What can CEOs do to scale alongside their companies?
Scaling a company is scary. Every CEO who sets ambitious goals for their business has to repeatedly push themselves into the unknown. This phenomenon remains the same in big and small businesses alike. As a first-time CEO I am aware that I’ve still got a lot to learn, and that much of Signal’s success (or failure) will boil down to how quickly I can grow and transition with the business as we evolve through prototyping, then market validation, and then on to maturity. I believe that the key challenge when growing a business is juggling the neverending demands of running a company, whilst at the same time ensuring you develop as an individual while your organisation grows around you.
Every CEO’s strategy is different, of course. But what isn’t going to change is that a leader’s individual performance will always be tied to the fate of their company. Just as the CEO is lauded when a business performs well, they invariably take most of the flak in tougher times too! It has been demonstrated that the top 10% of CEOs are 10 times more effective than those in the middle of an (imaginary) CEO performance bell curve. (For an illustration, take a look at this TEDx video from Mark Helow, founder of executive coaching specialist 10X CEO.) So how do CEOs improve their performance and become part of this elite band of leaders?
The first thing for a CEO to do is assess precisely where their company is positioned in the traditional development and growth cycle. Signal is one of the ‘lucky few’ startups that have managed to survive the initial embryonic period, raise seed funding, and find some clients. (According to this recent survey, only 37% of new businesses in the information sector — pretty much the area that Signal specialises in — are still operational after four years!) But the work and the multifarious challenges of growing a business do not stop there. As organisations grow, new hurdles spring up every step of the way. Within any startup in the SaaS (‘software as a service’) space, CEOs will lie awake at night thinking: How we will scale lead generation? When do I stop leading sales, and hire a dedicated sales team? When should we think about raising our next round of funding?
And there’s more: aside from operations, hiring, product, sales, fundraising and everything else, a CEO must also function as the firm’s Chief Learning Officer. Developing collective knowledge within a company, and ensuring that the workforce’s overall skillset continues to blossom, is of crucial importance. Helow describes how the best CEOs spend the majority of their time thinking about important points of development for themselves and their business. His list of the six ideal CEO traits are laid out below:
- Extreme time focus: Figure out the three most important things to concentrate on, and ONLY focus on them
- Accelerated learning ability: CEO has to be the chief learning officer! Learn from other people; copy them when appropriate
- Motivation and skill ability: being able to grow at each stage of the business
- Business model creation: understand what your customer really wants. How do we feel their need better than anyone else? Who is my customer? What is the main revenue opportunity?
- Process design: must be able to scale. How to acquire customers at a rapid rate? Should be able to see a few steps ahead, predicting causes and effects
- Talent environment: can you build a world class team?
As well as these development points, all chief executives should try to surround themselves with high-performing individuals, borrowing from their methods and learning as much as possible about how they operate. In my experience, finding people you admire within your space and initiating contact with them is a great way to receive tips, inspiration and lots of other stuff. Absorbing lessons from your peers is vital!
These indicators of CEO performance are all well and good, but how does a CEO improve personally while also tackling the daily challenges of running a business? The first thing to realise is that becoming better as a CEO is coachable. But this coaching can’t take place without the CEO in question exhibiting certain character traits. 10X CEO has built its own business model around unearthing how CEOs can better themselves in this way. Their answer? Focus.
10X CEO recommends that chief executives spend more than 50% of their time on the three issues that matter most to them and the business. Working in this laser-guided way helps to remove irrelevancies and distractions from the average day, meaning that the most important jobs get done quickest. This sort of thinking is combined with more directly business-related goals, such as building a place where talented people want to work. 10X’s recommendations demonstrate that with a little commitment, all kinds of chief executives can tangibly change the way they and their business operate.
Companies need to be agile and able to reposition themselves if needed, according to changing marketplaces and consumer tastes. The skill of a great CEO is to be the figurehead for these transformations when they occur. They need to act as a sounding board and mouthpiece for cultural and strategic change. Being able to drive a company on to bigger and better things requires the ability to grow alongside it. This is something I, as a young inexperienced CEO, am trying to focus my energies on. Knowing that I have to develop my core skills, and realising that I need to surround myself with a world-class team of colleagues, mentors and advisers, will help me fill any present and future performance gaps.
Scaling a business and scaling as a CEO are inextricably entwined. As a business grows, a CEO is presented with lots of opportunities to develop alongside the organisation. It then becomes the chief exec’s responsibility to engineer ‘healthy’ growth — i.e, ensuring that the company is expanding in a sustainable and productive way, both from a business and from a cultural perspective. After all, if the CEO doesn’t develop, nor will their business. Ultimately, great teams flourish when they can rely on great leadership, and that’s what I will try to give to Signal as the company continues to grow. All I know right now is that it’s definitely going to be exciting.
If you have any comments or feedback, please let us know at firstname.lastname@example.org. Thanks!
Originally published at signal.uk.com on March 31, 2015.