Is Our Organization at Risk Part Four: Do we have the right CEO?

Kristi Daugherty, CEO of Emergence Health Network

While an experienced board of Directors has an ongoing oversight role in an organization's growth and stability, it is in their choice and management of the Chief Executive Officer (CEO) that they have the greatest impact.

If this is the case, then what can we do in order to increase our likelihood of successfully finding the right CEO? This begins with a clear set of criteria. While there are many common traits shared by great CEOs, there are likely to be differences between organizations and companies and also different criteria according to the stage in the lifespan of an organization. A good board of directors will have their fingers on the pulse and recognize the need to regularly review what they are looking for.

There are some commonalities that we can discuss, apart from their ability to leap over buildings in a single bound.

image taken from executivenewswire-stantonchase.com

Start up phase

For many start ups and new non-profit organizations, the person in the CEO position is the instigator, the innovator who frequently chooses the board and not the other way around. They are people with passion, drive and with a great vision that they are determined to implement. This is a crucial phase in the life of any business or organization that requires a very specific set of skills/characteristics:

1. The ability to maintain their vision in the face of obstacles. 
2. The skill to work through ambiguity until solid operating processes are in place. At the startup phase decisions are more likely to be made "on the fly" without precedents, determining how things would most efficiently and effectively operate. This requires a CEO who is prepared to make those kind of decisions. 

   

   image taken from nerdwallet.com
   

3. A keen eye for the right staffing mix and being able to identify the right talent that fits the organization's needs. The staff who have the skills to operate within a start up situation should have initiative, intuition and the ability to work within ambiguity. Startups cannot usually command the same kind of salaries as larger companies and so the CEO and staff both need to be captured by the vision of the organization.
4. A person that is not afraid to work with risk and uncertainty. Procedures are not yet in place, precedent has not been set, networks are not yet solid. 
5. Is resilient. The first days of any business or organization are not easy and in the initial days there appears to be little return for time invested. 
6. Is creative and who is flexible enough to make adjustments as needed. 
7. Pays attention to detail because the startup phase is where the smallest details are laying the foundation for a successful, established business or organization

Growth phase

Many a great non-profit or start-up company began because someone had these skills and characteristics. But what happens when an organization becomes more established and is in a more "mature" phase? Does the CEO of an organization in this phase necessarily require the same set of skills/characteristics?

Naturally, if a startup CEO is able to transition and carry an organization forward by adjusting their style and applying further skills this is preferable. It allows for continuity and brings a wealth of experience of the organization into the growth. However, the kind of personality that establishes an organization at its entrepreneurial phase is not necessarily the same personality to enable an organization to expand into full maturity.

"Founders are the best start-up CEOs, thanks to their passion, focus and audacity. In the growth stage, however, the job of a company leader changes from inception to execution, from development to scale." Glenn Solomon, http://fortune.com/2013/03/25/5-traits-of-the-best-growth-stage-ceos/

Twyman Clements, President and CEO of Space Tango

Solomon and others have suggested a range of skills needed at this stage to which I have added some additional thoughts: There is a need for:

1. The relentless pursuit of the right team. Because the CEO needs to delegate more and more in an ever growing organization, they need to make sure that they select the right management team that can in turn select the right staff. As a company expands, this CEO may need to make the difficult decisions to change staff  to engage those who are more suited to the expansion phase, who work well within more structured and established environments.
2. Being highly focused on the goals but keeping an eye out for "side bets" or riskier projects that keep competitors at bay. This latter aspect is particularly important as the organization develops a product or service that becomes more visible and competitors seek to develop similar, slightly different products. Good CEOs need to have eyes in the side of their heads to keep ahead of these competitors. Even for non-profit organizations, keeping an eye out for similar organizations that wish to copycat their success is something of which CEOs should be aware.
3. A commitment to learning as the need grows for a wider range of skills is needed in this phase. Juggling financial needs, infrastructural development, marketing, product or service development all require specific expertise that changes for a larger organization. A good CEO will recognize their personal gaps and will seek to fill them with external expertise or with ongoing training. 
4. Building self-reliant teams. As an organization increases in size and scope then it becomes impossible for the CEO to handle every issue, put out every fire or make every decision. He/she will have set up the right conditions so that teams within the organization are able to operate with initiative and skill, taking care of the day to day operations. This frees up the CEO for more strategic issues. 
5. An ability to communicate the vision of the organization to all levels of the infrastructure. A start up CEO will often be the front person for customers or the community it targets. However, as the organization grows larger and more established (and is potentially in a range of locations), then others within the company need to be able to have sufficient understanding and communication skills to present that same vision. (This is one aspect that entrepreneurial founders sometimes find difficult because this requires some level of letting go of being the sole, central figure.)
6. Reads the environment in which the organization operates, whether that be the needs of the target group or the external economic or political environment. 
7. Ability to both work within structure and to continue to build structure all the while remaining creative to new possibilities and better ways of operating. 

A great CEO is a juggler of many traits that need to change over time according to the developing needs of an organization. Transitions are particularly difficult, notably between the start-up phase and an organization in full maturity. If you engage people of passion and commitment to get something up and running it is not easy to ask them to let go of their "baby" in order to make way for a new set of skills. At the same time, it is great for those same CEOs with particular expertise in startups to realize where their greatest value lies, that they might find greater fulfillment in finding their next project, their next mission.

The need for succession planning will be dealt with in a later blog because the same principles apply to all key positions within an organization.

Other interesting links to look at this topic:

https://hbr.org/2011/10/the-art-and-science-of-finding-the-right-ceo
http://www.businessinsider.com/traits-of-the-best-startup-ceos-2014-3
http://www.investopedia.com/financial-edge/0911/top-qualities-of-an-effective-ceo.aspx