Author David Hugo Hargreaves Growth Guru at The Growth Hub: A family man and walker of the family dogs
Founding and growing a fast growth company is probably one of the hardest things anyone could ever do, and the most challenging part about it is that nobody has done your job ever before! (or so you think).
To help me stay centred, I’ve condensed my main responsibilities into six bullet points that remind me of my principle obligations at The Growth Hub. I keep these six points in a big framed poster in my office, so whenever I question whether I am neglecting any key responsibility, I just look at my list and make sure I feel that everything is in balance.
1. Cash flow
This one is a no-brainer. If you run out of money, then you have no business to operate. It is the CEO’s job to oversee the management of revenue, expenses and external financing to maintain the consistent growth of the business. Even a strong CFO (if you have one) still needs to answer to the CEO’s ultimate guidance on cash flow-related matters. We have a CFO at The Growth Hub and we brought ours on within months of start up. We took a Part time CFO at first and we recommend this to most clients.
It should also be noted that a prerequisite for effective cash flow management is a solid metrics-driven corporate culture to start with. Without a reliable and comprehensive picture of the company’s metrics, a CEO won’t know how to pull the right levers to affect revenue and expenses, and he or she won’t be able to successfully communicate growth opportunities to potential new investors.
You will of course need a CFO to create the metrics in the first place because it’s a complex job!
Your team needs to continually feel clear and excited about where the company is headed. It is your responsibility to regularly refine your company’s product vision as a result of frequent interactions with your customers. A monthly all-hands meeting is a great setting to remind your team that you know what you’re doing.
Employees tend to need at least a few months of clarity — and at least a year or two of general “direction” — to remain excited about their job. Remember that a huge amount of people’s job satisfaction is derived from the perception that their work will provide a strong contribution to the team’s objectives and even more importantly, has meaning.
The CEO has to understand and communicate the values of the business and to ensure that the whole team understand the values. Everything about this company, especially the culture, depend on a consistent set of values that everyone can believe in. HR need to buy into these because values are a vital part of recruitment.
4. Team building
We always tell clients looking for an investor that VC’S and other investors are looking for five things in a startup: People, product, people, market and people. Without the right captains leading the ships, there’s little chance they’ll continue traveling in the right direction and will sink sooner rather than later
A great CEO is constantly questioning whether the right people are in the right places. Do any roles need to be re-organised? Are any bad apples affecting the performance of the rest of the team? How did we recruit a bad apple?? Do people like their jobs? Do we need to have a corporate team-building retreat…? Do we need to create any new vacancies?
Continually optimising for team fit is a difficult activity, but it pays off exponentially as you put the right people in the right places.
5. Investor and lender management
The moment your startup first takes outside capital, you suddenly have a new boss: your shareholders and lenders. This only becomes more poignant as you continue to source further funding for your business. Keeping your investors and funders informed, helpful and happy is one of the most underrated things that CEOs can do to improve their chances of success.
A good CEO knows the right frequency and nature of updates to send to each tier of investor and funder. As CEO you will have a list of existing investors skill sets, so he or she can remember to ask people for favours at the right times. And he or she never let more than two weeks go by without at least a phone call to each of the investors, even if there is little to report. Do not just rely on email!!!
Gaining the respect and enthusiasm of your investors increases the amount that these advocates will evangelise your company in their respective circles of influence. Your investors can be your greatest salespeople if you leverage them correctly.
6. Brand Management
Building and maintaining a strong brand is a product of thought leadership and relationship management activities. These activities are easy to neglect but can dramatically increase your credibility in the eyes of your market and increase the value of your enterprise.
To build a strong brand, you must be proactive and generous with your time. That’s why you cant afford to have a ‘day job’ within the business. You may need to speak at industry events, do favours for colleagues, write blog posts, become active on Twitter or send handwritten notes to your top customers, partners or co-workers. Only you can decide what brand you want to project and how confidently you want to project it.
Over time, time spent expanding your profile and fostering personal investments will be well worth the investment.
7. Corporate Development
When you are heads-down working on your product and team, it is easy to forget about managing your company’s place in your overall industry. There could be big opportunities available if you were only having the right conversations. For example, should you be partnering with other firms in your space? Preparing for a future acquisition? Looking for small acquisition opportunities of your own?
Continually researching and connecting with the key players in your market and associated areas will help you pave the way for a successful exit. Most successful acquisitions are the result of ongoing conversations between the startup and the acquirer, often for years. The more relationships you have with the key players in your industry — including big companies, law firms, accountants and investors — the more successfully you’ll be able to navigate an eventual exit.
Naturally, there are many more random activities that a CEO must undertake on a daily basis. But if you aren’t tackling the above six areas of responsibility, then your company will have a hard time succeeding.
The Growth Hub helps high growth companies to grow even faster, make more profits, increase their value and to ensure that the founders build their wealth during the lifetime of the business not just at the point of sale. All the while retaining their sanity!
Author David Hugo Hargreaves the Growth Guru at The Growth Hub.