To be a successful CEO, you should have innate personal power, and leadership should be in your nature. Yes, certain skills of leadership can be learned, or refined, but you should want to lead, and leading should feel like an integral part of your “being in the world.”
Your qualities of leadership (combined with your personal power) reveal themselves to you in many ways:
You have a vision and clarity of purpose. Others see you as having some secret magic that they want to share. You thrill at being the director of your own destiny, and at the opportunity to make the next new thing. You are exuberant in your energy as you move towards the fulfillment of your vision, and this reads as charisma to others, and makes them follow you.
You make the tough decisions, the ones that make others join up with you, and even the ones that cause you or others grief (personally or professionally). For example, you may need to remove a close friend from your startup team during year 2, after extensive commitment from the friend, when that person no longer is a significant contributor to the future of the company. Or, you must choose to accept or reject an influx of needed capital based on deal terms that may change the direction of your company.
You see the larger picture of your company, its place in the market, your place in the company, and your team’s effectiveness to reach the company’s goals. Despite your feelings about what your new company can do, realism must inform your decisions about issues such as: how significant is your company in the marketplace? Would anything change in the market if your company disappeared? What is your team’s true ability to reach the company’s goals? What is your own ability to lead your team and the company to those goals? This realism that sees the larger view may lead you to changes in your capital needs, in the configuration of your team, and in your willingness to accept new deals or change the company’s direction.
You determine the fate of others. No way around it, if you are the boss, you determine what you will demand of your team in terms of performance, hours worked, time free for other priorities, compensation and employment, now and in the future. You set boundaries and expectations on your self, your company, your advisors and your team members.
You create (and change) the culture for your team and your company in the early stages, and outside pressures will move that culture, usually from one of openness to one of more segmentation within the ranks of employees as the company grows. Information that was openly shared with the original team will be kept private as outside investors commit funds, as larger decisions need to be made, and as “time-to-decision” becomes a critical factor to moving the company forward. These changes will require you to change your early culture, with or without disclosing these changes to folks who have been with you in previous phases.
You make judgments about opportunities, people, their actions, your actions. Some of the first judgments will be about control. Do you share control with your founding teammates, because they are sharing your risk? What if they are sharing some of the risk, but none of the capital risk? Is it equal then? Do you use stock ownership as the basis for control, or do you isolate control for yourself (if you are taking the majority of risk) or share it with a small executive board? And when new owners and capital investors arrive, how does that control shift? These decisions must be made early on, with an eye to the larger view mentioned above.
You are willing and comfortable engaging directly with conflict – from your team, your investors, your competitors, and from larger economic forces. As CEO, your founding members may want more than is reasonable for their risk long after they have been committing that risk, or will resist a change in control (however rational). Competitors may tell lies about you or your company to gain an edge, or will undercut your pricing, or distort your positioning or undermine your distribution channels. Larger economic forces may demand you change your revenue model, capital strategy and other plans that will disrupt the understandings of reward and future gain you have established with your team and your investors. You must not be conflict-averse, but must directly deal with any and all of these occurrences, knowing the best time and way to confront the conflict and to uphold the choices you make as CEO.
From these judgments and conflicts, you make decisions, right or wrong, usually under tight time constraints. From these decisions, you must be strong enough to live with their consequences. This may mean your wrong judgment costs you the company, or certain key staff members, or long-standing friends and partners, or the capital committed by family and friends. To mention nothing of lawsuits.
You accept a certain unique isolation, because the buck stops with you, because very few around you can understand the pressures you experience every day, and because to lead is to carry the burden of these responsibilities, consequences and isolation. I have often worked with CEOs who began our initial conversations with, “I don’t have anybody who can understand what I need to do and help me make the decisions I need to make.”
Many powerful people with strong traits of leadership still should not necessarily lead a new company. These would include those folks whose natures move them to avoid conflict; those who prefer to be advisors who are supportive of leaders; those who prefer collaboration to the isolation and judgments necessary for leadership; and specialists whose best contribution is a narrow niche of expertise for use by the team. Others offer their best service by following directives and working closely in teams to move the company ahead.
Leadership is exciting and dynamic and stressful and not for everyone. Understanding what you must do to lead a new company as its CEO is critical to its success, and yours.