Posts Tagged ‘CxO’

Do you have a CEO?

Wednesday, September 7th, 2011

Shyam, Rohit and Apara were good friends. They were passionate about doing something on their own. Very soon they figured out an idea which made them take the plunge. In due course, they worked on it and soon their on-line product was ready to take to the market.

Then came the first major hump. All of them favoured slightly different approaches to monetize their product especially where to draw the free vs paid line. Each had their own valid concerns and there was clearly no right or wrong choice. It was a difficult decision, but finally one of them prevailed on the other two and the process moved forward.

With time, the situation became more complex – the initial high of a new venture came down, funds started to run low and customer traction unsteady. These down turns further led to multiple discussions. Again, solutions were not always very obvious with all options having their own set of pros and cons. Critical choices that could change the course of their start-up needed to be made but sadly they could not reach a consensus time & again!

Someone or the other would always feel unheard. Slowly the camaraderie became a little forced and ego tussles started germinating. Ultimately the differences grew so much that a couple of years after the venture started, the founding team broke up!

In my experience of mentoring start-ups, this story is not that unusual –  a bunch of class mates / friends come together to start a venture with pretty much every one doing everything. Quite often, at some point, such teams find themselves in a quagmire with relationships souring and a sense of disharmony setting in. Often the risk of teams breaking up gets overshadowed by the other immediate risks a business is facing!

So the critical question is what could have been done differently?

In their pursuit of building their business, Shyam, Rohit and Apara deferred the decision of picking up the critical roles a little too late. They missed asking “Who should be the CEO / CTO / CMO…?” in the initial stages. The premise being that since all of them were good friends, they understood each other and could work out everything together.

In my opinion, the role definitions should emerge early on. All the partners can have influence and work together, but they still need to define a focus area for each one of them and be comfortable with the allocation of roles (for self and others). Assigning focus areas gives everyone in the team a sense of structure and their own home ground. So, if business strategy is in question, the CEO should make the final call and others must then support the decision, CTO decides on an impasse on technical architecture and so on…

It is much easier to decide this in a harmonious fashion right at the beginning than when the heat is really on and misunderstandings have already cropped up. It’ll be a tough discussion no doubt, but a critical one, especially amongst friends with similar background and experience. Since the CEO of an organization will be the first among equals, this role can create more heartburn in the team than the other ones and hence is the most important to decide upfront.

So, do you have a CEO? If not, choose one now!

PS: Interested readers can also read this blog post for more information on how to shape / perform the role of a CEO.