This post originally appeared at www.chrisamarks.com in 2013
I’ve written many times about the pace of start-ups and the challenges entrepreneurs face in building high-growth companies with limited resources. It is an environment of rapidly changing circumstances. Every day brings new hurdles, and every potential customer can be the lifeline that allows you to fight another day. In this environment, it can be very difficult to see the forest through the trees.
As many founders have discovered, however, reactionary management can only take a company so far. In fact, as companies grow, and day to day survival gives way to quarterly plans and annual budgets, reactionary management can easily become a company’s biggest threat to survival. The ability of a founder to make this realization, and move towards a bigger vision, can determine the fate of a company for years to come.
So how can it be done? There is no recipe for success, but here are a few things that I’ve seen help:
- Hire people who can fight the battles on your behalf. Early on, founders often scramble to hire people to support them in their role as CEO. Instead, they should be hiring people who they can support. Every hire should be better than the CEO at what they do. Otherwise, the CEO will feel obligated to stay on the front lines. The only way a CEO can focus on company alignment, strategy, and planning, is if he or she is confident that the generals on the field are winning the day to day battles.
- Never sacrifice the future for the short term win. Despite the pace, it is imperative to keep perspective and remember that building a business is a marathon — not a sprint. Hitting monthly and quarterly numbers, while important, is not the end game. The wins are Pyrrhic if they come at the expense of future success. Too often, I see management teams suffer from short term thinking. If one-off deals, pricing discounts, or customer promises are simply creating a deeper hole for next quarter, then you are not doing yourself any favors.
- Use your board of directors. Unlike the management team, the board is removed from the daily noise. They see the company’s progress on a monthly basis, and their guideposts are often annual budgets, sales pipelines and development roadmaps. As professional investors, they often work with several companies, and, as a result, have good perspective on the broader market. Tap into that knowledge. Use them as sounding boards. Test your ideas and theories, and, most importantly, listen to the feedback. If you are uncomfortable with this type of board communication, then you probably have the wrong board.
When a company is launched, a founder has one simple job: survival. As the company grows, the task requires more leadership and less elbow grease. It requires the founder to create a vision, sell the vision, and drive everyone in the company towards achieving that vision. In short, it requires the founder to become a CEO.