Dec 102014

Dr. Earl R. Smith II

Most of my early-stage advisory engagements initially focus on helping the ‘CEO’ understand what it means to be a CEO. That understanding – or lack thereof – can have a determining impact on a company’s future.


Within the dim and fading mists of the history of every start-up lies the seed of its own destruction … or at least of its own stunted growth. As errors go, this ‘myth of fingerprints’ is one of the most frequent misunderstandings of what a growing company needs and what will happen if it does not get what it needs.

BookCoverImageLet’s start with a general description. A founder and a few small team members are running a company. They are successful in getting the thing off the ground by hard work and very long hours. The team’s dedication and persistence is paying off … the company is growing. The Founder adopts the title CEO (sometimes CEO and President, which I have always found a bit much or, worse yet, Chairman and CEO) and becomes the ‘Chief of Everything’. The rest of the team are similarly blessed with high sounding titles right out of larger corporate culture. The chief recruiter is given the title Vice President of Human Resources. The controller becomes the Chief Financial Officer. There may even be a CIO or CTO in a company running less than $5,000,000 in annual revenue. Quite often there is no Chief Operating Officer (COO). I have never encountered a team with a Chief Administrative Officer … even the title CAO.

So what’s the problem Chief? Well, there are two. The first, and a subject of a later column, is that people get titles far beyond their experiences, capabilities and competencies … and that creates real problems later on. The second, and my focus here, is that the job description for the CEO as ‘Chief of Everything’ becomes inherently limiting of the company’s future. Here is a way that you, CEO, might understand what I am getting at. Let’s take a quick trip into the realm of complexity theory for a fresh, and possibly liberating, view of the landscape.

Find some quiet time for reflection … sit down in your most comfortable chair … clear your mind of the day-to-day minutia … then try to see your Company as a complex self-organizing system … a living thing with its own needs independent of yours … in other words your ‘child’. Then introduce the idea that ‘organizations evolve more quickly than the people in them’. Your child is evolving more quickly than you, as its parent, are capable of changing to meet its needs.

Here are some of the problems that your child might be having with you.

  • The Personality Cult and its corrosive effects … if its all about you then …
  • The Peter Pan Syndrome … if you won’t grow up then …
  • The Napoleonic Complex … if it is all about your vision then …

There are good reasons why the CEO has evolved into the Chief Business Development Officer in successful privately owned companies. Very good reasons why that person has to distance themselves from the day to day operations … delegating those responsibilities to first a COO and then a CAO. And this means that a CEO has to decide to be a CEO and stop being a COO. If a CEO does not see or accept these reasons, most often the effect is to limit the growth of the company … for filling these needs is central to that growth and the CEO is the only one to do it.

The CEO has to manage the evolution of the team … make the hard decisions. For example, some of the people who got you to the early successes are not those who will help you take the Company to a sixty or one hundred million dollar run rate.

In short, a CEO has to put personal evolution on the fast track … and get that evolution mostly right … in order to help the Company to realize its potential. But how do you learn what you have never directly experienced? How does a CEO gather the wisdom? The solution is as hard to manage as it is simple to state. You get yourself a network of mentors … individuals who have climbed the mountain you are seeking to conquer. But how? Here is one recipe that I have seen work well.

  • First find an individual with a long track record of success and develop a close personal relationship
  • Make sure that the track record includes multiple successes in the CEO role. In other words, avoid the ‘they that can’t do teach’ trap
  • Engage that person in a highly formal way … introduce them into your corporate culture
  • Ask that person to assemble an Advisory Board of mentors in various areas … sales, marketing, operations, etc.
  • Then use the combined wisdom and experience of the Board as both a guide and accelerator of your own development.

Green_Vest__1ATwo pieces of advice here. First, don’t try to build the Board yourself. If you do, you will most likely take the easy way out and build a ‘soft’ Board that will not challenge you. Second, clear the time to interact with and learn from the Board members. It will take far more time that you initially think. To have an Advisory Board is not the same as benefiting from one. I have seen many that essentially do nothing and are paid for it.

The lesson here is clear. A CEO must run to keep up with the evolving needs of the Company. Failure means that your child will end up digging ditches instead of moving mountains.

© Dr. Earl R. Smith II

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