Summary: Startup leadership is a unique challenge frequently encountered by someone by accident and circumstance, rather than intentional recruitment of skills to fit a predefined position. The startup CEO has three primary areas of leadership focus, that complement three primary areas of operational focus. The CEO may be responsible for both the leadership role and the operational role of a COO.
Introduction: The founder(s) and CEO of a company face a confusing gauntlet of challenges as they guide their business forward while addressing product/market fit, team building and fund raising. I found that typical first time and even some experienced founders do not have a framework to focus their efforts to lead, and just do what seems necessary in the moment. Some may have the broad tools of an MBA education, or the tactical methods of lean-launch value proposition experimentation through discovery, validation and development. When I ask a CEO about their roles and focus, I typically hear a lack of clarity and focus, justified by the uncertainty and scramble of being a startup. It’s when I found Matt Blumberg’s “Startup CEO: A Field Guide to Scaling Up Your Business” that I found the answer to my own need for clarity and a framework to guide others through their exploration of their role and the challenges they needed to focus on, or so I thought. Over time I found a discussion of vision, team and finance was productive but insufficient.
Switching to talking about a company’s ability to execute and grow, I was taught by Doug Johnson of Professional Growth Systems to focus on Product, Sales and Cash. I found this to be a very effective way to frame discussions with companies and an effective way to uncover the challenges that a company was facing. As an engineer myself, I could relate to many technical companies that were strong on the product development and feature sets, adequate at cash management; but quite willing to ignore the effort to develop the sales process at a level that matched the product investment. I’m amused thinking of recent companies led by the technical developers who quickly dismiss sales as something to hire for and compartmentalize it away from the important work of technical development.
As someone who loves matrices and simple one page tools, (and some would say complexity), I combined the focus areas of a CEO and the three operational areas of a company. Further once I laid the two out on each side I saw that they complemented each other. If you look the matrix below you can see how a CEO’s vision translates down in to the product, sales and cash management approaches. In the same way the CEO’s focus on a Team and Finance also impacted each area, creating a 3×3 grid.
I was reminded of this quote: “Every successful enterprise requires three men – a dreamer, a businessman, and a son-of-a-bitch.” Peter McArthur
I think this matrix covers the first two people (men and women!)… I’m not going to address the third one in this post… that is a different topic!
Application: I take this in three steps, first outlining the three focus areas of a CEO. Then I talk about the three core operational areas of a business. Then I combine them in to a blank matrix with the intersecting nine areas and begin assessing the issues and challenges in each of the nine areas. Quickly, focus and priorities become clear. As a planning tool the startup CEO can periodically review the 3×3 matrix and assess if the messages and plans are aligned and where any strengths and weaknesses require additional attention. I’ve found it helpful to keep the CEO and COO roles separate if jointly held by CEO during early startup formation, in order to create the path to a future delegation of more of the operational responsibilities.
Tools: This Startup 3×3 matrix can be used with the nine areas filled in through a process of discussion and planning with the founding team to identify key objectives for each area. This can done in conjunction with a business model canvas and be used as an initial business planning tool. Another version of it can have the company board of directors added on the right, beside the CEO so show their leadership position and to add three more areas of support, mentoring and contribution they can make to the company’s success. A one page project management tool can be used to then plan what, when, who and budgets for the current tasks.
Variants: One version I only used a couple times with companies is shown below with the Board is added to the matrix in order to facilitate a discussion about how the board helps guide the CEO, and support the company. A second variant I want to try is replacing the three operational areas with Product, Process and People. This follows Marcus Lemonis’ basic framework for engaging with existing businesses. I’m not sure this should replace the operational areas but might be a new matrix with the Marcus’ three areas and the three operational areas I’m using. If you try this let me know. It might begin to be a set of cascading matrices similar to QFD.
Contact me for a blank form of these graphics versions.
Question: Of the three CEO areas of responsibility, which are you best at? Which needs your attention at this time?