Why the business-owner isn't always the best CEO
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A lot of people when they start a business just assume that they will be the one running it for as long as they own the company. This in fact may not be the case. Most of the time you will find that there comes a point where it no longer makes sense for the owner to continue running the company. When this happens it is time to hire a CEO.
The reason that the business owner is not always the best option to be CEO is that as the company grows the job of running it will change. Most of the time the business owner is the person who started the company, they built it from the ground up. There are certain traits and skills that you have to have in order to do this. However once the business has grown beyond a certain point the skills and traits that are involved in running the business will change. The result is that in most cases you will want to have somebody else running the company.
The biggest change that will occur as the business grows to a certain point is that the jobs within the company will become more specialized. In the early days the owner probably had to do a wide range of tasks himself and the early employees probably found themselves having to do the same things. When the business has enough employees however you can hire somebody to specialize in each of the areas that are involved in running the business. This specialization will provide you with a greater level of skill but it will also require different management techniques.
As the work of the employees becomes more specialized there is a pretty good chance that the owner of the company will not really understand what is being done and why. For example if the owner was doing the accounting the early days but you now have a full time accountant it is very unlikely that the owner is going to fully understand what is being done. This can make it hard to manage since business owners tend to be micro-managers, especially when it comes to things that they used to do. A full time CEO will know how to get the most of his employees without micro-managing them.
At a certain point in the company's development it will also become necessary to have the person running the company have a better understanding of business than the owner. Very few business owners have any actual training in the field of business. Up to a point this is not a problem and may even be beneficial. However there will come a point where it will be necessary to have the person running the company to have good understanding of the complexities of the business world. When this point is reached the best thing to do is to hire a CEO.