Growing into the CEO Role

Every CEO that exists was once a first-time CEO, and no one offers a training class to prepare for being a startup CEO. At some level, everyone taking on the CEO mantle must learn and grow their way into fulfilling the demands of this role.

Crazy as it may sound, as a teenager ~40 years ago, I dreamed of becoming a CEO someday. I do not remember if I had an accurate perception of the role; however, as a kid, I was already demonstrating native leadership skills as I could often be found “taking over” groups of kids. It was instinctive to identify a goal for the group and then organize them accordingly. I was attracted to business topics like finance and loved to go tour factories and other businesses. In high school, my jobs were programming computers, helping in a residential real estate office, and working in a mortgage brokerage firm. Perhaps there is something to the idea that some aspects of gravitating to the CEO role we are born with. However, beyond just having a workable mix of personality traits, there is a ton to learn as one grows into the role. Twenty years after I printed CEO for the first time on a business card, I am still learning and growing.

I remember when I first adopted the CEO title, a VC I knew told me I wasn’t qualified for the role and recommended that I recruit an experienced CEO to lead the startup I had just co-founded. As I thought about it, I recognized that every experienced CEO was once a first-time CEO. If only experienced CEOs could lead startups, we would eventually run out of CEO. “No,” I thought, “there had to be a way to take the experiences and skills I already had developed in the first phases of my career and translate them into this new role.” I rejected the VC’s snap advice (although he eventually invested in three of my startups) – and just began the hard work of figuring out what I did not know as I built my startup.

Recently I have been reminded of how one must grow into the role of a CEO as I have been coaching several first-time startup founder-CEOs as they each build on their unique set of experiences, skills, and personality traits to grow into this challenging role that they have taken on. Here are a few essential elements that CEOs of whatever background need to become proficient in on their journey to effective leadership of a high-potential startup:

• CEOs cast a vision and usually become the defining face of the startup. Ultimately, someone has to decide what the contours and elements of the startup’s vision are – and then consistently and effectively share that with others internally and externally. This requires a willingness and ability to be the spokesperson for the company, to decide what is consistent with the vision in the moment and articulate what that means clearly, and finally, to be the one who takes the spotlight when something goes wrong to get started down the path of fixing it.

• CEOs are leaders who can recruit followers. Leaders come in many flavors. However, I think anyone considering taking on the CEO mantle should have been building and demonstrating their leadership skills in various situations before tackling being a CEO. The CEO role is a lonely one – so it pays to have had a chance to work out some leadership blocking and tackling skills before stepping into the limelight of the CEO job.
  
  The defining demonstration of leadership skills is the ability to recruit followers. In a startup, followers can take many forms, including co-founders, other team members, potential customers, investors, and other stakeholders. When I see an aspiring CEO who cannot recruit followers, I know that person likely should not have that role. Often, this ability to recruit others to coalesce around a vision for the startup is one of the pivotal signs of future success – and is certainly something to look for as a startup emerges out of nothing.

• CEOs must develop essential knowledge in the broad set of functional elements of a business sufficient to be effective and confident in their own decision-making. While good CEOs will figure out how to build a comprehensive team and leverage others’ skills and insights, the job often demands discerning a path through the fog of uncertainty and making big bets on strategic direction. Even as they leverage their team, a CEO must develop a well-rounded awareness of the significant functional components of their business. To make wise decisions, they must be able to quickly absorb new information, synthesize its implications, and commit to a course of action. An inability to confidently make the hard decisions that need to be made will cripple a startup. This is another one of those skill sets that prospective CEOs should already be honing before they take on this job – and then they need to become ever more proficient at it in a much broader set of scenarios.
  
  
• CEOs must be able to build and prune a comprehensive team. It takes diverse functional and technical expertise to grow a startup. CEOs ultimately are responsible for recruiting a startup’s resources (a.k.a. the team) and sometimes must make the hard decisions to move on from relationships that are not working now or do not scale well to the next stage. Successfully doing this requires understanding the balance of the skillsets needed to construct an effective company at each stage of development, effectively recruiting the necessary functional leaders to grow the organization, and managing the inevitable complexity of leading people.
  
  
• CEOs must develop essential legal, financial, and fundraising knowledge. While a CEO should secure the support of legal and financial specialists, an effective CEO must build their own base of knowledge to navigate the legal, financial, and fundraising worlds effectively. Knowing how to read financial statements and forecasts, navigate cap tables, understand corporate and contract law essentials, and understand the structure and documentation of fundraising rounds are essential skills required for a CEO to be able to raise money, work with investors, and make some of the most pivotal strategic decisions for the startup.
  
  
• CEOs must lead and manage their Board of Directors and other investors. A Board of Directors expects the CEO, as the primary operator of the business, to take the lead on strategically managing the business and engaging the Board. CEOs are also the primary person the investors are putting their trust in. CEOs must learn about how to navigate these relationships and inspire confidence.
  
  
• CEOs have a role often envied by those who have never held it, but they are missing the bigger picture. Most of those executives who have worked with me most closely will ultimately admit that, having seen the endless responsibility and constraints that frame the CEO role; they do not want it for themselves. The idea that the CEO’s role is only one of great power, the potential for wealth, and prestige is an illusion because it comes with a sword of Damocles hanging over one’s head. As explained in this NPR story, the sword of Damocles is a moral parable, not just the threat of something terrible happening. As Professor Mendelsohn explains, the parable is about realizing that what looks like an enviable life, a life of wealth, a life of power, a life of luxury is, in fact, fraught with anxiety, terror, and possibly death.
  
  
• CEOs must be able to learn quickly and well and must be capable of continuously developing their own skills.  They do not have a boss to lean on. That can and probably does mean seeking out other CEOs to learn from. It can also mean learning in new functional areas, figuring out how to engage and leverage experts, and a never-ending focus on self-development to meet the demands facing the startup. While prior experience as a CEO certainly helps, I do not believe I have ever met a startup CEO, no matter how experienced, who is not continuing to expand their knowledge and skills. It is essential to keep seeking out and learning everything you do not already know – and learning how to integrate and collaborate with those intelligent people you recruit to your team who bring depth in certain areas to the table.
  

People with the passion, drive, determination, and willingness to serve as the CEO of a startup are rare, and there is no perfect training pathway to developing the skills required for success. If you feel inclined to take the plunge, do it!  Then, build on what you have already mastered to curate the broad, balanced set of skills that, combined with your native personality, enables you to step into the crucible of startup CEO and keep learning, learning, learning even as you walk through the fire. And since each startup has unique aspects, time and experience on multiple startups will layer up that skill base until you acquire the breadth of skills required to do the job. Along the way, reach out a hand and help others on the same journey since this is a peer-taught process.