I often talk with young entrepreneurs who are struggling to raise money to keep their startup going. They are typically high achievers who have never failed at anything in their life. I often joke that running out of money isn’t failing: Failing is raising $100 million and turning it into $0. The funny part about capital is that having too much can be a problem just like not having enough, as Seth Levine says in this blog post. There is an optimum amount of capital for pursuing a given market opportunity. If the market is still developing, then additional capital is often wasted – or even worse: It causes the company to lose focus and pursue many different markets. The CEO’s job is to provide the right amount of capital at the right time.
Lululemon CEO Christine Day Is Stepping Down There are many different ways a CEO can lose his or her job, and in this case it looks like quality control was the driving issue (the retailer had to recall 17% of its black luon yoga pants for being too sheer). I don’t know Christine Day, but […]
Do You Publish Your Board Book To Your Entire Company? In this recent blog post, Brad Feld revealed his benchmark for CEO transparency: Sharing the information you give to your board (usually quarterly) with your entire company. He says, “If you can’t be open with your company about the information you report to your board, […]
The National Business Research Institute (NBRI) researched common themes across 20 of the highest profile CEOs to create this interesting infographic:
People often say that entrepreneurs who start out as CEO will need to be replaced at some point with a “professional” CEO. The thought is that the entrepreneur won’t be able to scale as the business grows. I think this is the wrong way to think about the situation. Yes, there are many entrepreneurs who […]
If the Boss Rides a Harley, He Must Be Human In this great interview with The New York Times for its latest “Corner Office” column, NIC CEO Harry Herington says riding his Harley to company meetings brought him closer to his employees. How? He says it humanized him, because his employees started to know him in a whole […]
First thing I want to ask you about: Tell me about your results. I never get hard work confused with success. So I’d walk you through the successes, and what did you do right. I’d also ask you to tell me about your failures. And that’s something people make a tremendous mistake on. First, all […]
Open-plan offices make employees less productive, less happy, and more likely to get sick Earlier this week I published a post asking “Are your employees misaligned?” where I cited a story about our acquiring company plucking software developers from their private offices and stuffing them into 6′x6′ cubes. This article from Quartz.com cites lots of studies […]
Last week I discussed the concept of implying too much precision in a business model. I also see a similar error when people plan their careers. Often they analyze and study every possible nuance of a new job or career decision when they would be better served by simplifying the decision. Twitter CEO Dick Costolo recently […]
The quest to know all the answers down to the last decimal place sometimes gives people a false sense of surety. My dad – who taught engineering at Louisiana Tech University – was one of those university professors who students feared. This was partly because he often took points off students’ papers for things they […]
This is a great article in Harvard Business Review about how unbridled optimism can be detrimental to employees. Especially for a CEO, being too optimistic can make employees think you don’t understand their challenges, you are being dishonest, and/or that you don’t have a grasp on reality. I covered the drawbacks of a CEO who is too optimistic in my Cheerleader CEO Fail post.
Here is an interesting infographic Salesforce.com published on its blog about How to Motivate Your Employees, with the main message that money is not the top motivator. This is a topic I’ll keep covering along with employee engagement, because they are integral to ensuring high performance in companies. Late last year I discussed Daniel Pink’s outstanding TED presentation on The Puzzle of Motivation, which goes into more detail about how intrinsic motivators are more effective than extrinsic ones. I highly recommend his book also: Drive: The Surprising Truth about What Motivates Us
The answer is yes, and it’s more than anecdotal. Texas Enterprise shares the business and public policy knowledge created at The University of Texas at Austin and published an article recently detailing the research of assistant professor Cesare Fracassi, who studies executives’ social networks. He recently finished a nine-year study comparing the social ties between 30,860 executives at 2,059 companies to decisions those companies made, especially investment patterns. His conclusion in a nutshell:
“There is evidence that suggests that where the CEO and directors are more socially involved, the company is more profitable,” Fracassi says. “The information they receive helps the company to make the right decisions.”
Read the full article at TexasEnterprise.com
A recent headline in Bloomberg declared CA’s New CEO Jolting Old Guard With Silicon Valley Moxie. As someone who founded a company acquired by CA Technologies, I am very interested to see what changes new CEO Mike Gregoire will introduce there. After spending six months on the inside of CA, I was impressed with the […]
I often use sports analogies in my writing and teaching, and an article by Tony Schwartz of The Energy Project – fittingly titled The 6 Keys To Being Awesome At Everything – caught my eye as both a tennis player and a CEO veteran. Because performance in sports is so easily measured, we have made […]
I have just become a Forbes contributor and my site is aptly named The American CEO, where I give “practical advice for current and aspiring CEOs” much like I do in this blog. In my first article I write about why CEOs need to own their recruiting functions and provide 10 rules for how to manage them. I also recommend five tangible metrics for monitoring the performance of your recruiting organization, which have worked well for me. I invite you to visit my site and follow it as well as share my articles if you find them worthy. I’ll continue to post here regularly as well.
This infographic from CEO.com is a good depiction of why employee engagement matters. It is essential in driving a high-performance culture. In doing research for my book, I too have found that the more creative and intellectually challenging the work, the more employee engagement predicts performance in the work place. If your business depends more upon the intellect of your workers than their brawn, you will want to focus on employee engagement to maximize productivity. I’ll be writing more about this in upcoming posts.
I came across this Success Is a Squiggly Line diagram from Demetri Martin at Lifehacker.com. I love the message, because it accurately describes what a company goes through on the path to success. While I founded and successfully exited two companies to large returns for the team and investors, the path to success was anything but straight.
In an earlier post I described a board meeting where I recommended shutting down one of the companies after the events of 9/11 made it difficult to sell anything. I could tell you about another half a dozen times where I thought the companies would likely fail. As a CEO, you will rarely feel completely confident that your company is going to be a big success.
The phrase I use is paranoid optimism. I think that phrase captures the natural state that a good CEO adopts. There is a constant level of stress: The path to success has too many twist and turns to ever feel comfortable. Which is one reason I’m not desperate to jump right back into the CEO chair!
But I do believe that as a CEO you can set yourself up to be a good leader and make the best decisions possible at any given time, which is the reason I started this blog.
See also: Steering clear of other CEO’s mistakes
Judging talent and putting it to best use for both employee and organizational growth is one of a CEO’s most important responsibilities. One of my favorite stories about recognizing and employing a person’s unique talents (or not) comes from the 1984 Olympic basketball trials. The coach of the team was the legendary Bobby Knight, arguably […]
A recent article in Business Insider reported that Yahoo’s hiring process is taking so long that they are losing out on talented people (and aggravating their employee base). The culprit? CEO Marissa Mayer’s bureaucratic tendencies. I believe that CEOs should be as involved as they can in hiring, but the process described by Business Insider’s […]
Boy this is a strange one: Samsung recently announced that two of its presidents will assume co-CEO roles with current CEO Kwon Oh-hyun. Three CEOs. Since CEO stands for Chief Executive Officer, having three CEOs in one company is a little oxymoronic. I am a big believer in the need for having a single person responsible for the performance of an organization. Why? In practice, it is really difficult for the multiple CEO concept to work effectively. I understand why people feel like two or three heads must be better than one and that better decisions will result. I think those benefits can be obtained without the disadvantages of the multi-CEO structure by copying a practice from the military.
For example, in the U.S. Navy every commanding officer of a ship also has an executive officer who reports directly to him. All of the department heads report through the executive officer. This provides a training position for future commanding officers in addition to providing someone for the commanding officer to bounce ideas off of without compromising the chain of command. This can be accomplished in larger companies by putting a president in place between the CEO and the rest of the functional leaders. This way you gain the value of having multiple heads on a problem without clouding the question of who is responsible at the end of the day.
I was pleasantly surprised to find out that Facebook COO Sheryl Sandberg considers “Now, Discover Your Strengths” by Marcus Buckingham and Donald O. Clifton the best business book she has read in recent years. Not only that, she recently told The New York Times the book has been “instrumental” in how Facebook manages its employees. As […]
A CNNMoney/Fortune article today titled “Why the CEO-chair split matters” reports on how a group of union retirement funds believes that CEOs should not also serve as chairman of the board at their companies because it is a conflict of interest. Here’s my take on it. I understand why many people find it an appealing idea […]
People take various paths to get to the CEO chair, resulting from a mix of education, experience, and other factors. CEO.com recently published the following infographic - The Long Road to Becoming CEO - that sketches the demographics of S&P 500 and Fortune 500 CEOs. The variety of study and experience depicted speaks to the uniqueness of the CEO role: As I’ve mentioned before, the CEO position is so different that few people are prepared for it, no matter how well they’ve performed in other executive roles. I started this blog to help CEOs address this challenge.
One interesting fact to me as a former engineer is that the most common field of study for S&P 500 CEOs is engineering at 20% (yet the most common functions they come from are finance, operations, marketing, and sales). I recently discussed key considerations for engineers who want to become founders and CEOs.
Earlier this week I had the pleasure of hosting the Austin Technology Council’s first CEO Forum of the year at The Driskill Hotel here in Austin. As Chairman of the ATC, I am proud to help promote the growth and success of the Austin tech community. We had a distinguished group of executives in the […]