Today’s Myatt on Monday’s question was posed by a new CEO who asked: “Do you have any tips for first-time chief executives of a start-up company that would allow for a faster and more effective transition?” Virtually all of the advice and counsel I provide to CEOs is just as applicable to first-time CEOs as it is to tenured executives. Moreover, while start-up and early-stage companies certainly have unique issues, great executive leadership is really not life-cycle centric.
While I could suggest you buy a copy of my book, or read other posts contained on this blog (not bad suggestions by the way), I thought it might be interesting to see how other CEOs would answer the question. In the text that follows, I have provided a variety of answers to today’s question, which have been put forth by a number of different C-level executives and directors…
“Take a very critical look at your product, how competitors will respond, and why customers are going to give you a chance. The high tech landscape is littered with companies that had great ideas and were even first to market, only to be crushed. Netscape is a great example, along with countless PC companies, dotcoms, and yes even wireless companies. Patents, in theory, are great, in reality they are easy to get around and expensive to defend, so you can’t hang your hat on that. The bottom line is that founders are rightfully proud of their product, company, and strategy; and this often blinds them to the competitive threats in the market place and the challenges of entering/penetrating the market and gaining market share. The best question to ask is why.”
~ CEO of a Service Company
“Retain a CEO Coach…someone who’s been there before and knows how to avoid the land mines that you would undoubtedly uncover if left to your own devices”
~ CEO of a Technology Company
“All that matters when you are starting is funding. Period. If you don’t have the money backing you, the best-laid plans in the first 100 days, or rallying your troops to support your efforts won’t matter. Number one priority should be an excellent member of the team who is LOCKED into the venture community that has done this before.”
~ CEO of a Technology Company
“Build a customer value analysis spreadsheet or table that succinctly quantifies the value to a potential customer. If you can demonstrate an overwhelming or compelling customer benefit (e.g. X months payback, Y percent IRR [internal rate of return] etc.), then investors will be intrigued. It’s not the technology; it’s the value it creates for customers, and your ability to defend your unique intellectual property, through patents and trade secrets, that should be emphasized.”
~ Senior Executive of an Energy Company
“I cannot overemphasize the importance of having a skilled and trusted finance professional on your team from day one. I would recommend that you not even make the first phone call to a VC or Angel without this person in place (either a full time or trusted contractor/CFO for hire type). Second, you must get referenceable customer traction (installs and most importantly revenue, however little) as soon as possible. Third, from day one, make sure you build a workable/trusted alliance with the founders and that they are in agreement that you ’are‘ the CEO both outside and inside the company.”
~ CEO of a Software Company
“You need to take some fast actions on low-hanging fruit to show the organization and team that you are quick on your feet and a decisive leader. They (your new team) all know the low-hanging fruit, pick some. And as the CEO, you are responsible for the Corporate Culture, so make it clear early on what type of culture you are driving.”
~ CEO of a Telecom Company
“Talk to everyone in the organization and in the industry as soon as possible; deliver bad information immediately (and don’t try to ’spin‘ it); and remember to breathe!”
~ CEO of a Consumer Services Company
“1. If you haven’t already, draft a ‘first 100-day’ plan. 2. Start-ups and early-stage companies are fun to run; but you need to move quickly….constantly work at creating a higher sense of urgency — even when you think things can’t possibly move any faster.”
~ President of a Media Company
“In the start-up operation, it is very important that you do the ‘SWOT’ analysis (Strength, Weakness, Opportunities and Threat). Moreover, a pilot run based on a predetermined period would unfold all the problems related to your start-up operations. Isolate them, and find solutions and alternative methods to address the same and move forward. The key is to have a positive cash-flow at the end of the first year.”
~ President of an Apparel Company
“Surround yourself with trustworthy people as quickly as possible. With so many decisions to make in a short amount of time, you will often have to move forward without having all of the information you would want. This works best when you can tap into people who have relevant, specialized expertise and are not afraid to challenge your thinking, while at the same time have demonstrated a commitment to making the overall business successful (not just about themselves). Then you will be more likely to make fewer critical mistakes.”
~ Senior Executive of a Biotech Firm
“Understand the culture and the current people who play in that culture. I found that some have hidden agendas that will undermine what you were brought in to accomplish.”
~ Senior Executive in the Food and Beverage Industry
“You need to be a good listener. Hear what your people have to say about what is working and what is not. Make them feel that they are part of the change process and you will have their buy-in along the way. Create an action agenda that outlines clearly where the company is going and what needs to get done along the way to achieve the desired results and continue to keep people updated on the company’s progress.”
~ Senior Executive of a Pharma Company
“Make sure you have a clear understanding of the priorities of your Board of Directors, both individually and collectively, and establish a good frequent dialog with them. No matter how brilliant your action plans and strategies, you must be in alignment with your board’s expectations and priorities to be successful as CEO.”
~ Managing Partner, Private Equity Firm
“Take some private time. Don’t let the job define you.”
~ Senior Executive of a Telecom Company
“One sure way to win respect and loyalty is to find out what the key priority of the team was that was dismissed by the former CEO. If there is any kind of consensus that the company was being held back in an area by your predecessor, you can look like a hero; show that you listen to and value your subordinates’ ideas, and there is a good chance that they are right and the company will pick up in performance.”
~ CEO of a Marketing Company
“Leadership is the key attribute for ensuring success as a CEO; and leadership, in my opinion, is very much driven by one’s ability to manage expectations of the numerous constituencies a CEO must deal with — employees, board members, investors, strategic partners, community, industry associations, etc. To accomplish this requires clear and precise communications with all, combined with the ability to adjust your/their expectations as critical information is obtained, assessed, and addressed.”
~Senior Executive of a Financial Services Firm
“My advice would be to develop your personal networks while in the CEO position, to have a support system outside the company, and to develop a net in the event that the position does not work out to your expectations.”
~Director of a Pharma Company
“It is all about expectations! Or, more to the point, the difference between expectations and reality. Try as we might control the reality of our surroundings, it is far easier to control (or at least moderate) the expectations.”
~ CEO of an IT Consultancy
“If possible, a few days before you actually start, have the HR person or CFO hold a short meeting of all your direct reports to be; the person controlling the meeting asks, ‘What do we want to know about John/Jane Doe?’ The second question asked is, ‘What do we want him/ her to know about us as a group?’ The third question is, ‘What do we want him/her to do for the company?’ The fourth question is, ‘What do we want him/her to do for us as a group?’ The responses are noted and presented to you when you first take the chair. It can be quite surprising what comes out of these questions asked when you are not there and may never know (at least for sure) who asked what, unless the one raising the question tells you. The one critical point is that when you reconvene the group to give them your answers, to be done within 72 hours of your start, you are totally honest and candid, as you will be measured against your initial statements. This does not mean that actions cannot be flexed from the initial statement but do them with recognition of what you said and give comments as to why so all can understand; it helps the trust factor significantly. Obviously the objective is to shorten the learning period in a structured way, and for me it has always proven beneficial.”
~ CEO of a Manufacturing Company
“1. Meet with your board members individually (typically over lunch or dinner).
2. Find a very good mentor.
3. Stay calm, stay cool, stay collected.”
~ CEO of a Bank
“It is all about making money! Nothing more, nothing less. You’re in because they made a bet that you will make them more money than the other guy. You’re out because you did not make very much money for them. Don’t ever forget that.”
~ CEO of a Professional Services Business
“What is success as a CEO? It’s simply this: Living life without fear in your gut (living with peace) and looking back and being proud of yourself for the positive impact you made on people, both high and low in rank. You see, it’s all about your attitude and how people see you. What’s inside can be contagious.”
~ CEO of a Manufacturing Company
“Do not hesitate to make a decision. Hesitation or being indecisive will become rampant in the organization. Do not be shy about laughing at yourself in front of others. Never compromise your personal ethics and beliefs. Finally, know when it is time to go home. It is a job.”
~ President of a Manufacturing Company
