Five Traits of Great Growth Stage CEOs

As featured in Fortune Term Sheet

Founders are the best start-up CEOs.  The same passion, focus and audacity required to get a company off the ground enables founders to be successful start-up leaders. After all, when a start-up company is trying to emerge, there is nothing more important than focus and drive.

In the growth stage, the job of company leader changes.  The imperative moves from inception to execution, from development to scale.   Scaling presents challenges that are difficult to navigate.  Great growth stage CEOs require unique skills to complement the attributes that contributed to their success as early stage leaders.  Below are five common traits among the best growth stage CEOs with whom I’ve worked.

Relentless Pursuit of the Right Team.  Successful recruiting in the early stage is more about finding super talented folks with tight cultural alignment.  In the growth stage, the best leaders recognize when to bring in skill players with functional expertise and capacity to scale.  You can never take a risk on a complete cultural misfit, but as the skill sets you seek become rarer, not every position player you bring in will be a strong steward of your company culture.  Continually upping the capacity and quality of your team may hurt feelings, especially if some of the early employees are unable to keep up, but surrounding yourself with the very best as you’re scaling is critical.

Focus with Aptitude for “Side Bets”.  Effective growth stage leaders keep their teams hyper focused on the key drivers of success.  This type of singular focus, necessary to get through the start-up phase, can leave flanks open in the growth stage however.  Clever competitors will seek to grab opportunities that otherwise would have been yours, weakening your overall franchise.  While keeping their companies extremely focused, the best growth stage CEOs are also able to identify and prioritize the right “side bets” – projects that start as skunk works, involve a limited number of people and disruption, never seem justified in the short run, but can grow to become important compliments to the base business over time.  Side bets need the right oversight, should be limited in number and need to be killed quickly if they’re not working.  Those that do work can have great impact and protect your franchise.

Commitment to Learning.  As a growth stage company CEO, you’ll need to become competent, even great, in multiple aspects and dimensions of your business including sales, marketing, product, finance. No one starts as a master of all.  The best CEOs make learning an active part of their day – seeking out experts, encouraging the same of their team and build this into their culture.  This commitment helps companies stay agile and improve as they scale.

Building a Self-Reliant Organization.  While a start up, you encounter a limited number of very large problems (does the technology work?  is there product market fit?).  When you graduate to the growth stage, you’re more likely to encounter a longer list of medium sized problems (unhappy customers, key employees thinking about leaving, sales compensation structures, etc)  The list quickly gets too long for any one person to manage.  The best CEOs build an organization prepared to tackle these medium sized issues consistently.  How?  By empowering their teams, giving them the cultural rudders to help direct good decision-making and trusting them to get the job done without micro-managing.

Empathy for the Customer.  No business can succeed without customers.  The happier your customers, the more likely they’ll stay, grow and refer others.  While founder-led, evangelical selling and support work in the start-up phase, as your company scales, you can’t be there for every sales call and support issue.  You’ll need to find ways to inculcate customer empathy into your culture, aligning your employees with your customers.  Great growth stage CEOs build customer focus into their process.  GGV portfolio company Zendesk, a leader in cloud-based customer support, has all new employees sit on the support desk as part of their training.  Promising growth stage SEO platform BrightEdge has all new salespeople build a website and use its tool for SEO as part of their training.  Similarly, you need to find ways to ensure your team understands and cares deeply about the plight of your customers.

As you move your company into the growth stage, recruit the best team possible, carefully manage a few side bets while remaining focused, build an organization that is dedicated to the success of your customers, committed to learning and able to operate exceptionally without your daily oversight.  If you do these things, you will become a great growth stage CEO.