12 The People
coo and CEO may try to perform the same tasks, tripping over each other while increasing costs and slowing decision making Alternatively, the CEO may delegate too much responsibility. Ideally, the CEO should rely upon the COO as one of the chief members of the team to whom tasks can be delegated, but the CEO should never delegate his or her primary responsibility, which is driving the company.
Another way to get into difficulty is to have a chief operating officer who manages internal affairs while the CEO sells the company in various ways. Such an arrangement stresses "selling" as a CEO's most important skill and thereby biases the choice of a CEO, by limiting the field to candidates with a sales background. Unfortunately, such individuals often find themselves incapable of hiring outside the sales specialty and hence tend to populate the company with salespeople. Although a CEO (and the rest of the team) should have some sales ability, the need for such ability pales in comparison with the need for him or her to understand finance, control, marketing, and products. Further, unlike a salesperson, who leads and manages individuals, a CEO must create, lead, and manage teams of individuals. In short, I believe that those involved in a start-up should think very hard before selecting a salesperson or sales manager as a CEO.
Over time, I have concluded that the chief executive officer is typically the weakest dimension of a start-up. The CEO holds a position of great influence, since systems and controls for running the company smoothly are not yet in place. Resource limitations compel the CEO to wear a number of hats, frequently in areas where he or she has little expertise. One of the important hats is often that of mediator, because intra-team disputes can have immediate (and possibly devastating) bottom-line ramifications. The fledgling organization's inordinate dependency on the CEO places a great deal of power and responsibility in this individual's hands-perhaps more than he or she has ever exercised. Some CEOs get drunk on this power, while others become frightened and paralyzed. Good CEOs are able to maintain a certain measure of detachment and perspective and understand the need to drive the organization.
The following list presents some key personal qualities exhibited by effective CEOs. Readers are encouraged to rely on their own experience and intuition when weighing them.
· Intelligence and energy: CEOs need intelligence so they can identify and prioritize problems and set direction, and they need extraordinary stamina and commitment because everyone in the company takes his or her lead from above. When it comes to these two qualities, the higher a CEO's level of intelligence and energy, the better.