It is my thought that if you are looking to take on a position, you should prepare yourself by gaining experiences and skills necessary to be successful in that role. This often takes years. For those of you who aspire to be a CEO, this post might be useful.
Why, you ask, might I be qualified to write on this subject? A couple of reasons:
- Many years ago, I applied for a COO position. As preparation for the extensive interview process I did an outline of what I thought a COO should be thinking about. Not getting the job and watching (actually, working with) the person who did, gave me a lot to think about (both in terms of his successes and failures) and I always try to learn from my failures and I did here; and
- My participation in Textura further gave me an opportunity to observe first-hand what a successful CEO does to be successful. It was better, much better, than a graduate level course on the subject. And, everyone who knows me, knows I very much like good graduate coursesJ
So, what are the things that a CEO should bring to the table?
- Vision— The CEO needs to be at least three steps ahead of the rest of the world regarding their thinking about where is the business today and where is it going to go. And believe me, if you don’t know where you are, the odds of your getting to where you want to be are really low. The vision can be defined in three, albeit gross, dimensions:
- Products/services—this includes understanding today’s products/services and how they are expected to develop over the next 3 to 5 years;
- Markets— this is a multidimensional attribute and includes geography, industry, function and/or business process and understanding how customers see the products/services, i.e. are they premium products or commodities, are they luxuries or necessities;
- Culture— this is probably the most difficult part of the vision to articulate, but it relates to everything from work ethic to integrity and defines how the company operates as defined by the attitudes and actions of the employees. Culture as with vision in aggregate requires constant attention and infusions of energy lest entropy sets in; and
- Organizational Structure—this is the most ephemeral of the items on this list, but is important in that it defines (short term) what is important as prescribed by where resources are going to be deployed and investments made.
- Leadership— the CEO needs to be able to articulate the vision and get both employees and investors excited (i.e., willing to put in the effort necessary to get a startup off the ground and invest respectively) about the business. Good leadership is often the difference between a good idea and a successful business.
- Investor Relations— There are almost always investors. Whether they are friends and family, angels, VCs or in later stages stockholders, there are investors who need to be convinced to invest and to stay invested. This is a time consuming and often frustrating role. It requires someone who understands finance, the business and an ability to manage people relationships including, very importantly, the psychology of investing;
- Maturity— Being the CEO requires many skills, but also a level of maturity that only comes with experience. CEOs need to be able to resist impulses and know when not to. They need to know when short term thinking should rule and when they need to pay attention to the long term. And, they need to be right 80% of the time. That only (yes, there are exceptions, but not many) happens with maturity; and last but, not least
- Drive—Starting a business requires more than the standard 120% that employees need to devote to high performing companies. And, the CEO needs to infuse (enthusiasm, marked by energy and creativity is contagious and the CEO needs to lead by example) the business with the energy necessary to be successful.
These first four attributes are attributes that the CEO should retain even after the business gets off the ground. The following two are important for a CEO to engage in early in the life of a startup but are almost always handed off (COO and CFO respectively) once the venture gains momentum.
- Operational Management— Early in a company’s life there isn’t budget for a COO. Therefore, the heavy lifting (95% of their time at the outset) for keeping things moving forward falls to the CEO. This includes product development, product delivery, sales, customer support and any other operational efforts necessary to serve the customer and build the business.
- Financial Management— Too many businesses fail because they don’t understand (and therefore plan or manage) their finances and a surprising number of businesses can tell you if they are profitable and if they aren’t when they will be— with and rigor behind their statements. And, investors (and customers) are very much (to the point of not participating) interested in understanding the viability of the company. A CEO who isn’t managing and capable of communicating the financial state of the company isn’t going to be successful.
There is of course a lot of detail that is necessarily left out of a blog post, but I believe that this covers the territory. I am interested in (at a high level) filling in any holes that I might have left, so your feedback is much appreciated.
Copyright 2017 Howard Niden