It rarely comes down to owner-CEOs being more stubborn. It usually comes down to the role. A hired CEO has a board that can fire him — that creates a different kind of pressure around difficult decisions. An owner-CEO typically has a board he chose himself, often chosen because they believed in the strategy.
Three things that usually recur
- No one who actually challenges the decisions. The board, if there is one, is often chosen to be supportive. Outside perspective usually only appears if the owner-CEO asks for it. Few owner-CEOs ask to have the strategy challenged until they have to.
- Own money on the line. When you stand to lose several million of your own money by admitting the plan isn't working, you'll unconsciously look for evidence that it still is. It isn't weakness — it's how people usually react when their own money is exposed.
- The business has become part of the owner's identity. Admitting the strategy is wrong isn't just a financial decision. It often feels like a judgement about you, not just on the strategy. That's one of the reasons difficult decisions usually take longer for owner-CEOs.
What it costs in practice
The extra waiting before a difficult decision usually costs more than the decision itself. Liquidity gets tighter. Lenders and suppliers negotiate harder. Customers have often already reacted. By the time the owner-CEO finally acts, it's often the same decision he could have made earlier — but now with far fewer options.
How to compensate for it
The answer isn't to change personality. It's about getting an outside view into the business where one doesn't arrive naturally. A board chair who doesn't hold equity. A former CFO. A turnaround specialist. Their job isn't agreement. It's challenging the assumptions before reality does it for you.