While they may share the same title, not all CEOs are created equal.
Whether the company is a startup or entering its second century of business, every organization needs a CEO with the skills and expertise to accomplish its specific goals.
High-growth companies face their own unique set of challenges and require a leader capable of navigating the rocky waters that expanding businesses inevitably experience. Whether it be managing cash flow, anticipating new opportunities ahead, nurturing a company culture, or building a leadership team, CEOs of high-growth companies are critical to the organization’s overall success.
As a growth equity investor, I partner with CEOs and talented management teams at high-growth technology companies. I’ve witnessed firsthand the challenges and growing pains that CEOs face each day and what it takes to tackle them and ultimately succeed. Based on my experience, below is a set of effective tactics practiced by some of the most successful growth-stage CEOs I’ve worked with.
Know your strengths and embrace your weaknesses
Employees look to the CEO as their leader, and decisions and actions that take place at the top ultimately trickle down. By definition, entrepreneurs have a healthy ego—a belief that they can execute better than their competitors or succeed where others have not. A confident leader of high-growth businesses provides a sense that the company is in stable and capable hands, but preserving humility is equally important. Humility can serve as a recognition of seeing things for the first time and this directly impacts the way a CEO responds to new and unforeseen challenges. Without it, a CEO might easily misjudge a market opportunity or get surprised by a competitive threat having discounted or dismissed the capabilities of a competitor.
Build then leverage the team around you
CEOs of high-growth companies have a greater chance at success if they take the time to strategically surround themselves with talented management teams and strong boards to challenge and enhance their thinking. When we evaluate a new company, we look carefully at the dynamics of the management team. Is there a deep bench of independent thinkers and peers to the CEO? Does the Board have a full range of expertise, perspectives, and networks? Both lead to diversity of thought and better financial outcomes. At times, the CEO role can be the loneliest job in the world – bombarded with requests and decisions from all sides and at the end of the day, the CEO has ultimate accountability. Those who leverage the experiences of the trusted teams around them will make better-informed decisions.
Inspire a culture of trust
Once the right team is in place, the CEO has to set the right culture. While some of the more common aspects of a positive culture might include work/life balance, competitive benefits, and open communication, there is more to it than that. One of the most important attributes a CEO can have is to trust their employees. In my personal experience, I’ve seen CEOs struggle with giving up portions of control, which can be very damaging to growth. Top employees will not stick around long in environments where they are not empowered, and culturally, the organization will be slow to react, evolve, and grow. Culture needs to be regularly monitored and evaluated. For example, we are investors in, and frequent users of, an employee experience management platform called Energage. We use their products internally and across the portfolio to enhance company culture, measure employee engagement, and cultivate dynamic professional development programs. These tools allow a CEO to conduct an honest, independent assessment of the organization and tailor strategy as a result.
In a high-growth environment, things change drastically in as little as a few months. It’s essential to constantly step back and reassess. This means looking at everything from infrastructure and process to the staff itself. For example, what worked to get the company from $2 million in revenue to $10 million, may actually inhibit your ability to go from $10 million to $50 million. Change is often necessary, and a good leader must have the knowledge and willingness to know when to make the tough decisions.
I continue to be inspired by the opportunity to work with CEOs from some of the most exciting and inventive technology companies across the country. Every day, these CEOs face a new set of challenges, complexity, and scale where nothing is static and tough decisions must be made frequently. These leaders must stay nimble, while sticking to what has made them successful thus far. Their leadership can be the single factor that makes or breaks the future of the business.