As most of you know, I spend a lot of time talking about the role of the CEO at a mid-market company. There are plenty of great business books written for Fortune 500 companies by CEOs and researchers. There are also plenty of books about startup entrepreneurs and small business owners.
But the bookstores are conspicuously absent of stories, guides, or manuals for CEOs of mid-market companies.
This is a main focus of mine – removing the “mystery” from the mid-market CEO role. Today I want to share a scenario that I run across often while working with CEOs:
Many of them function more as a CO – a Chief Operator – than as a CEO.
What’s the difference between the two?
A CO is the top operator at the company. He is a talented businessperson who has landed in the CEO chair, but lacks CEO training. He knows his industry, people and market well, and is involved in day-to-day business functions such as operations, finance or sales.
A CEO sets the vision, inspires her team and market, allows her leadership team to handle the operator roles, and focuses on building tangible, measurable and lasting value.
The CEO spends 90% of her time working ON the company. The CO spends 90% of his time working IN the company.
Let’s take a look at an example of a common career path of a mid-market CEO:
Jack Smith is a charismatic guy. He’s always been popular, and isn’t afraid to engage people in conversation. After college he took a job selling office equipment. He completed the company’s 6-month training program and finished top of the class. One year later, Jack completed the 10-month Solution Selling program and took a job with a small technology company selling inventory management software to the Fortune 500.
Jack turned into a superstar. He was the best in his company. After 5 years Jack’s accounts represented 70% of the company’s $60 million in revenue. He became a vice president, but kept his focus on adding new accounts to grow revenue. Jack aspired to greatness and became very well-known in the industry. He attributed his success to his hard work, his drive, and his continuing sales training that helped him sharpen his skills so he could stay on top.
When a struggling competitor with $10 million in revenue asked him to become CEO, Jack jumped at the opportunity. This is where he’d leave his mark. Jack knew many of his accounts would follow him, and by doubling revenue in 2 years, he’d be a successful CEO.
What Jack didn’t realize is that his expansive sales training and skills wouldn’t prepare him for all the responsibilities of being CEO. He was strong in sales, product and the competitive landscape. Yet he had little experience leading an executive team across all company functions, and no experience building tangible, measurable and lasting value in a company. He was great at top-line growth, but top-line growth can be a double-edged sword: the wrong type of growth can topple a good company or severely diminish its value. It is likely that for the first time in his professional career, Jack struggled to produce the results he had been hired for.
If you hold the CEO title at your mid-market company, think about how much time you’re spending working IN the company versus working ON the company. And if you’d like some help shifting your focus, connect with us.