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Tuesday, March 20, 2012

Thoughts on being a CEO

I’ve had the opportunity to speak about how to be a CEO recently and thought I’d share some of those thoughts.  A founder CEO is very different from a non-founder CEO.  My comments will be limited to the non-founder CEO.

The primary role of a CEO is to articulate the Vision, Values and Team.  While the CEO doesn’t create the vision, the CEO had better be able to articulate it.   At first I found everyone asking me , “What’s the big idea?””What’s next?” I answered it with a wisdom of the crowds approach.  I created a culture and team that can answer those questions. Values largely do come from the leader of an organization.  Either the organization will adopt the leaders values or the leader will be rejected by the organization. The most visible aspect of being a CEO is managing the management team. 

The temptation to ‘do stuff’ as CEO is great.  If your background is in technology, you will want to tinker with the technology.  If your background is in sales, you will want to get involved in the sales process.  However, whenever you are tempted to parachute in to do something, take that as a sign that your team needs strengthening in that area. Let your organization feel the pain of its weakness so it is motivated to create a permanent fix.

You are responsible for an organization’s pace.    What is the cadence of the org? Does it vary by function? Does it vary by the calendar?  I strive for a sustainable pace for every employee (what I call rested racehorses), but twice a year, I reserve the right to ask for unsustainable work for up to 30 days at a time.

Two interesting things happen the further up an organization you go: first, your time horizon lengthens and secondly your voice is amplified.  As CEO, you should be thinking in annual cycles as the norm; quarters occasionally as well as looking 3-5 years ahead occasionally.  With the voice amplification, you have to be careful what yo say; what you say has a way of instantly becoming policy and cutting off what could otherwise be very productive conversation.

To become a CEO, you need to have an organization-wide perspective.  This is attained by mastering at least two of the three key areas of a business: Tech, Sales or Finance.   Also, you should be merely good, not great in these areas.  Be good, but recognize greatness.  Hire your replacement who is great and create a team of direct reports that are better than you in every functional area.  This will help you avoid the temptation to meddle in their affairs.  Make sure they are doing things you disagree with and are making mistakes big enough to be included in your board packet.  Furthermore, recognize that the management team is the first team for each VP.  A VP should be 51% VP and 40% functional.

The role of a CEO evolves over time. And it is rare for one person to take a company through more than one or two stages of growth.  Be prepared for the transition.  Also, being a CEO is lonely. You are a team of 1.  Be friendly, but not familiar.  This is why there are CEO peer networks; you can relate to them in ways you cannot relate to the management team, employees, board members or shareholders.

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