Start-up CEOs Attributes – Hard Lessons

If you were an experienced hang-glider pilot could you fly a Jumbo Jet? Of course, not. Surprisingly though, some folks hesitate when asked: would the reverse be true? Actually, in my younger days I was a glider (motor-less aircraft) sports pilot. It took a lot of professional training and practice to master that skill. Later on, after many years of being away from this sport, I went to a local flying club for refresher flights with an instructor. While spending a day at the airfield I bumped into another trainee, a former F-15 fighter pilot. I was awed: “Gee, it must be a piece of cake for you to fly gliders!” I said. Only it wasn’t. “Hardly anything from flying fighter jets is applicable, I have to un-learn a lot and develop entirely different skills – it really feels awkward.” 

NOTE from Paul: The guest post below is written by Bob Hebert and originally appeared on his site.

I spent time recently with a prominent venture capitalist who has reflected a fair bit on the talent issue in the start-up game.Our discussion focused to the importance of certain attributes for start-up CEOs and how easy it is to misjudge their importance. To this VC, start-ups are like clay of varying grades which, in the hands of talented artisans, sometimes become art of considerable value. The creative process by which that art emerges however is a blend of inspirational, improvisational, experimental and professional activities. The finished product often bears little resemblance to what was envisioned at the outset. The irony of the start-up game is that detailed blueprints get funded while decidedly non-linear alchemy is often where the money is at.

The art of managing start-ups is the ability to feign being in total control while figuring out the company’s technological and market sweet spot (in real-time). This requires the ability to manage stakeholder expectations, implement scalable processes, manage people etc while trying to stay alive on the marketplace autobahn. These are decidedly different skills which organizations nonetheless seek to find in one CEO.

Because execution skills are more linear and easier to evaluate in candidates than the entrepreneurial je ne sais quoi, and because start-ups and their investors are often overly optimistic about the compelling logic of the blueprints they have funded, there is a tendency to skew selection decisions towards execution and scaling skills at the expense of the more entrepreneurial skills required to position the company to be scaled.

The VC spoke of the painful experience of hiring one person who had an impeccable track record of building the Canadian subsidiaries of large US or international tech firms. Because the person had launched these subsidiaries from scratch, she considered herself a ‘start-up’ person. And because several of these firms had become runaway successes, she had the swagger of someone who attributed at least some of that success to herself.

However, as the VC came to realize, this person had never taken raw technology and built a company from it. She had never really contemplated or adapted business models, searched for markets for a new technology or developed ‘go-to-market’ strategies in no-name start-ups. Instead, this person had always been handed technologies with large referenceable accounts in hand, well developed positioning statements, messaging and collateral. Her job was always tactical and full-steam ahead execution. This was a totally different game.

The VC talked of how he has learned that CEOs must be akin to entrepreneurial scientists. They must develop hypotheses, experiment, validate via feedback, adjust, shift and go forward, fast. With so many potential paths before them, they benefit by an entrepreneurial nose that will draw them to where the real opportunity is, and they must move fast while adjusting just as quickly. While company building, execution and scaling are important, without these other abilities the CEO will pick a path and die of starvation on it.

About the Author

Robert Hebert is the founder and Managing Partner of StoneWood Group Inc., a leading executive search firm in Canada. Since 1981, he has helped firms across a wide range of sectors address their senior recruiting, assessment and leadership development requirements.

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Impressed by Matthews and his Tech Lobbying Efforts

Canadian high-tech has always struck me as politically naïve and immature. Perhaps it is due to the nature of engineering work requiring a bit of an introvert personality, focused on hard data and attention to details in a narrow technical field. It could be that the mantra “If you build it, they will come”, the ethos of “Building a better mousetrap”, the frontier-like spirit of fierce independence and self-reliability, all by themselves admirable characteristics,  make it a bit short-sighted if not isolationist when it comes to the realization that their industry is not an island and it makes sense to pay attention to a broader world around advocating, advancing, and protecting its interests in the larger society.

 Whatever the reasons, the fact is that the tech community or so-called knowledge workers in Canada do not have a formidable political lobby  of the likes of the infamous Maritime fishermen, automotive unions, or the Prairie farmers. Arguably, organizations such as CATA or ITAC are supposed to provide the industry representation and advocacy, but the overall sense is that they are only partially effective.  As a result, not only is the country’s knowledge economy, competitiveness, and productivity not advancing as fast and reaching a desirable height on the world scene as they should, but, even more worrisome, when the trouble comes – as it inevitably does, even the flagship companies of the likes of Nortel and BlackBerry are left out in the cold without the support of our own government.

Nortel’s disastrous fiasco often provokes heated debates and I am sometimes asked what I think about it. Not going into the complex details of the underlying decisions that led to Nortel’s collapse, my answer as to the reasons for the ultimate failure in the end-game is that this was primarily due to the own doing of the company senior management, their hubris or political inexperience and naivety. Here we had a Canadian-headquartered flagship tech organization which routinely imported CEOs and executive management primarily from the US, with little or no loyalty and connections to the country. Even worse, the corporate culture was more of a contempt for politicians and government bureaucracy than an astute realization of potentially useful value of cultivating such relationships. No wonder when the trouble came, there was no one in the government willing to throw you a lifeline!

Having recently attended the Tech Tuesday meeting run by Wesley Clover (Terry Matthews organization) at The Marshes Club in Kanata, I am happy to report that finally we see some serious effort to mount a broad grassroots high-tech political lobby. There was a lively crowd of 50-80 high-tech folks doing a little networking by the bar followed by a serious discussion and a debriefing on the voluntary run efforts to bring the tech industry agenda more to the federal government’s attention. Here are the highlights of what’s been achieved so far:

  • After a couple of years of efforts, the infamous double-taxation of US investors in Canada was abandoned
  • Most of the senior government officials at the minister (Flaherty, Kenney, Moore, etc) and DM level were briefed about the tech industry issues and are open to take action given industry input
  • The current efforts resulted in the inclusion in Harper’s recent “Speech from the throne”, a remark to the effect that “The government will release an updated Science, Technology and Innovation Strategy”, which apparently is an important first step for further specific action

Matthews was instrumental in most of the above efforts and it was really heart-warming to see his eager involvement, initiative and leadership. This is exactly the kind of leadership that Ottawa high-tech needs. 

Some of the specific issues and initiatives brought up in the discussion included:

  • Support for the purchase of Canadian tech companies’ products by government, its agencies but also large Canadian organizations such as banks, telecom providers (Telus, Bell, Rogers), etc
  • Angel investment tax credit modeled on the highly successful BC program
  • The issue of more and more restrictive SRED practices by the CRA
  • A need to make IRAP grants non-deductible from SRED claims

 The voluntary task force will keep working at it  over the next 2-3 months, to distill a number of such proposals down to three major initiatives that will be presented to senior federal government officials for inclusion in the government economic action plan i.e. the next budget.

Overall this is a great initiative  and Terry Matthews needs to be commended for spearheading it and providing a very much needed leadership. The ironic part though was that the audience was a totally high-tech crowd and it was pitching to the converted. Nobody thought about inviting local MPs to let them hear directly what their voters need and would like to see happen. And the brutal truth in the world of politics: only votes count!

 

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