A word (or two) to the first-time CEO
December 24, 2014 at 10:57 AM
My father is a wise man. He once shared an expression with me that has remained at the forefront of my thoughts with every company I join: A fish always rots from the head. In other words, whatever a company’s successes, failures, or dysfunctions, they stem from the top. Show me a CEO and I’ll tell you exactly how a company is run and how its culture reflects it.
The CEO can single-handedly define the culture of a company. How he behaves, reacts, composes himself - even in the seemingly least noticeable of moments, the passing comments he makes, the way in which he interacts with employees, the level of empowerment he bestows on his people, the importance placed on accountability, performance, efficiency, and communication, all of it defines him. Since it’s inevitable that the CEO’s conduct will permeate every crevice of the organization entrusted to him, in effect he or she defines the culture of that company.
The industry may dictate the pace at which a company runs, but the culture is the CEO’s domain. And while the economic climate may affect financial success, which may in turn impact the spirit and motivation of employees (especially when difficult and unpopular decisions have to be made), it is the actions of the CEO in those moments that are most impactful. And CEO behaviour does not have any less of an impact simply because a company is profitable. Profitability may allow a CEO and his employees to breathe easier, but it does not de-couple the relationship between the CEO’s behavior and that company’s culture.
Let’s look at how that CEO, maybe you, stepped into the role:
- A vice president at a large company does not a CEO at a small company make - necessarily.
I don’t know who conjured up the idea that a lower position in a large company automatically qualifies you to handle a more senior position at a smaller one. Responsibilities aren’t diminished at a smaller company. In fact, they are sometimes broader. So you were a VP before. You had P&L responsibility, you had a staff of over 100, you reported into a senior VP or an executive VP, or even the CEO. But were you ever directly responsible for shareholder value? How about the bottom line of the entire business or defining the company culture? Remember that reporting into a Board of Directors or a long line of investors is a much more daunting responsibility than you’ve likely ever had. All eyes are on you, including those of employees. It’s now up to you to both concoct the Kool-Aid and get them to drink it.
- You were already working for the company and were promoted to CEO:
I know - you’re still the same person you were yesterday, the day before you became CEO. How could it be that different? But it is. Because the reality is, while you may be the same person, you are now occupying a completely different role. And what employees see is a CEO, not you. What you say in the halls will get repeated everywhere. What you shared with some employees before, you’ll want to think twice about before sharing today. In as much as you trust those employees, you may now want to shelter them from the whole truth. You may have been the VP of Sales or the CFO yesterday, but today, you are the CEO. Remember it every day before you step foot in the office. Your responsibility to the company is greater now than it ever has been.
- You’re a founder:
Ok, so you created a company from scratch. It’s your baby. You know what’s best. Perhaps. While you weren’t parachuted into the role, much of what is written above applies to you. You may have handpicked many of your employees and know them really well, but remember to draw the line at being their friend. Perhaps you try to foster the illusion of being their friend? If you can master that distinction, more power to you. But never forget that you have a responsibility to lead them. And shelter them.
The greatest advice you can heed as a founder, for as difficult as it may be, is to remove emotions from the decisions you make. Not realistic? Then temper them as much as possible and find that one person on whom you can rely to keep you in check. Oh, and know when to recognize that your company is now a real company and not the fledgling start-up you launched a few of years ago. Your leadership tactics will need to change.
If you accept the challenge of becoming a CEO, no matter how you assumed the role, remember to surround yourself with the best of the best, not yes men who will make you feel like a king. Kingdoms sometimes topple. Or get overthrown.
Know your strengths and weaknesses. Don’t try to run all aspects of the business; that’s what you have a management team for – assuming you built the right team. The right team will be comprised of competent people who will have the courage to tell you the things you don’t want to hear – in the moments you least want to hear them. Lose the ego and learn to appreciate – and act on - their input. Without them, you will never really know what’s going on at the core of your company, because everyone else will be too afraid to give it to you straight. People tell you what they think you want to hear. And if you think you can distinguish between the two, think again.
Knowing whom to trust, knowing when to make difficult decisions, learning to make those decisions void of your emotional attachment to an idea or individual, how you treat your assets, and the image you portray, are all critical to your long-term success and to the company’s. The culture you create, deliberately or otherwise, will have an immense impact on your company’s ability to attract, retain, and harness employees.
Yes, it’s lonely at the top. Make sure you are ready for the spotlight.
Strategic Business and Human Resources Advisor