Wednesday, July 8, 2009
I attended The 2009 TAG/GRA Business Launch Competition Finals, hosted by IBM, where three high-tech start-up companies were competing for $100,000 in funding and another $200,000 in professional services. Prior to the finalists’ presentations, the audience had an opportunity to address questions to the judges’ panel made up of leaders of nationally recognized venture capital firms. One of the most interesting answers was in response to the question, “What characteristics do you look for in a start-up CEO?” It was no surprise the attributes they identified for the CEO of a start-up company are exactly the same as those for an owner of an established business. Take a look at these characteristics and see how you compare.
Ability to focus - In the day-to-day life of a business owner, it is easy to get distracted by the internal fire drills of the day, external market forces, and actions by your competitors, suppliers or customers. Before you know it, three, six, nine months go by, and you have failed to do any of the strategic actions you cited were necessary to keep your company on a growth path. The business owner’s ability to stay focused on those critical actions is paramount to any growing company.
Be disciplined with capital - Cash flow is the life-blood of any business. The tone for how cash is spent in a company starts with the business owner. Do you know where your cash is going? One test for fiscal discipline is to evaluate spending as a defendable direct charge to your customer. You may be amazed by the amount of money spent on non-value added activities and items.
Connect “outside” with “inside” - The ideal CEO is one who is able to connect internal developments and activities with the outside marketplace. They accomplish this by responsibly delegating internal roles so they have sufficient time to stay connected with their market and customers. It is all about balance.
Ability to recognize when additional management talent is needed - In the words of one veteran venture capitalist, “CEO’s are the biggest impediment to growth by failing to build out the right management team.” In these cases, the CEO either fails to acknowledge he needs help, or he makes bad hiring decisions. Failing to meet specific goals is one clear indicator that help is necessary. The latter can be addressed by having a well-written job description with specific performance expectations and qualifications.
Be coachable - As the business evolves, so must the leaders - especially the CEO. The first step here is to acknowledge you don’t have to be the expert in all fields; and second, there are folks out there with the experience and knowledge to advise you on new business processes and approaches for growing your business. How receptive are you to these two facts?
Transparency - no surprises - Garnering the confidence of investors, banks, board of directors and employees alike is critical to the long-term growth of a company. This confidence comes from backing your words with specific actions, ideally those consistent with a written plan, and disclosing early when critical milestones won’t be met with a plan for how you intend to recover. Surprising your employees or investors is a certain path for losing the essential support needed for growth.
Be nimble - Don’t be so caught up in your business model that you are unwilling to deviate from the plan when market forces are telling you that you should. History if full of examples where business owners insist the market will eventually come around to buying their product or service.
About the author: Mike Gomez is the President of Allegro Consulting, an Atlanta-based business growth specialty firm. Allegro provides operating advice to businesses and organizations on a wide range of management issues that effect growth, such as strategic and organizational planning, marketing, sales and business process improvement. www.AllegroConsultant.com