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"In Search of...The Great CEO"©
by Frank Moscow, President
The Brentwood Group, Ltd.
featured in the High Tech Advisor

Having recently concluded many CEO searches for both public and private technology companies, we are frequently asked: What makes a great CEO? What optimum personal and professional characteristics, skills, and experiences make an exceptional leader in these times?

While you may require a CEO candidate to have expertise in a similar or related market to the one you serve, three unique truths apply regardless of the market:

1. The Great CEO is the CSO: The great CEO understands that more than ever, the CEO is the chief sales officer. Top CEOs do not abdicate their responsibility for driving top-line revenue to a VP of sales. The CEO works with the VP of sales and everyone in the company to create and close revenue opportunities. As Gerry Langeler, general partner at OVP Venture Partners, said in his previous column, "the best start-ups all have a common DNA fragment. That genetic marker is a large number of senior people in the firm for whom the notion of reaching out and selling something is as natural as breathing."

   Steve Leeke, managing partner of 2M Ventures remarks: "A great CEO's primary role is not fundraising. It is building a company that consistently takes in more money than it spends by creating lasting value for its customers. It really is that simple. A great CEO focuses on what he or she has to sell today, not what might be available tomorrow. Ultimately every company has to live on what it sells. Period."

   This does not mean that the CEO must be a former VP of Sales. It does mean that the CEO sets the tone by demanding that the identification of, qualification of, and closing on the best revenue opportunities, while delighting customers, is the top priority in the firm. How can you tell whether this is so? Measure customer intimacy: does the CEO:

   a) Know the names of the decision-makers and key influencers at the top five to ten customers and prospects, visit these people, socialize with them, and build a business and personal relationship on a foundation of trust? This leadership example shows the entire organization what is critical for success, builds high-level customer relationships, and provides the best client communication that facilitates revenue opportunities and quicker resolution of roadblocks.

   b) Implement a formal executive customer sponsor program tied to the incentive program, ensuring that all the people on his or her team have a high level of customer intimacy?

   c) Lead conversations with the team that focus on deals, revenue opportunities, and delighting customers when the team socializes outside of the office?

2. The Great CEO "builds enduring greatness through a parochial blend of personal humility and professional will," writes Jim Collins in his book Good to Great. "Level 5 (the top level) leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious, but their ambition is first and foremost for the institution, not themselves."

   In Good to Great, Jim Collins did showed through decades of data and extensive research what every top executive recruiter knows: that larger-than-life, high-personal-ego leaders are negatively correlated to success. Gerry Langeler says: "I recently returned from my 25th reunion from graduate school. Two of my section-mates now rank as CEOs of General Motors and Procter & Gamble. Both are credited with turning around lumbering giants. One is outgoing and affable, the other quiet and introspective. But both clearly possess the simpleminded notion that it isn't 'about them'. It is always about building something greater than them. They both connect with people on a level that says they are credible, - with one and only one goal--enterprise success. Start-up CEOs must send the same message, every day in every way."

   Jim Collins remarks, "the great irony is that the animus and personal ambition that often drive people to positions of power stand at odds with the humility required for Level 5 leadership. When you combine that irony with the fact that boards of directors frequently operate under the false belief that they need to hire a larger-than-life egocentric leader to make an organization great, you can quickly see why Level 5 leaders rarely appear at the top of our institutions."

   Wyatt Starnes, CEO and president of Tripwire, reflects, "a great CEO hires great people and builds a strong CEO independent culture. Independent means the company will grow and create value because the team, not just the CEO, has Level 5 leadership characteristics."

   "Great leaders are rigorous, not ruthless, people who built the right teams that vigorously debate in search of the best answers, yet who unify behind the best decision, regardless of parochial interest," says Jim Collins. That rigor, according to Chris Brookfield, managing partner of Northwest Venture Associates, is evidenced by an "ability to dynamically and in real time match the resources of their organization with the ever-evolving needs of their customers."

3. The Great CEO has been successful in good times and in tough times. It has unfortunately become all too common and easy to blame 9/11 (today), the Gulf War (early '90s), high interest rates (the '80s), etc., as the reason for failure. Clearly, macroeconomic trends impact a company, and no executive is going to be successful all the time, yet does anyone truly believe that all of United Airlines' problems are 9/11-related?

   The Great CEO will have a track record of success in demanding times. He or she will be able to show, based on leadership, the relentless pursuit and implementation of the best ideas and an unwavering determination to build an enduring company, significant accomplishments that outperform peer group metrics regardless of economic cycle. Debi Coleman, managing partner of Smartforest Ventures, explains: "The very best, most effective CEOs don't just create a vision or just a strategy for their company. They develop/forge a set of shared goals, values, and operating principles that guide not only the executive team but also the entire company in fulfilling their mission."

   In the last five years, it has been easy for CEOs to enjoy the rising tide. All of our boats were riding high 24 months ago. If you really want to understand how well this person performed, analyze his or her performance when the tide went out. How he or she performed when times were tough will provide the most realistic and predictive insight for future performance.

   Determining a potential CEO's capability and success in these areas requires thorough interviewing, research, and referencing. Intensive candidate due diligence is key. Susan Sigl, managing partner of SeaPoint Ventures, says, "Look for significant above-market performance and results during challenging economic downturns, when evaluating the prospective CEO."

   Aggressively screening for these three experiences and philosophies requires a lot of effort. The board of directors that does this well significantly increases the likelihood of success.