Getting and Managing the Resources you need as a CEO
As a CEO, you are ultimately responsible to make sure your company is resourced the way you need it to be to execute your strategy.
I taught a class on this yesterday: Getting Resources from the Entrepreneurs Perspective to a room full of budding CEOs at the Haas School of Business at UC Berkeley. I knew they were future entrepreneurs when I asked for a show of hands on who wants to start a company one day and more than half hands in the room shot up! Great to see.
I break the problem of Resources down into four simple categories – makes the model easy to remember.
Cash is obvious. You as the CEO have no more important task, at any point in time, than making sure your company has enough money. You cannot lead a group of people to wild success if you cannot make payroll, and you can only survive on stock options for so long. You own the cash position, you own raising and managing the cash, you need to have a deep understanding of cash flow – and alongside of some of the notes from a class I taught a year earlier on cash management – here – I encouraged the group to get very good at using excel and building their own P&L.
People are your most precious resource. And talent follows the 80/20 rule. 80% of the value is created by 20% of the people. This does not mean you do not need the other 80%, but it does mean that as the CEO you had better know who that 20% is and make sure they are happy, challenged and well compensated in equity so they stick with you and your vision.
And the culture your create lies at the heart of your ability to recruit and retain the best. That’s about you establishing values and walking the talk. And about creating a culture of Trust – because I believe trust is just more efficient.
Advice is about surrounding yourself with people who are smart and experienced, tell you what you need to hear (sometimes easy, sometimes hard to hear) and who ultimately share your vision and have your back. ie. a great board. Building a great board means finding a good VC – my Cliff notes to what makes a good VC here – and managing your board meetings so you can get their advice. Make sure you provide your board with enough information, and with the truth, so they can truly advise you.
And finally You. You are the most precious resource at the company because you are leading (we hope) and you are driving all aspects of the business to come together at once. This does not mean you are more important – but it does mean you need to be fully cognizant of the responsibility you carry.
The CEO needs to be great at four things: Cash, Strategy, Customers and Culture. These drive your business forward – and build and protect your resources. At the end of the day you are IT. It’s a cliche but the Buck really does stop with You. So taking care of you – make sure you are healthy and have the energy to lead, make sure you have advisors who hold a mirror up to your performance so you can get better and better, and care for the other side of you – your friends and family. All combine into who you are when you show up at the office every morning.
As I said to one of the students who asked me: “Apart from the 80/20 rule, what is the second rule you live by as a CEO?” – my answer was about the You. As CEO you are on 100% of the time, no downtime, no moments of doubt and that takes enormous reserves of energy. You are the source of the Resources. So make sure you can be present 100% of the time because all eyes are on you.