There’s a distinctly different management philosophy between owners and CEOs. I grew up watching my father singlehandedly run our family business and for the last 6 years I’ve had the counsel of board members who’ve recruited and employed CEOs of hyper-fast growth companies. Sometimes their styles are quite contradictory. But I’ve found the way to grow businesses is to selectively pick the best philosophy and tools to solve the situation at hand. Decide for yourself whether it’s better to run your business like an owner or CEO.
Do Whatever Needs to Be Done – We are responsible for everything. There can’t be any hubris or ego about a job too small. Growing up I saw my father work as a bookkeeper, handyman, salesman, broker, financer and even pretend manager of his own apartment buildings. Whatever needs to get done, we do. (TIP: Stay Scrappy)
Negotiate Everything – When my father goes to Rite Aid RAD -1.78%, he’ll try and negotiate the price of his prescription drugs, and sometimes he gets a discount. Every dollar matters when you’re growing a business. Never accept the first offer or price. By mastering negotiation you’ll always have more resources to accomplish your goals.
Cash is King: Protect Your Downside Risk – Cash is the lifeblood of your business. Don’t risk your capital where the upside potential isn’t proportional to the downside risk. Success comes to those who are able tostay in the game the longest.
Nobody Else Will Figure it Out for You – Nobody else will get your customers, or figure out the toughest business challenges for you. In 2007 when we were about to launch Docstoc I attempted to outsource our PR and social marketing to no avail. Eventually I committed to take care of it myself, and on the day we launched 30,000 people visited our website.
Personality Matters – Personality can be your most valuable asset. People are often willing to do business with you just because they like you. Before you have money or notoriety, you always have likability as currency to trade to your advantage. My dad has the biggest personality I know, and often reminds me “you have to know how to talk to people Jason.”
Fortune Favors the Bold – My father is fond of driving me around Los Angeles pointing out all the buildings he could have owned. But for an immigrant with limited education, he did an amazing job of piecing together the smallest of savings to start buying real estate decades ago. If you want to reap the fruits of success you have to take your shot. No one ever hit a game winner from the sidelines.
Nothing is Ever Quite Good Enough – On occasion I’ll share what I think is an important accomplishment with my father, and he’ll often reply “Congratulations Jason, I’ll give you a sh-t medal.” High standards matter, and sometimes they should be impossibly high. If you ever feel too satisfied with you business, it will likely lead to very unsatisfactory results.
What Are You Waiting For: Do It Now – A very dear man and mentor to me, Mike Schuminsky, had a very special way of managing folks. Once he decided something, he wanted you to get it done that very instant. Great business owners have a keen intuitive sense of the most important items to work on, and a heightened sense of urgency to complete them right away.
Build Something to Pass On – When you birth and grow a company, at some point you inevitably think about its legacy. And whether it’s a family business or business brand like Intuit, owners think about building companies that stand the test of time. You’re driven by more than monetary outcomes, you want to create something built to last, that you’re proud to pass on.
Don’t Do Work; Delegate Everything – I once had an extremely hard working board member tell me, “your job as CEO Jason is not to do anything.” It was a hard lesson at the time to comprehend. But as the CEO if you’re responsible for executing functional areas, the growth of the company can be bottlenecked by one person’s individual capacity. (TIP: read The E-Myth)
Always Be Recruiting & Fundraising – Two of the most important jobs of a CEO are to recruit great talent and to make sure their company has ample access to capital. You should be spending up to 50% of your time on this. (TIP: read “What a CEO Does by Fred Wilson”
Hire Talent Better Than You and Pay Up – Great CEOs hire people more talented than them (Jim Jonassen first told me that). If you hire folks whom you believe you can do a significantly better job than, you’re making a huge mistake. Paying 25% more for the best talent can lead to 200% better results (major props to Marissa Mayer and her hiring standards).
Define Objectives, Provide Resources & Step Aside – Define your company’s goals in terms of customers, quality, revenue and growth. Provide your team with the resources they need to accomplish these goals: money, talent, vendors and time. Then step aside. Agree on required resources and results, but don’t tell your team how to get there.
Hold Others Accountable for Results, but Encourage Mistakes –You’re responsible to hold your team accountable for their commitments. But instead of punishing inevitable mistakes, turn them into lessons. When I was 23 I was sure I was going to get fired for a major blunder, instead the CEO told me it was my mess to clean up. We should encourage mistakes as opportunities to build growth and ownership.
Give Praise, Share Credit, Encourage Critique – Employees feed off of your positive reinforcement and recognition. Credit for accomplishments should be shared with your team. Be overly generous in these areas, and constantly ask your team “what can we, and I be doing better?” (TIP: take Ben Horowitz’s advice: Get Made & Master the Unnatural)
Cultivate Culture – A company culture always exists. You’re either going to consciously mold it in a desired direction, or it may become a current flowing against your growth. Decide what values are most important to your business, and build a team and environment that supports them (we have asuperhero culture at Docstoc).
Coaching & Cheerleading vs. Doing Q Directing – Early on in Docstoc, a CEO coach told me that I was spending way too much time doing and directing vs. coaching and cheerleading. As businesses grow, it’s vital that we spend the majority of our time mentoring and encouraging others to better execute the efforts we were previously responsible for.
Have a Big Vision: Plan Out the Next 5-10 Years – What is the big picture? Start with the end in mind. You should be able to communicate a compelling vision of your company 5 years out that inspires and motivates your team to execute passionately on the tasks & goals in front of them.