Inability to Sustain the Cheerleader Role
The CEO may lack the stamina, energy, and ability to continually sell employees, customers, and investors, throwing in the towel when the company fails to take off. Given the brutal environment of a start-up, the CEO can never abdicate his or her job as head cheerleader.
Inadequate Hiring Skills
The CEO may be unable either to make first-rate hires or to deal with the inevitable hiring mistakes. Because this type of individual simply doesn't know how to test for and hire top-quality people, he or she often just hires former cronies, placing more stock in allegiance than in competence. The company must continually seek and hire only the best candidates. If the CEO is unable to accomplish this, then "pygmy hiring" sets in and the quality of the firm's personnel enters a downward spiral.
Poor Managerial and Team-Building Skills
The CEO's lack of managerial and team-building skills can manifest itself in numerous ways. The company may operate in a state of continual chaos; the CEO may reserve all control and decision making for himself or herself, thereby preventing any of the subordinates from managing or developing; or the CEO may work all issues one-on-one so that a team never has the opportunity to form and team problem solving never occurs. This type of CEO may create either a "political" environment in which every decision hinges on the selling power of individual personalities or a bureaucracy in which decisions take forever to be made.
The CEO who places a high value on "being liked by everyone" will probably create an environment in which staff-level decision making is impaired or futile. At the other extreme is the tyrant who insists on taking and keeping control of every area of the company personally, thereby impeding all progress. The CEO sometimes does this overtly, by delivering imperial mandates at staff meetings; but he or she can also achieve the same effect covertly, by allowing many issues to be left unresolved. In the latter case, the CEO then avoids confrontation by "solving" these issues outside of staff meetings, without buy-in from the parties who are most affected.
Above all, the CEO has to understand the fundamentals of leadership and management. He or she must be able to delegate, form a team, and get the team to make extraordinary commitments.