Leadership Lessons I've Learned as CEO
I recently answered a question on Quora about the characteristics of great CEOs. While I consider myself far from being a member of that camp, I do feel that I have learned quite a few lessons that may be useful to young entrepreneurs or owners/managers of companies that are growing quickly. The hardest most challenging time for me, was moving past a dozen employees. It felt to me at that point that all of the things that helped me as a small business owner (willingness to roll up my sleeves, responding quickly to issues, etc.) were actually causing problems and impeding our company's growth.
Rather than focus on what not to do, here are the rules that I've learned:
- Support your people
- Provide vision
- Pay attention to cash
- Speak long term
- Don't say it unless it's 100% going to happen
1. Support your people. I don't have to be in every meeting, but if I do drop by it should never be to add "my two cents". I can show respect to the people that come by our office by introducing myself, asking a few surface-level questions, and then exiting after letting them know they are in good hands with the employees they are meeting with. It must be sincere, but you really should believe your people are great!
2. Provide vision. If the vision for your company over the next 5 years is to be the same company "but bigger" or "making more money", you need to do better. For me, my vision crystalized with reflection on what the exit strategy would be for me and for the individual members of my team. What would it say about them in 5 years to be associated with leading our company? Think about a company that provides amazing opportunity for your employees because of the amazing things that company is associated with and you'll be on the right track.
3. Pay attention to cash. Until you get a CFO, your fundamental responsibility lies with making sure you have enough cash to operate, make payroll AND support your planned growth. As a small business owner, your personal credit and business lines you establish with the bank are your company's life's blood. Whenever you are profitable, THAT is the time to go to the bank and establish credibility. If you head to the bank when you actually need money it will be too late. Another important thing to keep in mind with the bank is that your tax returns count way more than your P&L statement. Keep enough profit on your books at the end of the year to keep your margins up. It's not fun to pay taxes, but it is those tax payments that banks look to when judging your financial success.
4. Speak long term. As a company grows, it becomes more important that a CEO is perceived as slow and stable. By speaking about things using language like "over the next three quarters" or "Q1 of next year" employees can rest easy that they are part of an organization that is thinking about the future.
5. Don't say it unless it's 100% going to happen. I like to share things with people, even when they are in the nascent phase, and that's a behavior I've had to do away with as my company has grown. If there's a new employee coming onboard, don't share it with the whole team until the offer has been accepted. If you are thinking about buying something but you haven't put the cash aside for it, it hasn't happened yet. That big deal you are going to close, but the contract isn't signed yet doesn't really exist. Remember anytime you say something is going to happen, it should happen as close to 100% of the time as possible.