Subscribe to Inc. magazine
LEAD

New CEO? You Are Probably Doing It All Wrong

There is one trait every CEO must have or build to be successful. And that runs counter to every bone in your body.
Advertisement

The first personality that most CEOs develop is the collaborative, "make everyone happy" style of managing. Win-win is the core tenet of this approach. Your thoughts are that a happy team is a productive team, and you look for opportunities to reinforce these moments.

This style has its merit and is an easy on-ramp as you build out your CEO muscles. But these are mere training wheels to what you will need for real success. A great CEO has many tools in her toolbox, and you will have to develop new tools along the way.

One of the negative byproducts of the "collaborative" approach is that the flow is all one-way. If you break down this approach to its foundational core--it is you listening and reacting. Each decision is based on pulling the team closer to your vision and each one of these decisions creates opportunities for you to reduce the friction needed to get there.

For example, for months you have been recruiting this rock star who will forever change the velocity of the company, and now you make him an offer to join your team, and await his response. He comes back with a counteroffer strongly demanding a drastic change to your options plan. Your first instinct is to begin negotiating to find some middle ground.

Another example is developing a key alliance. This data behemoth is a real company with hundreds of millions in revenue, and you are negotiating a critical license deal with it. You already have its competitors in the fold, but they are making some outlandish demands. As a small four-person company, you feel you need to find some middle ground and negotiate your way to the end. The trick is that if your competitors find out you gave better terms, you are screwed.

What do you do?

I don't care whether you think CEOs are born or made. I do know that at some point in your CEO journey you are going to have to find your backbone. Growing a CEO backbone changes the flow from reactive to proactive.

This was excellently covered in Ben Horowitz's last blog post, which really gets to the backbone point:

The key to breaking the cycle is to stop feeling pressure and to start applying it.

Turn the recruiting dilemma around and apply pressure back to him. "We appreciate your interest in joining our team but there are no exceptions to our options plan and all of us are operating in this manner in regard to this plan. If you feel the need to have better terms than other team members, I don't think this is the place for you."

"Mr. License partner, we are rolling out our service next month with or without you. We really would enjoy having your data as part of our service, but not at the expense of a healthy business partnership. If you would like to enjoy the same terms as everyone else--fantastic! If not, we are happy to provide our millions of customers access to all of your competitors' listings."

There is something that comes with age besides sore joints and gray hair: a body of experience. My partner and I at The Startup Factory invest and mentor seed stage founders in their recently launched startup companies. Finding your CEO backbone is one of the critical steps to both personal and company success.

Last updated: Jul 24, 2014

CHRIS HEIVLY | Columnist | Managing Director

Chris Heivly was a co-founder of MapQuest (which sold to AOL for $1.2 billion), sole managing director of 77 Capital (a $25 million venture fund), and an executive at five software companies. Currently, he is one of two managing directors of The Startup Factory, a seed investment fund making 10 to 14 new investments per year. A national writer and speaker about startups and startup communities, Heivly is also the founder of the Big Top Job Fair.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: