What A CEO Does (continued)

Last week's MBA Mondays post on What A CEO Does was a huge hit. Matt Blumberg, who is one of the finest CEOs I've had the pleasure of working with, wrote a follow-up post on the topic for his blog. I asked him if I could run it as a guest post here on MBA Mondays and he agreed.

So, here's a bit more on What A CEO Does:


What Does a CEO Do, Anyway?

Fred has a great post up last week in his MBA Mondays series caled “What a CEO Does.“  His three things are set vision/strategy and communicate broadly, recruit/hire/retain top talent, and make sure there’s enough cash in the bank.

It’s great advice.  These three are core job responsibilities of any CEO, probably of any company, any size.  I’d like to build on that premise by adding two other dimensions to the list.

First, three corollaries – one for each of the three responsibilities Fred outlines.

    •    Setting vision and strategy are key…but in order to do that, the CEO must remember the principle of NIHITO (Nothing Interesting Happens in the Office) and must spend time in-market.  Get to know competitors well.  Spend time with customers and channel partners.  Actively work industry associations.  Walk the floor at conferences.  Understand what the substitute products are (not just direct competition).

    •    Recruiting and retaining top talent are pay-to-play…but you have to go well beyond the standards and basics here.  You have to be personally involved in as much of the process as you can – it’s not about delegating it to HR.  I find that fostering all-hands engagement is a CEO-led initiative.  Regularly conduct random roundtables of 6-10 employees.  Send your Board reports to ALL (redact what you must) and make your all-hands meetings Q&A instead of status updates.  Hold a CEO Council every time you have a tough decision to make and want a cross-section of opinions.

    •    Making sure there’s enough cash in the bank keeps the lights on…but managing a handful of financial metrics in concert with each other is what really makes the engine hum.  A lot of cash with a lot of debt is a poor position to be in.  Looking at recognized revenue when you really need to focus on bookings is shortsighted.  Managing operating losses as your burn/runway proxy when you have huge looming CapEx needs is a problem.

Second, three behaviors a CEO has to embody in order to be successful – this goes beyond the job description into key competencies.

    •    Don’t be a bottleneck.  You don’t have to be an Inbox-Zero nut, but you do need to make sure you don’t have people in the company chronically waiting on you before they can take their next actions on projects.  Otherwise, you lose all the leverage you have in hiring a team.

    •    Run great meetings.  Meetings are a company’s most expensive endeavors.  10 people around a table for an hour is a lot of salary expense!  Make sure your meetings are as short as possible, as actionable as possible, and as interesting as possible.  Don’t hold a meeting when an email or 5-minute recorded message will suffice.  Don’t hold a weekly standing meeting when it can be biweekly.  Vary the tempo of your meetings to match their purpose – the same staff group can have a weekly with one agenda, a monthly with a different agenda, and a quarterly with a different agenda.

    •    Keep yourself fresh…Join a CEO peer group.  Work with an executive coach.  Read business literature (blogs, books, magazines) like mad and apply your learnings.  Exercise regularly.  Don’t neglect your family or your hobbies.  Keep the bulk of your weekends, and at least one two-week vacation each year, sacrosanct and unplugged.

There are a million other things to do, or that you need to do well…but this is a good starting point for success.

#MBA Mondays

Comments (Archived):

  1. fredwilson

    great post Matti loved these parts:- get out of the office and into the market- don’t delegate hiring and retention to HR- run great meetings- don’t neglect your family and hobbiesthanks so much for a great follow up

    1. Carl Rahn Griffith

      – don’t neglect your family and hobbiesReally resonates right now – our 17 year old nephew suddenly died late last Thursday evening, whilst playing basketball. Lovely lad, great potential.We’re all heartbroken and whilst I have a ton of things to do business-wise, these are a low priority right now. The family’s grief/support comes first.Trying to gradually re-engage my brain into business-mode, but it’s not easy.Family is everything.RIP, Jordan. XX.

      1. Tereza

        Carl my condolences to you and your family. Very sad.

      2. Tereza

        Carl my condolences to you and your family. Very sad.

      3. RichardF

        really sorry to hear that Carl. My condolences.

      4. ShanaC

        I’m so sorry for your loss. Take whatever time you need

      5. fredwilson

        that is horrible news Carli am saddened by this newsmy thoughts are with you and your family

      6. Donna Brewington White

        Sincere condolences, Carl.What happens during this tender time is very important. You are wise in your priorities.My thoughts and prayers are with your family.

      7. JLM

        At times like this words fail us all. Please accept my condolences at your loss.

  2. Chris Mottes

    Great advice.I’ve found in particular that being hands-on in recruiting is the only real way of instilling the culture you want in the company in the long term. Once you start creating departments, your dept heads need to be making their own hires, but I still do all the recruiting legwork for them and make a point of meeting every serious potential hire for a coffee during their second interview. Head of HR has always been the last key hire I’ve made when growing companies, usually around 50-70 employees. At that point, you should have set the tone of the company culture that will grow on it’s own from there on; and everyone in a key position should understand how to represent your company to potential recruits (interviewees will be your best ambassadors in the local or international the job pool, whether you hire them or not).

    1. fredwilson

      i think the 50-70 level is a great yardstick for hiring a head of HR

      1. ShanaC

        You should have donna write that post.

        1. fredwilson

          great ideai don’t think i can do guest posts every MBA Mondayi wonder what the optimal mix is

          1. RichardF

            I’d say you’ve got more scope within MBA Mondays for guest posts to cover areas you are not so familiar with.optimal mix: 7 parts Fred to 1 part guest. It’ll give you a neutral ph value 😉

          2. fredwilson

            ok, then that’s what we’ll dono more than one per month (we may have violated that with matt and keenan)ideally one every two months

          3. Alex Murphy

            In my opinion, it really depends on topics and expertise. This post is terrific. If every post was this good, then your mix could be more guest posts. Just don’t “try” to expand, let it happen, and let it only happen with top notch quality writers who have really been there.

          4. Donna Brewington White

            Personally, I like the uncontrived way in which the guest posts have emerged, sort of rising up out of the community discussion. However, even if not, I think we all trust you enough to know you wouldn’t post something you couldn’t stand behind — or at least the person writing it.Once every couple of months feels like a good balance — and given the limited number, makes it clear that there must be a compelling reason. If it is occasionally more frequent and of the quality of Matt’s and Keenan’s posts, I can’t imagine you’ll get complaints — even if that mattered. Besides, with this group, if someone wants to share something, it’s going to get said. As you know, AVC is home to a number of comment bloggers. 😉

          5. ShanaC

            I wouldn’t mind that, I’m missing some of the more “heavier material”

          6. William Mougayar

            Ask us about suggestions.Have you done one on Board of Advisors?

          7. fredwilson

            good suggestion William

          8. Tereza

            I’d like that.Also I’m interested in VC definitions of Competitors.I have a classic marketers definition: companies/products your customers may turn to instead of using you. (and I include Substitutes in this defnition).I’m finding VCs are very fast and loose in their definition of “Competitors”. I have made a career out of scrutinizing competitors and actively competing and their definitions frequently do not jive with me.I guess it’s that, for an investment, they’re picking a single ‘play’ within a movement. For example, ‘mobile social shopping’. Or something where people post pictures. There are a million different business that can be created in those categories that are totally not competitive to each other, vis-a-vis customers and revenue, or anything to do with the operating business.I care about this as I decide which VCs to approach and who has ‘competitive’ investments. Twice I heard my business was ‘competitive’ but based on what their portfolio co was doing I don’t see them as competitive at all….except that they were already in something that at first blush sounded vaguely similar.I’m really interested in Fred’s take on this from the VC perspective.

          9. Carl Rahn Griffith

            I’ve done SWOT stuff for years and this is a fascinating topic.Certainly, the ‘traditional’ SWOT approach needs revising to be truly relevant nowadays but one can learn an awful lot about the market/competitors/one’s own venture by undertaking such a process.For me, ‘competitors’ set a benchmark – for one to exceed.

        2. Donna Brewington White

          haha…just happened to be glancing through and caught this. Thanks for the vote of confidence, Shana!

          1. ShanaC

            You’re welcome!

    2. Donna Brewington White

      I see that you “get it” in that there is a strong marketing element to recruiting both in terms of how it’s done and in terms of the results– this is further multiplied when your applicant pool can also represent your consumer or customer base.I think that the timing of hiring a head of HR depends on what you intend the role of HR to be and how consultative a role you want the person to have. For instance there is a huge difference between partnering with the CEO to strategically shape the culture and to help build the leadership team as opposed to being hired on to maintain a culture that has already been established. It also might depend on how seamless you want your internal culture to be with your marketing brand or if you want to intentionally establish an employment brand.

  3. DonRyan

    I am at the end of a full-on week of vacation (out of office messages and no emails/phone calls). It has been an awesome recharging of my batteries. Spent great time with the kids and my wife. Agreed that these need to be sacrosanct.

  4. ShanaC

    I like the line about knowing where your cash is. it’s understanding deeply how your business works.

  5. reece

    really awesome post, Matt. priceless advice for CEO’s.the phrase that always sticks out in my mind is “setting the tone.” in college, that was my coach asking the seniors to “set the tone” for practice.it’s abstract direction and it varies by situation, but if you set the right tone for a meeting, your customer service practices, or the company in general – the results are fantastic.

    1. fredwilson

      great title for a CEO’s blog or even a book

      1. Dan Sweet

        The next step as the organization grows is to ensure Matt’s three points also get lived out by the rest of the company’s senior leaders. Great meetings, no bottlenecks, and a culture of learning. If a senior executive is allowed to fail consistently in anyone of these areas, it can undo a lot of great work by the CEO.

      2. reece

        i’ll add that to my list of working titles. 😉

      3. howardlindzon

        i am on that book…let’s do it. It worked last time…

    2. Mark Essel

      Setting the tone is like the melody, while seeding the culture with early hires is the bass line or rhythm. You begin as vocalist or instrumentalist and grow into a conductor.I’m not following the best advice I keep hearing. First hand interviews with garage sale hosts and shoppers. Just warming up with my social signals, the yard sale twitter list. A topical search within Disqus comments would be nice to reveal the most engaging garage sale blogs. I mentioned some analytics/search tools that would be valued by small and large businesses interested in growing communication with customers/users/visitors on Disqus’ analytics blog post.Something like Techmeme’s DataSift (Nick Halstead) would be a value multiplier on comments. Datamining Disqus’ databases would be a fantastic opportunity. Sweet data.

      1. Tereza

        Mark can you find professional/semi-prof garage sale hosts and offer them service for free and you get to sir along side them and tweak your product per their feedback?Alright spin it may be more ‘estate sales’ in affluent areas. Can you find some local estate planning attorneys with clients who have to liquidate grandma’s house FAST?

    3. JLM

      Don’t just set it, live it.

      1. reece

        Good clarification.Setting the tone means doing it – not just talking about it.

      2. reece

        Good clarification.Setting the tone means doing it – not just talking about it.

      3. reece

        Good clarification.Setting the tone means doing it – not just talking about it.

  6. GlennKelman

    Love it. The first post on this topic read like an aphorism, reminding folks to be strategic. It was fantastic, but it didn’t answer how a CEO actually spent his time from hour to hour. This gets closer to that. To ReeceP’s point about setting the tone, I would add — not that I always manage this — your job as chief motivator and cheerleader: smile a lot, say “good job” a lot, communicate a lot, listen a lot, fire toxic people & politicians quickly, call BS on lame efforts, apologize when you screw up, find a way to make things work.Some folks think of our job in only cerebral terms but there’s a huge emotional component. How a company feels oozes from the walls the moment anyone steps in to the office, and that starts from the top.

    1. fredwilson

      what a great conversationthese threads sound almost like the CEO support group that Matt suggests

      1. MartinEdic

        We started one three years ago here in Rochester. Invitation only, no vendors or professional services, founders/owners/CEOs/Presidents only, growth companies that are not primarily local businesses, only start-ups whose founder(s) have a successful previous business. We meet quarterly for cocktails with no agenda. A financial services firm foots the bill but does not get to present or pitch. It is a peer group, that’s why we are so restrictive- it actually makes the experience a lot more valuable.190 people on our list, average attendance around 75. And it is fun! And the value is incredible. RochesterGrowth on LinkedIn Groups…

      2. Peter Beddows

        Great deal of truth in that observation Fred. Ultimately perhaps even a book distilling the finer points from a sequence of topic related blogs here.

    2. reece

      totally agree with the “emotional component” of companies.not easy to manage, but absolutely essential to keep a positive tone without being fake.

    3. Tereza

      When my mom needed to ramp up a Mary Kay business fast, she listened to lots of tapes in the car about how to sell. Since I was in the back, I heard them all.Mary Kay herself instructed, as she saw this as the core to her business. She said: sandwich each piece of feedback between two pieces of praise.My children’s school similarly instructs its radioactive toddlers using the philosophy of “Three Compliments and a Wish”. Tell the child three specific things they accomplished, thereby acknowledging that you noticed. Then tell them what you want to see next. The teachers walk the talk by using this internally between the teachers, who are learning their craft too. The place oozes “continuous improvement”. It is critical to acknowledge and reinforce the behavior you see that you like, which you want to continue. You can never praise that stuff too much, as long as you are being specific. The recipient does not ever grow tired of your acknowledging what they accomplished.Similar but related, in strategy consulting, which is a constant-improvement zone since we were always under the gun, I was taught, “Praise publicly, criticize privately”. This is really powerful. It builds trust. Most people want to do a really great job. Give them a chance to. Criticize behind close doors, and be very specific, and paint a clear picture of what you want. Then let them go out and do it. Everyone wants to save face.By the way, this works great with children, too. And marriage. You can get incredible mileage out of praising a lot and being very specific in what you want. They try to do it, because they believe it will garner more praise. And then you must deliver it!If you haven’t read this you must. Applies to all. It’s from 2006 called “What Shamu Taught Me About a Happy Marriage”http://www.nytimes.com/2006/06/25/fashion/25love.html

      1. GlennKelman

        That Shamu article has long been one of my absolute faves…

        1. Tereza

          I was so glad you made me think of it because it’s all so true — and I laugh every time!

      2. Peter Beddows

        The more of your comment posts that I read, the more that I believe you are wise beyond your years Tereza.

        1. Tereza

          Pshaw…Thanks, Peter!

      3. ShanaC

        I love that Shamu articlePraise for actions is critical. It’s a make or break thing with most people. It, sometimes more than money itself, can push people to perform better, depending on what the praise is. Praising actions is highly efficient because it gets at the root of us as social animals- we like knowing what we are doing is all right, and we like the reinforcement.Money doesn’t perform nearly as well as praise in the right situations. Choose praise.

        1. Tereza

          Yes. It’s also important to remember that the praise must be specific. “you did XYZ and I really like that and it’s important to me because…”. Stick to the facts.Praise that is overly broad, not related to action or meaningless is actually counterproductive. E.g. “Good girl!” or “You’re so smart!”.It qualifies a state if being rather than a desires action. Praise based on action empowers and tools. Overly broad praise can lead to entitled attitude, laziness, or a feeling of being overwhelmed by expectation.That said, “I like you” or “You’re fantastic” or for my kids, “I love you” must be said frequently. Separate the praise/feedback from your emotional feelings. Then they feel confident your feelings about them are not contingent on the action, and they have room to try new things.The goal is people do the right thing because there is intrinsic value in it. That’s much of the magic of Shamu.

  7. Les McKeown

    “Managing operating losses as your burn/runway proxy when you have huge looming CapEx needs is a problem”…ah yes, I remember it well.Nice to have a shiver-up-my-spine reminder on Labor Day. Thanks, Fred and Matt for this.Fred, you’re going to put MBA Mondays out as a book / ebook / pdf / sumfink in due course, yes?

  8. johnmccarthy

    Good, practical advice.I think that your comment about debt (“A lot of cash with a lot of debt is a poor position to be in”) should be tempered, as there are many situations where taking on debt can be preferred (no pun intended) over selling equity.

  9. Scott Barnett

    Great post Matt. I particularly liked “don’t be a bottleneck”. I’ve always run with the motto that it’s better to ask forgiveness than permission – however, I’ve found most people don’t do this! They want/need/crave permission – this could be the biggest impediment to progress. Make sure your team knows it’s ok to make mistakes and to iterate, as long as they are keeping the relevant people in the loop.I also appreciate the two weeks unplugged, but have not been able to figure that one out. I’ll keep trying…

  10. Nancy

    Love the idea that a good CEO works with a coach (of course I would — I am one). Too often CEO’s think they are supposed to already know all the answers. But the best have someone they trust to challenge them, to help them see what they don’t want to see, help them avoid blind spots and habits that are easy but not effective

  11. Andrew Greene

    I would say that the CEO must use the product religiously. Be a true product evangelist.

  12. Tereza

    Awesome post by Matt.I’m really encouraged that Matt’s framework is stuff I’ve been trying to do. I’m not saying i’ve mastered it. But I’m trying.Re: NIHITO, I couldn’t agree more. Create and nurture relationships so you hear about market happenings first. Your team/employees can’t do that, they’re in the office busy doing the work you already agree upon. Have to be a panther for market info. And every convo you’re refining your pitch and evangelizing.Re: don’t be a bottleneck. So critical, and a daily challenge. Some days it works great. Other days much tougher because you need that quiet time to think, and it’s hard to come by. Right now we’re planning a call this evening where he’s taking me through a list of pending decisions to power through. Our job is to maximize our people’s time working productively.My best advice on how to optimize is coming from other CEOs and my coach. Peer CEOs can really spell it out in brass tacks.

  13. andyidsinga

    I love the NIHITO part – so true for anyone who wants to stay fresh, curious and creative!

  14. Jim Goodlett

    Matt (and Fred), smarting further discuss on the role of a CEO…one more to add to the “Recruiting and retaining top talent” is something I work into our yearly schedule – that of doing 3 to 5 INFOxCHANGE sessions a year to give my teams learned experiences that can advance their skills and thought processes outside of the company’s strategic directives.INFOxCHANGE stands for ‘Information Exchange’ and ‘Information Times Change’…In terms of the former, I bring in an outside company in similar or different verticals (Morris Technology is a tech company servicing the media space) and in a one day session, both our teams and the outside company teams will discuss products (products can be both an app or a service), processes and tools…they will also exchange trials and tribulations along the way, including what was done to resolve issues, which allows both groups to be able to learn at speed like they went to work for the company.The ‘Information Times Change’ part has to do with asking my teams to come away with at least one process or tool that can advance our ability to get better products to market faster. This also coincides with perfecting the storied pitch and gives the teams needed time to assess the value of what they do, what they build, and the services they provide, while the market shifts and shakes in new directions.

    1. fredwilson

      i really like the “times change” stuffi am going to pass that one on to our companiesthanks!

  15. William Mougayar

    Great follow-on. I might add that a CEO must constantly ask themselves “Am I leading vs. Am I managing”? Especially for startups, managing only won’t propel the company forward, and the risk is you could be doing all these things well, but you’re just managing.

    1. Tereza

      That’s a great question.

    2. Alex Murphy

      The best way to get to that answer is are the people that work for me “following me” or are they “doing what they’re told?”

      1. William Mougayar

        Yes, that’s a good validation point-but a good CEO has to get both done.

  16. John Fox

    Couldn’t disagree with anything. All very sound advice, especially your point about getting out of the office to meet customers and competitors.But can you (or anyone) name 5 CEO’s who habitually practice what you recommend? And I don’t mean you’ve read about it somewhere. Name CEO’s you personally know who really do ALL 3 things? (Press conferences and other staged events don’t count, btw.).I can’t name one.

    1. Tereza

      Hard to find them, bc they’re not in the office!I’ve worked for a number of CEOs or senior execs like that. And it’s really fun.I don’t think they meet with competitors, though. They meet with customers, prospects, suppliers and potential partners, to stoke the fires with them AND learn what’s going on with competitors.Kind of counterproductive to meet with competitors, though. That’s usually left to facilitated industry meetings, or fundraisers/awards dinners.

    2. fredwilson

      Matt does all of these thingsi know that for a fact

    3. Alex Murphy

      In my experience, nobody is perfect. If someone did everything here and the “everything else” too, they would be perfect. We all make mistakes. The best CEOs tend to be the ones that know that these are the things they want to do and they are working towards doing as many of them everyday as they can. Kudos to them.

  17. maverickny

    I love the NIHITO concept, it reminds me of one of the best managers I ever worked for (he’s now very senior in a big multi-national Pharma corporation).His personal take on the concept was MWA or Management by Walking Around. He hated MBAs and used to instruct and encourage me (it was my very first job after academia) to get up and find out what was going on in all levels of the organisation, build relationships, go to big trade shows, find out what the competition was doing, especially what the customers (physicians) thought of the drugs in the relevant market and so on. Even to this day I unconsciously still do this as a consultant when taking on a new client, you learn a tremendous amount in the field compared to the office.

  18. Eric Marcoullier

    One question I’ve been meaning to ask is how a non-technical CEO can best take part in the hiring of developers.In the past I’ve completely delegated tech hires to my CTO and that not achieved awesome results. Any ideas on how to become a part of the process without undercutting CTO?

    1. Toshi O.

      I’m kind of surprised this doesnt have any comments – I would def like to have more insight into this as well.At the very least, the CTO can screen for knowledge and skill set, but both could hire for culture or quality.

      1. Peter Beddows


      2. fredwilson

        i would have replied if i had good advice for ericbut i don’t

    2. Alex Murphy

      Eric, this is a great question. I went from 100% biz side to also running the tech side and then back and forth over the last several companies. I think the place to get started is to be clear up front with the interviewee that you don’t know anything about what they do “technically,” and that they need to prove to you that they do. Start with basic code concepts, move to server settings, move to DNS, etc. Have the CTO sit in to help fill in the gaps for you so you do a two on one in the beginning, but try to get to the point where you understand the basics enough so as to not have the CTO around. Have them show you their code, read their level of passion, their desire to do a good job, and how you think they will fit in with your company culture. Have your CTO determine their competence, but make sure that you know how well they fit. Come up with some kind of small widget for them to build. With all of the APIs that are out there today, you could get them to program a really simple Android App, or a Facebook tool, or something to interact with Twitter, then pay them for it. Get them to show you the source code. Basically, start small and then build up from there.

      1. Eric Marcoullier

        This is fab advice. Given that I do directly interface with all the devs, it makes perfect sense to have candidates “explain what they do” as a tryout for getting hired. If they can’t get me to to where I understand them at a high level, we are unlikely to have good communication down the line.Thanks!

        1. Tereza


    3. Donna Brewington White

      Eric — I don’t want to be redundant with what Alex and Toshi have already said because they’ve raised excellent points and Alex’s advice seems really sound. However, just like with any field, hiring people with the right technical (or marketing or sales or financial) knowledge/skills while incredibly important is only one piece of what makes a great fit. I’ve noticed that in companies where the CEO feels that a certain group is so totally “other” that he/she doesn’t get involved (such as hiring creative types), the co. ends up with another subculture within the overall culture. Matt said this earlier and I don’t think tech hiring is an exception: The CEO needs to be involved. Obviously, the level and degree of involvement will change as the company grows and depending on how far removed the reporting relationship is from the CEO. Involvement can mean “setting the tone” for recruiting — borrowing from Reece’s earlier comment. If you change the rules for tech hiring, then you are sending a message about tech hiring that can create a wrong perception of its relative importance — and that can go one way or the other.If your tech hires are at a completely different success rate than other hires in the company, then it seems that there is a disconnect in the recruiting/hiring process. Whatever is being done to achieve successful hires in other parts of the company needs to also be translated into your tech hiring. How to be involved without undercutting? Make it a standard practice throughout the company that you as CEO will help “set the tone” for hiring. Personally, I hope this will be a collaborative effort in which you lead the exec or leadership team in establishing some hiring standards that you all agree to — having to do with your company values, the type of culture you are creating and what has worked in the past — and these are translated into your requirements while recruiting. I always like to collaborate with the client on a list of non-negotiables when I embark on a recruiting assignment — so that there is a clear understanding of where we draw the line (or I know I must present a really strong argument for deviating). Also, even for technical hiring, the rule of thumb in recruiting holds true: The past is the best predictor of the future.

      1. Tereza

        Donna what are some specific actionable best practices you’ve seen of a CEO “setting the tone” which we may want to try out?

        1. Eric Marcoullier


        2. Donna Brewington White

          Tereza — This is an excellent question (you are good at that) and one that I need to give some thought in order to articulate succinctly. (Wish I had Fred’s gift for brevity.) Now, just to find the time, but I think it would be worthwhile.Meanwhile, I did some work with a company that to this day fascinates me — Cranium, the game company — when it was still run by its founders Richard Tait and Whit Alexander.Interestingly, even though not a tech company, Cranium reminded me a lot of tech companies — the founders were ex-Microsoft. I am not presenting Cranium as a perfect example, but they did a lot of the right things right — and were very intentional about hiring and “setting the tone” albeit in a unique way that fit their product space.Here is the post that I wrote about this. I warn you, it is long. http://bit.ly/d63XfP

          1. Tereza

            Can’t wait to read, Donna.Case studies are helpful. Then the magic is answering the question, “How do I put this into practice in my company?”

      2. Peter Beddows

        Very well and clearly stated Donna. You also “demonstrate” herein by your observations how bringing someone like yourself into the recruitment process as an experienced consultant could be enormously beneficial, even invaluable to the C level individuals who would otherwise not be well equipped to make good choices for the team and/or the business.

  19. paramendra

    Very informative. Very helpful.

  20. Kyle Pearson

    I think I learn more reading here weekly than I do during a semester of biz school…

  21. Gorilla44

    As a biomedical CEO with no products on the market for a few years, raising capital is by far my most important job. #2 is project management/strategy to make sure that what I raise is enough to hit the next value-increasing milestone.Probably 66% of my time and thoughts revolve around raising capital for any current round and laying the groundwork for future rounds – meeting with angels, VCs, and potential corporate partners/acquirers.The other 33% is divided by project management, hiring, etc.

    1. calabs

      “As a biomedical CEO with no products on the market for a few years”That is incredibly ambiguous. What does it mean, that you’ve stopped releasing products, or that you haven’t released any yet and won’t for a few years? How could value increase if you’re not making anything?

      1. Gorilla44

        We are in preclinical testing now with our first product. We will start human clinical trials next year.In the medical device or drug development business, you can create tons of value by advancing your product closer to FDA approval. Many exits come before a product reaches market. For example, when you have demonstrated human efficacy in a clinical trial, your valuation can be 10-20x what it was before that clinical trial.I have no plans to build a salesforce or anything like that. My goal is to advance our product through Ph 2 of clinical trials (when you demonstrate efficacy) and then sell the company to a big pharma.

    2. RichardF

      I’m surprised that you don’t put managing cash flow higher on the list. Are you outsourcing most of your pre-clinical studies?

    3. kagilandam

      Absolutely agree with you on this… managing cash is almost 90% of the work of a CEO from medical/bio-medical field. You cannot see your first customer before 3-4 years.It is not only about producing the best product …the hell of the problems lies with all the approvals you have to go through. FDA/CE/UL/ISO/ etc.,etc., all becomes a must here…where as it is a “like to have” features in other business lines.I am saying this as we are also sailing similar same boat … it is our 3-year and still struggling with the product stability and certification and clinical results.Good luck with your clinical2.0. We are into x-ray systems. what r u up to Gorilla44 – (funny name to call but i don’t have other means)? drugs? then clinical trials itself will kill 50% of your cash apart from the major R&D.

  22. calabs

    Thanks for the great post, Matt.

  23. Youssef Rahoui

    “Meetings are a company’s most expensive endeavors. 10 people around a table for an hour is a lot of salary expense!”Love this!

    1. Toshi O.

      Totally agree here.I find it awkward that my best work gets done after hours at home.

  24. Arek Skuza

    I think this is great post. It is great because it catches the top things CEO needs to look at and remember of. It is great as it creates some order, helps to set priorities. As the start up CEO in Poland (A little about my experience because I am new to this blog) and having experience in USA I need to add that these post also mentions cultural aspects. Europe did great job in management field. Central Eastern Europe (CEE) market still needs CEOs which can focus on these things which are mentioned by Fred. Some of them aren’t natural to CEE because of cultural differences but they need to be considered. Do you think all of these rules can be applied anywhere in the world? Thanks for such a great post

  25. Toshi O.

    Very interesting follow up to the first article.I find these types of articles fascinating as I am still working my way up the ladder.Any advice on whether I should forward these types of articles to mgt? – or would/could it be seen as jerk-ish – as they should already know what they are doing?Great post otherwise.

    1. Donna Brewington White

      Toshi — As wonderful as this material is, don’t send it to your management unless you have the relationship with them in place to support sending it. Then it becomes like email forwards and you know how annoying those can be. Unless you have a really enlightened group, they are not going to take it too seriously if it comes from down the ladder — especially if the relational connection isn’t there. Sorry.On the other hand, if you have the relationship in place and you keep sharing these amazing insights in the course of your interactions — and someone asks about this — there’s your opening.

    2. Peter Beddows

      I understand why you would ask but glad you asked before leaping into the abyss.Read, learn and keep your peace: Time will come when you can apply what you have absorbed.Meanwhile harken well what what Donna has said: It would not come happily to those in power above you even if a opening arises and even unless you have also first mastered the art of diplomacy. Be not in a rush to commit hari kari with your career options.

      1. Tereza

        Toshi, allow me to get a little more specific.Sending something to senior management that they “should” know could come off as a bit outre and insensitive (even if they indeed would learn from it!). There’s a lot more downside than upside for you in that. What you don’t want is the sentiment, “Who does that kid think he is?” It’s not productive, and I’m sure it’s not your intent. So don’t risk it.

    3. Mark Essel

      If your instincts are to share knowledge with those you work with, diplomatically working your way up a corporate ladder may not mix well with that.My advice, join a startup or found your own. Shared knowledge is vital, and egos while just as present as in bigger companies, all come after survival.

      1. Toshi O.

        Sound, sage advice.

  26. iPad Case

    The CEO must be a leader in the context of leading people to be received by the organizations to places where they never come by themselves. I wanted to be a leader. Must be comfortable being a leader.

  27. Donna Brewington White

    Matt — this post is so rich — Fred, thanks for sharing it. Great follow-up to last week’s fantastic post (and JLM’s extraordinary comment).People who run companies (and organizations in general) are a fascinating breed. I recognize what a lonely job the role of CEO can be and so it is gratifying to see this type of accessible advice from the trenches being shared among peers (and those of us who are looking on for one reason or another). I can’t agree more about the role of CEO in recruiting and retaining top talent. Some of the most important aspects of recruiting begin long before executing the actual mechanics of searching for candidates. The mechanics can be delegated, but the vision for recruiting and hiring and how this is incorporated into the life of the company has to start at the top.Not to mention that effective recruiting begins with a great story — and articulating that story is the CEO’s job. Others can repeat it, but they can’t create it.

  28. Carl Rahn Griffith

    I frequently have to explain to many CEOs (et al) the intended irony of my web presence/branding: http://www.egoboss.com.

  29. Senith MBA tutor

    MBA Mondays are getting better – moving from the classroom into real world education.

  30. Rick Wingender

    Matt – This was very interesting. I’d like to add to your comment about recruiting and hiring. Delegating all of the initial stages of hiring to recruiters is a pet peeve of mine. Yes, I know, there’s little time and thousands of resumes. Too bad, tough it out, make the time. Generally speaking, recruiters do a bad job of screening. Recruiters don’t know the intricacies of the open position like you do. I have repeatedly found in my career where recruiters have passed on a candidate that I would have interviewed. Recruiters simply want to plug a hole by looking for the closest match, so if a candidate doesn’t have the requisite “experience”, they pass on them. On the other hand, I’d rather hire really smart people, people who are smarter than me if possible. Their “lack of experience” may end up being an asset, because they can bring out-of-the-box thinking and experiences as well as other industries’ best practices to the open position. I did this as a manager, and I think CEOs should encourage their managers to take a more active role in the hiring process. To me, nothing is more important than the people you hire, and so I would not get hung up on exact “experience matches”.

    1. Peter Beddows

      Rick: Your experiences with recruiting and recruiters in general are not uncommon but I would argue that, such results as you have described, like many things in business, most often stem from having made unfortunate choices in perhaps unwittingly, perhaps under pressure, hastily delegating any responsibility to unproven, unskilled third-parties relative to the task being delegated and regardless of whether selecting from within or without your team: Everyone has different strengths and weaknesses; no less nor more so likewise true for recruiters.Hence if you are going to involve “Recruiters” in your efforts to build your team ~ and there can be several good reasons for so doing right from the outset of building your team ~ then it is as absolutely as imperative to ensure careful selection of your Recruiter as it is to ensure careful selection of any other additions to your team. Because the recruiting business nowadays seems to consist of many people that I personally would not trust to recruit someone to help me find my way out of a paper bag (putting this analogously politely), one must be extremely involved and careful in making the right recruiter choice: Fortunately there are exceptions and those exceptions can be worth their weight in gold.By selection of Recruiter, I do not mean just the selection of a Recruiter Business or Firm because even a firm with generally excellent reputation can delegate to match you with someone who would actually not be a good match as your consultant: In other words, I mean that one needs to make the most careful selection, as you would of any consultant, of a specific person ~ who may be in a firm or be an independent ~ having proven recruiting experience a) of the kind of people with the kind of skills that you would want to have on your team b) who clearly understands and shares your basic philosophies about team-building and company culture and c) clearly understands your specific reasons/objectives for making a hire: In fact, your choice for effective recruiter should be no less carefully considered and chosen than would any other future member of your team or you will inevitably get the results that Rick has described. Just remember the old adage: “First rate people will most typically hire other first rate people while second rate tend to hire third and lower!” On that basis, often referral becomes a good starting point in making a good choice and thus, from within this blog, we have the example of Donna Brewington White who has already demonstrated, by the depth and quality of her comments and observations, that she would most likely be a great resource and a dependable consultant in service to one’s own business team/tech-team building efforts. She would most certainly be the first on my call list now and I have no vested interest or anything to gain in making such a suggestion.

      1. Donna Brewington White

        Peter!!! Where do I send the check?You are giving me way too much to live up to, but thank you.

        1. Peter Beddows

          I’ve always enjoyed working with, and been privileged to work with, really smart people. I speak as I find from my own experiences with many different kinds of people and kinds of business and I put my money where my mouth is or hold my peace. However, if you must, donate the check to Tereza’s XX-Combinator!

          1. Donna Brewington White

            XX Combinator would be an excellent investment.I was going to respond to Rick, but you pretty much covered it. Well said.However, it can’t be stressed enough that the search consultant (recruiter) must “partner” with the hiring executive for the best results. I also like what you said about thinking of the outside recruiter as part of your team. That truly does make a difference.

          2. Peter Beddows

            Exactly. In fact your link to your post http://bit.ly/d63XfP even further demonstrates that.

          3. Tereza

            Ha!Donna will have key input. As for where to send the check, I only accept checks based on an actionable plan and that is still in formulation.Donna I’ll let you know that address as soon as I have it.Peter, would you like to participate in our AVC Commenter Matching Program? 🙂

      2. Tereza

        I have friends who are recruiters and I’ll say here what they probably won’t say with their name attached.Often companies/CEOs have no idea what they want or are very unclear in articulating it.Also people generally have a clearer idea if what they DON’T want then what the DO want.And they also change their minds a lot along the way. Hard to deliver against needs when the needs keep changing.There is significant skill and experience involved in helping you figure out what you are looking for.If you’re looking for a body shop that’s fine but you get what you pay for. If you need more guidance then you need a strategic partner. If you don’t have the chemistry to trust and respect that person, then keep looking.This is an area where life experience counts for a lot.

        1. Peter Beddows

          Exactly: Well said Tereza.

  31. Mike McGrath

    most of this is Drucker rehash

    1. Donna Brewington White

      Love, love, love Drucker.Moment of silence, please.

      1. Tereza


    2. Peter Beddows

      Even if so, nowt wrong with that! Drucker, in my view, is just as relevant today as he ever was.PS: I meant to click on Donna’s “Love Drucker” comment but accidentally hit the one for mikemcgrath’s comment! It would not let me correct the mistake. I want a refund! {grin} Choose in haste; repent at leisure!

  32. Semil Shah

    Fred, Matt: One thing that this post reminded me of with respect to “cash in the bank” are the financial metrics that Matt points out. I had an old boss who called these “Critical Numbers”, which were often ratios, and he spent countless hours talking about these to staff and getting his staff to recognize these ratios and talk about them themselves. Most everyone likes games and scores, so this fits into most cultures.

    1. Tereza

      I seem to be on an action-oriented jag today.To extend your description, Semil, I think it’s important for the CEO to understand and engage in discussions with his/her people describing the specific actions which yield changes to the metrics, and shining a positive light on them.The metrics are indicators. But people don’t DO metrics. They do actions that yield the metrics.And often the devil is in the detail on those actions and sometimes on the margin odd decisions are being made on the actions to pump the metric. OR the people don’t have something they need in order to perform great on the metric.Could be a conversation or shadowing the person and then asking the question, “I noticed such and such is happening. What can I do for you so you can hit the ball out of the park on this metric?”. Any that are easy slam-dunks make them happen ASAP. Demonstrate that you are aligned and want their success.Your job is to clear the BS so your people can operate at optimal performance.

      1. Peter Beddows

        If what you Tereza, and Donna ~ together with quite a few other women ~ recently have contributed in comments and observations towards expanding the discussions and general awareness of business related issues here via Fred’s blog has not yet demonstrated the enormous value that women can bring to a business development situation, then I am now at a loss to know how else such value might be demonstrated.Disclaimer: No I am not being paid by any women’s or feminist support forum! I just happen to believe, from own experience, that the XX side has much to offer that the XY side needs, should welcome and should capitalize upon by bringing more XX’s into the business fold as appropriately equal partners whenever possible.

        1. Tereza

          We’ve got a Class A bunch of guys here at AVC, each of whom plays a part in making this a hospitable, welcoming place to hang out and comment. And that’s whether they agree or not with some specifics of a comment.Each one is a critical piece of the commenting equation.I, for one, adore “my guys” at AVC.

          1. Donna Brewington White

            “We’ve got a Class A bunch of guys here at AVC…””I, for one, adore “my guys” at AVC.”+1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1(Think I just made a syntax error…oh, well, you get the point. They are the absolute best!)

  33. Pete Burden

    This (and the original 3 part list) is great advice for a startup CEO.But I am not sure this is right for a CEO of a growing business – an SME for example.My view is that the CEO of a growing business should be *ensuring* things happen – not leading so much from the front. Otherwise the company will become over-dependent on her/him.This is more about enabling others – giving them the tools and support and challenge they need.There’s also a danger I think of taking the VC funded startup model and then perpetuating into larger businesses – along with the funding and the advice, a bunch of other less useful stuff can come too – including a macho style of business and management. And an assumption that business is all about short-term gains and financial profit.Pete

  34. jsnyder

    I’m a little late to the party but its a terrific post and has kicked-off a lot of posts/comments from others that I’ve enjoyed as well.

  35. JLM

    A couple of quick responses:1. A good CEO has to know how to make decisions. To demand high quality staff work which analyzes all the alternatives, debates the pros v cons and recommends a course of action. Staff work done correctly suggests the right decision and the CEO validates it.Quality staff work in support of CEO level decision making is almost a lost art in American business today. Study the history of the German General Staff in the period leading up to WWII for a great example of how to analyze and frame decisions.CEOs has to know that a good decision made today is equal to or greater than a brilliant decision three weeks late.2. CEOs have to know how to set objectives for their subordinate managers. Not lengthy SWOT and strategic thinking kind of objectives but rather — what are the three most important things you HAVE to accomplish in the next 90 days?If a subordinate cannot answer that question off the top of his head, start worrying. If he can, put it in writing and check back once a month on progress.If the CEO and his subordinate managers do not know exactly what has to be accomplished in the next 90 days, then the rope is not being pulled by all in the same direction. Alignment is of equal importance to strategy.3. Evaluate performance in good and bad times and do it with brutal candor. Ask the subordinate manager to evaluate himself. Not in a long written, formulaic document — 3 best and 3 worst things that have happened in the last 6-12 months.Make damn sure that everybody knows that nobody bats 1.000. Does not happen.Always leave every evaluation with a very simple statement of fact — you are likely to or not likely to be “canned” in the next 90-180 days. If it is true, let them know it, let them know it without rancor or making it personal. It’s just about performance and your job is to “coach” that performance out of them not to “coax” that performance out of them. Big difference.4. Try to learn what drives people’s performance — understand their work history. Know their family situation. Be prepared to invest money in the relationship. Have a beer with a guy — when traveling is a great opportunity — and learn their life story. You are working with whom they seem to be and with whom they really are. Don’t be afraid to peer a bit deeper. You will find out exactly what drives them.5. Don’t be afraid to invest in the relationship in a personal way. It will pay you back in spades. Have a CFO who smokes cigars? Buy him some Cubans and leave them on his desk w/ no fanfare. Have a guy who has been busting his butt and been away from home for a long time — send him, his wife and his kids to Florida for a week. Make sure his wife knows it comes from HIS company and not from you.6. Become comfortable w/ being lonely and don’t be afraid to be lonely. Nobody else in the company has you job and many do not want it under any circumstances. Revel in the quiet certitude of facing things alone.

  36. fredwilson