Warsaw Equity Group

What traits help a CEO take his/her a company to the next level?

Author: Dawid Bieńkowski, Human Capital Partner, Warsaw Equity Group

When a start-up gets off the ground the person that people associate with it most frequently is its Chief Executive Officer. This, along with his/her or her role, changes as the company begins to grow. How does a CEO’s management style evolve? What pitfalls await? What can be done to prevent them?

Chairman, Managing Director or Chief Executive Officer – while their exact job titles and responsibilities may vary, the people in these positions are crucial to the development of any company. In the early stages it is the skills and abilities of these people that can be the difference between success and failure, not to mention rate of growth. It is often overlooked that, as a company evolves, the role of its CEO also needs to change. The best entrepreneurs understand this and adapt their leadership model to the phase that a company is in.

Changes in scale

According to the model below, which was developed by Larry E. Greiner, organizational development can be divided into five stages – each of them requiring a different style of management by the CEO.

Most often transition and changes in the leadership model of an organization are caused by a crisis – usually resulting from ineffectiveness in existing processes: communication style or the way decisions are made. These changes are only natural – which is why it is so important for the CEO to be aware that his/her role will also need to change. If for no other reason than the fact that – as a company grows – the skills of individual team members become more important – no CEO can make all decisions alone.

Key skills of top CEOs

There are five key characteristics (clusters of skills) that the best CEOs have in common.

  1. Be Mature
    Demonstrate the skills, values, experience, and personality traits that match the requirements for your position – especially in terms achieving performance objectives.
  2. Be a Strategist
    Anticipate and appropriately position the organization on the market.
  3. Be Casual
    Make the strategy easy to implement – especially in terms of translating it into specific activities.
  4. Manage People
    Develop employees’ skills, strengthen their commitment and leverage their talents – helping achieve above-average results.
  5. Personal Brand of the Leader
    This has to do with how well your own behavior reflects the expectations customers and stakeholders place in your brand, i.e., building brand through your own personality.

    Each of these characteristics represents a separate set of skills that can be developed through mentoring or training. It also important to remember, however, that there are characteristics that hinder the abilities of people to lead/be success – especially in terms of achieving dynamic growth and ensuring smooth transitions between the various development phases in a company’s life.

    These include, for example, overconfidence, concentrating too much on your own individual success (at the expense of the organization as a whole), an inability to focus on what is important, or not staying true to appropriate values. Changing these characteristics is difficult, though not impossible. It does however require a lot of effort from the leader himself.

How to guard against the above dangers?

There are many pitfalls lurking for CEOs as they look to build company value. Three of them are particularly common. Avoiding them, in my opinion, accounts for 80% of a company’s success:

The first trap: “Too much, too fast.”
Most leaders dream of dynamic growth for their organizations. In many ways this is how success is defined – this according to the assumption: faster success is greater success. If, however, scaling is not the ultimate objective – a company must be well prepared for it. When it is not (that is when the organization does not lay a solid foundation for it in terms of physical tools, knowledge and processes) rapid growth can prove to be an obstacle to success. It is sometimes the case that an unprepared company’s structures cannot stand up to the stress of increased demand, managing multiple markets, etc.

To avoid this, it is necessary to choose the right business model and set clear short-, medium- and long-term objectives. It is also worth defining a clear and comprehensible strategy of operation and ensuring the right attitude – for yourself and members of your team. Practice shows that it is impossible to skip “some” stages of development organizational development. It is therefore very important for leaders to know what awaits them and the businesses they run – focusing on the  quality of things that are currently a top priority and being able to adapt their actions to the development phase that a company is currently in.

The second trap: “I’m the leader – I can do everything”.
This approach results in taking on too many tasks – both operational and decision-making responsibilities. As a result, decision-making skills focus in one place – and that, in the near term, becomes a bottleneck of the business being run. You can guard against this by delegating not so much tasks as responsibilities. You also can’t forget about the importance of your development and also never being afraid to hire people who are better at certain things than you are.

The third trap: “B Players, C Company”.
For CEOs, time is a scarce commodity. As a result, it is often the case that the key criterion during the hiring process is the availability of the candidate and the short time in which he or she can start work. This means that skills take a backseat. Hiring mediocre people (B Players) provides short-term relief but, in the long run, pushes the company into the direction of being third-rate (C Company).

How to avoid this? It is necessary to determine exactly what skills are crucial in matching organizational needs and to identify the priorities that the CEO must stick to without exception. While searching for candidates, it is worth asking yourself: will this person help the company get to the next level? It is also important to remember that technical skills aren’t everything. Personality traits of a potential new team member are equally important.

The above mistakes are more characteristic of young organizations such as start-ups. Even mature companies, however, are sometimes unable to guard against them. Therefore, regardless of the size, age and stage of development that their company is currently in – the best CEOs are conscious of the role they play in that company and the process of its growth. In this case, the old adage applies like father, like son or – in this case – like CEO, like company.