Effective CEOs Lead Their Boards
Being a CEO of an early-stage growth company is an exercise in continuous learning. Whether you were the founder or an early addition (i.e. "founding CEO"), you likely came into the situation as an expert in one or two primary areas such as product, engineering, services, sales, etc. As you scale and the company grows more complex, you'll become an expert in (or at least deeply engaged with) all other functions of the business as well.
Just when you start to feel like you've figured it out, you'll have a new skill to learn...how to manage your board.
This can prove tricky, particularly if it’s your first CEO gig and/or your first board. Unfortunately, it’s easy to naively fall into some pitfalls.
If you have a healthy board, hopefully you are getting good advice and support, but your board members (including “independents”) are NOT your objective coaches or counselors.
That’s why I strongly recommend finding an outside objective coach (with no financial interest in your business or relationship with your investors), and/or join a CEO peer group such as YPO. I did neither during my 15+ years leading my last company, and with the benefit of hindsight, I now realize how much I, my team, and my company would have benefitted from it. Don’t make that same mistake.
In Amp It Up, Frank Slootman gives some great advice addressing board dynamics. Here are a few excerpts that resonated with me.
"In a perfect world, board members would always respect a clear boundary between giving the CEO advice and support, versus trying to tell the CEO how to run the company."
"They [board members] are there to enrich the conversation, ask critical questions, offer fresh perspectives, and make sure the interests of investors are well considered. All of that is helpful and productive and can increase everyone's confidence in the company's direction. The problems only start when the board crosses the line and tries to force the CEO's hand."
"New CEOs often hesitate to assert their purview because they aren't sure where and how the boundaries should be drawn. It's only human in that situation to try to please and appease those loud and intimidating voices...if you are subservient, there will be no shortage of board members who will gladly jump in and start bossing you around."
"The board will sing your praises to the skies if the company hits all its targets under your leadership, even if you disregard their suggestions." [i.e. deliver results, and a healthy board will be happy…regardless if what you did was their advice or not]
"What to do instead: Lead Your Board. CEOs rarely push anywhere near the limits of their true power as commander in chief. Whether you feel ready or not, once you have the big job you might as well act like it. A good CEO will lead a board."
"What does that mean? For starters, never go into a board meeting, tee up a topic, and ask them what they think. Instead, prep carefully with your team in advance, and then go in and tell them what you think. If they then respond with questions or concerns, that's fine. You have started the meeting by filling a vacuum, instead of creating one. That will make it much harder for them to dominate the discussion."
"Good CEOs get comfortable asserting their authority. They've got plenty of it under the structures and customs of corporate life. Use it or lose it."
And a quick addition from Brad Feld at Foundry…
"The best board members are collaborative, know how to engage, but also understand the CEO runs the company.”
So remember, you've been hired to lead the organization, and if you are delivering big results, you have more "power" than it may feel. The last thing a strong, balanced boards wants is you to be unmotivated or disengaged because board members have crossed the boundary.