What are the most challenging aspects of becoming a CEO?
It’s constantly on the lookout for new members.
And it never gets any easier, at least not in the traditional sense. Every CEO I meet who has reached $2 million in annual revenue or more, whether they are a Unicorn, an IPO, or trying to figure out how to go to $5 million to $10 million in annual revenue… the pain is the same. Recruiting.
Over time, this is attracting more and more senior employees, and the target audience shifts accordingly.
However, it will never come to an end.
As your firm grows, you’ll begin to see attrition in your staff base of 15 percent or more every year as a result of natural attrition. It will take some time for it to happen, but it will eventually happen. Your management will take care of this, but it will take a lot of effort to support the procedures in this area merely to stay up with the pace.
Even your finest vice presidents will often desire to move on to something new after 4–5 years. That seems like it will last forever at first, but it won’t in the end. Several others will have to be surpassed. You’ll have to constantly recruit new members to keep up with demand.
What about your finest directors who aren’t being promoted to vice president? They’ll be moving on as well.
And people aren’t going to work out.
This implies that you are continually on the lookout for new employees. The larger you get, the more work you’ll have to accomplish here.
You’ll need to practice a lot to become proficient.
In search of a position of strength.
All of the company’s most valued personnel must be on the lookout for opportunities to gain advantage. According to Jason M. Lemkin, the answer to this issue is “recruiting,” which is an extremely critical component of the jigsaw… However, recruitment is merely one method of gaining power.
In the past, one of the most effective methods to gain leverage was to acquire and develop talent. And, although this will continue to be very essential in the future, we will see more CEOs focusing on acquiring the best suppliers possible. Suppliers are the building blocks of your company’s genetic make-up (there are no two companies that are the same).
In comparison to 10 years ago, most Fortune 500 firms now have ten times the number of suppliers that they did before. Despite this, the total number of workers at these same firms is around the same as the national average. As a result, vendor management has become more critical over time. As suppliers leverage not just the CEO, but also all staff, the market capitalization per employee is increasing substantially.
A vendor might be an API, an application, open-sourced technology, or any other external resource that you employ on a regular basis. More time is being spent with suppliers by CEOs and other high-value workers than at any previous moment in history, and we can anticipate this trend to continue.
Understanding vendor management, whether you are the CEO or an entry-level employee, will be very beneficial to your professional development and the profitability of your firm in the long run.
Early on in the development of our firm, I spoke with a Venture Capitalist. The VC glanced at me and said, “Well, you’re the CEO, so you have to deal with investors like me.” It was completely unexpected.
“And it’s for this reason that you obtain more stock than the other people.”
The venture capitalist was playing on the misconception that dealing with investors is the most difficult and time-consuming aspect of becoming a CEO. In one sense, the VC wasn’t completely incorrect, but he wasn’t quite correct either.
Dealing with investors can be a difficult and unpleasant affair, to be sure. I should know since I was personally acquainted with that agony all too well.
I’ve never had the impression that dealing with investors was something I didn’t want to be involved in. In truth, my mental process was rather straightforward.
I want to be the master of my own destiny, not someone else’s. As a result, I look forward to meeting with investors, dealing with investors, and fighting with investors.
Why would I want to subject myself to the agony of dealing with investors on my own initiative?
The simple answer is that I am in complete control of my own future as well as the fate of the firm. That is something I would not want anybody else to handle.
However, despite the fact that I had some difficulty in interacting with our investors, I never felt that it was something I was unwilling to do. And, to be really honest, engaging with investors didn’t require a significant lot of time until we were in the midst of a fund-raising campaign.
In addition, even while I was in fundraising mode, I knew that it was a necessary aspect of the work. As a result, I was always aggressive in my fundraising efforts.
I established contacts. I made a pitch. I threw all I had into our fundraising efforts and gave everything I had. And, believe it or not, I really loved the fundraising process!
Not all of it, however. I definitely didn’t hear any investors inform us that we were wrong.
But it was a lot of fun for me to raise money.
A surge of adrenaline is experienced when you make a pitch and establish a connection with your audience.
The following are the other ten things that are the most difficult aspects of being a startup CEO:
1. There is no such thing as a second off. You have to be available at all times.
I’m not saying that you shouldn’t take a vacation, but I am arguing that you should never, ever have a bad day in your job as a chief executive.
From the moment you step into your workplace until the moment you go to your bed at night, your colleagues are keeping an eye on you. Everything you do and say is being scrutinized and over scrutinized, literally everything you do and say.
Nothing is scrutinized more intensely than the decision to let someone leave. As a result of this…
2. You have to terminate people, and firing people is a terrible experience.
You’re going to make some bad hiring decisions. Furthermore, some of your cofounders are not going to be able to make it.
You owe it to your team, your investors, and yourself to fire the members of your team who aren’t performing well for you. In the event that you do not terminate those who are not performing, you will lose the really excellent members of your team.
That does not make dismissing employees any easier. And that doesn’t make terminating individuals a difficult or unpleasant experience.
People should be fired in a terrible manner. You’re having an impact on people’s lives.
Moreover, guess what? It is your responsibility if the individual did not work out since, after all, you were the one who recruited the individual.
As a result, when it comes time to terminate somebody, conduct yourself with dignity and elegance. Bend over backwards to avoid making the individual feel embarrassed.
Finally, always hold out hope that firing individuals will always be a bad idea. However, there is one thing worse than having to fire people: having to fire yourself.
3. You may be forced to lay off employees, and laying off employees is far worse than terminating an employee.
In the ancient phrase, “You may have to chop off a limb in order to save the body,” this is true. That, I believe, accurately characterizes the experience of laying somebody off.
Think about the notion of phantom pain for a moment. When your brain perceives pain from a physical component that is no longer there, you are experiencing phantom pain.
You would feel the anguish of letting individuals go because you couldn’t afford to retain them for a lengthy period of time (unless you are truly cruel), even after they have left the firm.
So that brings me to the next point…
4. There are always personnel concerns to deal with, which you must deal with. Always.
I believe that most of us enter the role of CEO with the idealistic expectation that you would spend your time thinking about the company’s strategy and closing large transactions. In other words, you’ll spend the majority of your time doing things you like.
It’s impossible to imagine something more far from the truth.
You find yourself spending a significant amount of time dealing with personnel concerns. And this is true even when working with a group of high achievers who get along well with one another.
The solution is that you must learn to appreciate the process of dealing with personnel concerns. Or, at the very least, you must be able to put up with personnel concerns. If you are unable to effectively handle people concerns, the role of CEO will consume you.
When it comes to personnel matters…
5. You will almost always be given a distorted image of what is really going on.
People will flatter you rather than give you the truth if they have anything to gain from it. One of the most difficult aspects of being a CEO is that you will have different people of your staff who will play to your ego in order to gain favor.
And what makes it much more difficult is that it feels wonderful when others play to your ego. And it’s at this point that arrogance might creep in.
6. Vendors will make the simplest mistakes possible, and you will be the victim of this.
I’ll give you an example. An email list from one of the most well-known periodicals in our field was “rented” to us.
We started by doing a test run with 3,000 names. And the outcomes were really positive.
When we realized the list of 300,000 people was going to be a hit, we were overjoyed! Based on the conversion rates from the test run, we anticipated a significant increase in the number of orders and sample requests.
I had additional staff prepared to assist with the sample requests so that we could complete them in a single day. After that, the auspicious day arrived, and our email was sent out as scheduled.
After that, nothing occurred. We saw a little increase in traffic, but received no requests for samples.
I phoned our public relations representative and requested her to contact the publisher on our behalf. She returned my phone call an hour later.
“Brett, you’re not going to believe this, but the publisher misplaced their list, so they attempted to rebuild it,” says the publisher.
What is the best way to misplace a list?
The idea is that your providers will make blunders at the most inconvenient of times. In addition, you must remain on top of them.
Don’t always go with the provider that offers the lowest price. Recall that quality counts, so sometimes paying a little higher price might really be a better value in the long run.
Vendors, vendors, vendors…
7. You will be approached by peddlers who will attempt to sell you products that aren’t really required to you.
A film producer left me a message one Friday afternoon, which I promptly returned. Are you a film producer? Yes, I’m a movie producer.
The fraud proceeded in the following manner. I’m from the XYZ production business, and we’re interested in doing a 15-minute documentary on your firm.
I returned the producer’s phone call. The interest shown by XYZ in making the documentary was genuine. It turned out there was only one problem….
The $50,000 in production expenses must be covered, according to the team.
That was the conclusion of the discussion.
A year later, I got a virtually similar phone call from another production business, which had the same same pitch as the first. How many of these con artists are there in the world?
In fact, there are too numerous to count.
You’re going to be contacted by someone who wants to sell you something that you don’t need. It’s a given that it will happen. Just make sure your BS detector is turned on.
In addition, while interacting with consumers, you will want your BS detector due to the following reasons:
In order to achieve what they want from their present providers, clients will utilize you as a leverage point, according to H.
You’re finally ready to snag that important client who will completely transform your business. The issue, which you are not aware of, is that the client is using you as leverage to get a better deal from an existing vendor.
There’s no disputing that you’ll lose some significant business opportunities. The most effective strategy to prevent losing these important clients is to establish excellent working ties with top management.
The stronger the bond you build, the more likely it is that you will get the contract.
Mistakes are unavoidable in business. And one of the errors you are most likely to make is to forget about your strategy, thus…
I. You’ll need to notify your team that you’ve deviated from the original strategy.
What our Chairman of the Board told a prospective investor will remain in my memory forever.