Challenges faced by CEOs in fast growing companies
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“There is just too much to do, I wish I had more than 24 hours in a day”. This is an oft-repeated line, which we hear CEOs repeat in forums, television programmes and on most occasions in private.
One often wonders if this is more of a ‘fad’, a statement to drive home the point that CEOs are a category of people who are busy and are busy stealing time most of the time to do more with less.
More often than not, we all believe that CEOs are in control of their destinies, their time and always end up doing things that they like doing. Which raises the larger question – do CEOs really get to make the choices that we think they can, especially where they are part of high growth organisations?
At a practical level, we all believe (and we should) that we are in control of our destinies. Our choices in life, decisions relating to companies we want to join, the type of role we want to get associated with, whom we want to get married with, what food we want to eat, what we want to wear etc seem like decisions of which we are always in control of. This is the way that we believe CEOs think or rather like to think that they are in control of the businesses they run/ manage, the people they hire, the investors they work with, the investments that they want to make etc.
If things happen exactly the way we plan, will life not be boring? Just like things are not static in life, things aren’t in companies and businesses and CEOs know this more than most, especially those running exciting, high growth companies. Life is football for them!
There are challenges, hits, misses, opportunities, joys, success, failures, separations; who does not face these? Do we not experience these in our lives? What separates a CEO living a ‘roller coaster’ life (high growth companies) vis-à-vis others, is their ability to enjoy these moments, understand that none of these moments are going to stay forever (whether its success or failure), to keep chipping away, have this realisation that this is an adrenaline that they have chosen to experience individually.
In high growth companies, CEOs possibly have larger roles to play since they end up filing the gaps left open by the existing team. Mind you, this is not a comment on the capability and energy of the existing teams; it is just a reflection of an unfinished agenda that is omnipresent in every high growth company that needs filling up.
Almost all high growth companies have a set of challenges that needs to get addressed starting with (a) Hiring and Retaining a good quality team (b) Investing in technology (c) Winning and retaining good quality clients (d) Challenge the Status Quo
(A) Hiring and Retaining a team: Getting people to see a path, a future that a CEO sees is to get the ‘right’ set of people to join the team. This is probably the most difficult aspect since this is intangible and is nothing but selling someone a dream.
People will join high growth companies not just for compensation or stock options or the corner office; people join you for what they see in the CEO and the trust and belief that they have that this would get translated into reality at some point in time.
CEOs of high growth companies irrespective of the stage (start up, mid sized) and maturity (average age) they are in have started recognizing this better. Again a good quality team is built not just on the basis of the functional/ technical competency one brings in; it is also about having diverse personality types who bring the right attitude required to succeed in that role.
Retention is again a function of how closely ‘engaged’ the CEO and the leadership team is with the team. It is true that CEOs cannot spend time on a daily basis with everyone across the company but the culture of ‘engagement’ that they build should allow a process of two way feedback, build an environment of trust and build platforms for people to know each other as individuals and not just as ‘co-workers’.
Needless to say, anything that is left out here for instance training doesn’t automatically indicate that it is not important; building an organization culture is a CEO role, training, performance management etc is only an offshoot.
(B) Investing in Technology: Often high growth companies move at such a fast pace that most things be left behind including the ability of a CEO to be able to track the business.
One of the sure shot ways of such companies falling by the wayside after having shown promise is that they are somewhere not able to keep pace with the initial momentum generated. This could be for several reasons but one of the reasons that companies are not able to keep up their initial pace is their inability to have defined the operations and business process into an IT system which will allow them to track the business.
In business, success sometimes has few reasons while failures have many (everyone analyses failures till the cows come home and often success is attributed to luck/hard work nothing beyond).
In today’s day and age, technology plays a vital role, as there is often a thin line between success and failure. Technology differs from one company to another, as minimum high growth companies should be looking to invest in CRM (sales), Operations, HR apart from Finance and Accounts. Integrating all the functions into one platform (or building a bridge) is even better. Sounds like we have heard this before?
(C) Focus on clients as if your life depends on them: “You can’ ask customers what they want and try to give that to them, by the time you get that built they will want something new” – Steve Jobs.
Pick the right customers, under promise, over service; deliver more for the value that is perceived. CEOs are invariably under pressure to deliver more sales, to improve profitability and demonstrate good financial performance. The heart of any business is the ability to pick the right customer for your business and to be able to retain them.
High growth businesses will realise that in their quest for growth, they cannot make decisions to close the wrong set of customers (these clients may give the company the revenues but not the cash flows, the profile of these companies may be iffy, they may take the company down with them etc) and then end up regretting later. The damage is already done, regrets wont help.
It may seem to the CEO that growth rates may slow down but then the solution is to be clear with the attributes, tightening the filters that one would look at while working with a potential customer. Once the right customers have been signed, work with them as if your existence depends on them.
(D) Challenge the Status Quo: Businesses don’t operate in isolation and in secure environments. Just like how there are seasons and as human beings we are impacted by the seasons, both people and external/internal environment around it impact businesses.
CEOs should embrace the thought process that business should be sensitive to its stakeholders, be it customers, regulations, market conditions, competition etc. CEOs of high growth companies should constantly challenge what they believe is ‘status quo’, consider even making changes to the business model if need be and look at the business ‘outside – in’. Easier said than done, this attribute to look from the outside and then taking ownership to fix/ implement changes within is what will define success of a CEO.
Success or failure is always defined through a ‘rear view’ mirror (after the event or over a period of time). Implementation is always the key, however, brilliant and unique the strategy may be. History always judges people and bestows ‘greatness’ after the completion of the event or a series of events (regardless of whether they are judged as success or failure).
CEOs and business leaders also need to remember this irrespective of the companies that they lead. Doing a series of small but high impact activities right consistently will determine the type of company that you end up building and the legacy that you leave behind.
"Leadership is not about titles, positions, or flow charts. It is about one life influencing another." John C. Maxwell.