Turn Me Into a CEO
QAfter 13 years in PR, I left my job to start my own company. What are the skills I need to become a CEO in more than name?
The CEO is sometimes described as a company's biggest cheerleader -- so in that sense your job hasn't changed much. Realistically, though, the complexities of running a business dwarf those of promoting one. You get points right off for recognizing that morphing from an employee into an employer involves more than changing the final e to an r.
Start the transition by taking down from your wall those framed employee-appreciation awards. CEOs seek validation from profits and happy customers, not from a proud boss. Hang in their place a poster board on which you've inscribed a single word: strategy. "If you can do only one thing, set and maintain a strategy for the company," says Matt Bowen, president and CEO of Aloft Group, a 28-employee advertising agency in Newburyport, Massachusetts, that had billings of $12 million in 2007. At first, Bowen assumed the title of chief strategy officer to remind him of his new priorities. The strategy he devised was ambitious: Distinguish the business with an unusual mix of services and international reach. To achieve those goals, he forged a partnership with a European marketing firm, added product development capabilities, and created an educational arm to help clients jump-start creativity. Bowen learned a lot about strategy by hanging with other strategizers -- specifically, members of the Entrepreneurs' Organization. Many industry associations sponsor peer groups. You can also create your own by contacting the leaders of noncompetitive companies.
Next to that strategy poster, hang a second sign of equal size that reads people. Employees have only their own smarts; CEOs draw on the cumulative smarts of their work forces. That means you have to hire the right people, and then create an environment in which they can thrive. Both are major challenges, even for experienced CEOs. Toby Gadd, president of Montage Graphics, a $1.5 million marketing firm in Fort Collins, Colorado, used to hire only novices; his chief criterion was whether their personalities fit Montage's culture. No skills? No problem. He would simply train the hires. As the company grew, however, Gadd realized he no longer had the time. He now hires for existing skills and professional background and checks references prodigiously. Once people are on staff, he leaves them alone. "They enjoy being left to their own devices," he says. "My job becomes more and more about enabling them to do their jobs -- providing them with enough money to live, time to do their jobs, and the knowledge and training."
Strategy and people are the concerns of leadership. And that's what you are now: a leader. But the lofty title doesn't excuse you from dealing with brass tacks. "I really do believe one of the biggest reasons companies fail is because the CEO lacks financial skills," says Bowen. If you don't have a solid understanding of income statements and balance sheets, take a few classes. Trade association workshops will give you the basics, as well as industry-specific financial ratios that require monitoring. And don't forget to make that sign reading financials. You know what to do with it.
Q I run a jewelry design business out of my home. My pieces have been featured in Vogue China and URB Magazine and in a music video for the hip-hop artist Eve, and my online sales are up. I'm ready to hire my first employee to take over some of the administrative work and help with production. What do I need to know? What are my legal obligations?
Dirty Librarian Chains
Brooklyn, New York
Juggling too many orders is a good problem to have. Now, let's think about all the problems that could pop up once you're big enough to hire an employee. The first thing you should know is that New York can be tough on employers. In some states you can hire up to four employees before workers' compensation requirements kick in. In New York, however, one is the magic number, even if that employee is part time. New York is also one of six states that mandate short-term disability insurance in case employees -- even part timers -- are hurt while off duty.
Once you're confident that you're prepared to handle the legal issues, think about what you want in an assistant. You don't want to hire a budding jewelry designer, only to see her take your list of suppliers and set up a competing shop, warns Jennifer Perkins, owner of Naughty Secretary Club, a jewelry and accessories line. To avoid that, many people in the jewelry industry ask their assistants to sign noncompete agreements, Perkins says. She also suggests looking for an assistant well versed in other handy skills, like knowledge of Photoshop or HTML. "I was paying a graphic designer a huge fee to work on my site," she says. "My assistant did it on the clock for me, and it was equally fantastic."