What’s the Biggest Challenge for CEOs Scaling a Business?
I was recently asked on the “Scaling Your Business” podcast about the biggest challenge for CEOs of growth-focused businesses, to which I simply answered...”The CEO”.
As a business growth advisor, I see this is evidenced when we start our growth advisory journey with a client. Through the construction of a Strategic Plan on a Page, the CEO and their team can start to enhance their focus on the business’ priorities, synchronise their efforts and align their outputs towards a common shared vision. The CEO leans on their team like never before and they begin to let go and trust a little more, watching how their team typically responds in a supportive and positive way is a magical experience!
This transformation, by-and-large comes about from establishing a well-articulated and thought-out long-term vision. As a business growth advisor, I take the client through the process of setting up ‘Functional Accountabilities’ for the leadership team, establishing ‘Quarterly Rocks’, setting the company’s KPIs and meeting Rhythms put in place to communicate effectively across the business, which are all key to scaling a business.
Through this process, the CEO and their team start to understand that the role of the CEO needs to change. In almost every client’s case, the role of the CEO is elevated to focus on the activities that are truly strategic and are focused on building enterprise value. For example, many of our CEOs are now spending less time in the business and far more time considering the business activities such as:
M&A opportunities
Proactive and strategic customer management
Proactive supplier relationship management
Identification of the next A-player to uplift their executive team (or next level leaders)
Company culture building
Taking on business/brand ambassador activities
Looking for new growth opportunities
In almost every case, it is incredible to watch a CEO and their team enhance their ability to deliver as a team unit and grow their business in a sustained way.
I recently read about Jeff Bezos’ “one-way-door rule”, Bezos sent a letter to his shareholders explaining there are two types of decisions in business. One type is like a two-way door, if you’re not happy with your choice you can always walk back through the door. The other type is like a one-way door, it is not reversable, so caution must be taken when making that type of decision.
An example of a two-way door decision is hiring a new office manager, if it doesn’t work out, they can be replaced without the CEO getting involved.
Examples of a one-way door decision are whether the company will make a major acquisition or float the company, they are generally high-level strategic decisions that will influence the direction and position of the organisation.
Why Bezos sees the one-way door rule so invaluable is because it allows him to discern what decisions are important enough to get involved in, so he can focus simply on issues that have the biggest impact on the business.
Bezos has also made the point that CEOs shouldn’t confuse the two types of decisions because “it will result in slowness, unthoughtful risk aversion, failure to experiment sufficiently and consequently diminished invention.”
For all CEOs this is not an easy concept to activate, to scale a business a CEO must learn to balance the daily management of the company with driving the major strategic decisions required, when a CEO allows this to occur, they are on a path to create an even more incredible business with sustained growth!
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