Mitch Harper, entrepreneur and co-founder of Bigcommerce, recently reflected on well-known businessman and venture capitalist Fred Wilson’s advice to CEOs. Wilson says a good CEO does only three things:
- Set the overall vision and strategy of the company and communicate it to all stakeholders.
- Recruit, hire and retain the best talent for the company.
- Make sure there is always enough cash in the bank.
Just three things? Harper says that while the short list may look simple, within each step there are many important details that every good leader needs to work through. In his musings on Wilson’s now famous “three things” piece, Harper breaks down each of the big three items.
Set the overall vision and strategy
Harper points out that good CEOs communicate to employees and the leadership team over and over, and then over again, exactly what their vision is and how to realize it. Constant communication is especially important when a company is growing and changing fast. All people involved need to know their roles.
Recruit the best talent
The best leaders hire the best people, and recruiting that sort of talent can take a significant amount of time. Plan ahead, advises Harper, as far in advance as two quarters if possible. If the role you’re trying to fill is one of a more critical and higher-up position, the CEO should be directly involved in the search process.
“The best candidates are in high demand and getting face time with you can be the deciding factor in where they go to work,” Harper says.
Ensure there is enough cash
Raising cash is imperative and making sure there is enough to make it through a rough time is critical. What does that amount to? Harper says good CEOs need to have enough cash on hand to last through at least an 18-month downturn. Harper also warns against overspending, explaining that having to slow growth to save cash is better than having to let people go because the company has become insolvent and can’t raise enough funds.
What NOT to do.
Effective CEOs are likely practicing some form of Wilson’s “three things” every day. Just as critical for success, however, is knowing what not to do. According to Business Insider, the best leaders make their companies great by what they don’t do. "Slowly but surely, getting bogged down in the wrong tasks will bring down even the strongest executives," says Jim Alampi, CEO of Alampi & Associates, a Detroit-based leadership firm.
Good CEOs don’t have time to wrestle with every detail from every division. They need to delegate expectations and trust that the leadership teams they’ve hired are equipped to run their divisions and meet the company goals.
Make faultless decisions
If a CEO waits for everybody to agree, nothing will ever get done. There isn’t ever a perfect answer, and top CEOs know that without a decision there is no forward movement.
Go to every meeting
Learning which meetings to attend — such as those determining the direction of the company — and which ones to skip is imperative for a CEO.
Avoiding long meetings doesn’t mean good CEOs shut themselves off from their people. Efficient and constant communication is the key. "Providing the same information via different channels increases the likelihood that employees will actually remember what you tell them," Alampi explains.