owner, and what we're going to talk about next

time is a an even blurrier line, if I'm completely frank, but an

even more meaningful one, and that is that owner is not the

pinnacle. Owner is probably what you've been fighting for for

most of your careers, probably as far as your vision has gone

to date. But there's actually one step further that you can

take if it's right for you. We'll talk about what that is in

the next episode and whether or not it's right for you. And

until then, know that your time and attention mean the world to

us. I hope you got just a little bit more clarity out of this

conversation than you had before. And I cannot wait to see

you in that next episode. Take care.

Hey everyone, Scotty Timer here. Thank you so much for listening

to the Start, Scale, and Succeed podcast. I hope this episode

gave you exactly what you need for the level you're in right

now. If you want to discover what level you're in, take our

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foundersquiz.com. That's foundersquiz.com. It'll pinpoint

exactly where you are and give you tailored tips to move

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