How to Avoid Power-Hungry Bosses

Here's a seven-point checklist to test whether a CEO is a control freak.
Alix StuartSeptember 26, 2011

It’s an often-told sad story: a finance executive is hired by a fast-growing private company to help it move up to the proverbial next level. There’s great professional potential and tantalizing financial upside. Soon, though, the truth emerges: the CEO, owner, or founders have no intention of letting anyone else make important decisions.  

If you’re among the burned, don’t beat yourself up. “If you ask someone if they’re committed to delegating, almost everyone is going to say yes, because it’s the right thing to say,” says Doug White, a former Capital One Financial executive who now co-heads consulting firm Whitestone Partners. But  in reality, he says, “it’s a very small percentage of time — maybe 5% — that an owner at a small or medium business is truly ready to delegate and give up decision making.”

White and his wife Polly, his business partner, frequently work with business owners on the transition to professional management, helping them hire outside executives like CFOs without driving those executives crazy. The Whites recently wrote a book about the process, Let Go to Grow: Why Some Businesses Thrive and Others Fail to Reach Their Potential (Palari Publishing, 2011), based on their experiences.

Not surprisingly, one of their key findings is that a businesses’ ability to thrive hinges on how well the original owner or founders can give up control. They also point out how critical it is to have the right structure in place before that transition; namely, the right people, well-documented processes, and appropriate metrics for internal reporting. “If you delegate without having those elements, the business will absolutely go into the ground,” says Polly White.

Yet from the outside, assessing whether a business is a monarchy or a meritocracy is incredibly difficult. Even when other high-level executives are in place, they may not have the full authority that their title suggests.

Along those lines, the Whites offer the checklist below for finance executives who may be interviewing with firms that are at an inflection point. Ideally, you can ask these questions of other executives at the company, as well as those with whom the CEO/owner has worked in the past. If your efforts are blocked, of course, that’s a red flag in and of itself. And if the answers are not uniformly yes, think twice about any offer you receive.

1. If the CEO/owner left for two months and had no contact with the business, would things continue to function normally?

2. Has the CEO/owner successfully delegated significant responsibility in prior roles?

3. Are hiring, termination, and employee discipline decisions made by the department manager rather than the CEO/owner?

4. Do managers “own” a specific portion of the P&L? Are they held accountable for the results, and are they able to make the decisions that influence the results?

5. Do managers have clearly defined goals that are aligned with the company strategy and with the goals of the other managers?

6. Do managers have the ability to reallocate spending between expense categories for which they are responsible? (For example, could the vice president of sales and marketing decide to spend more on advertising and less on trade shows as long as the total spend was within the budget?)

7. Does the CEO/owner let decisions made by subordinates stand, even if he or she disagrees with them?

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