Source | Linked In | Steve Tappin – CEO Xinfu, CEO Coach & BBC CEO Guru
“In your thirties it’s not about pushing to become CEO, it’s about preparing to be a great CEO”. Steve Tappin, CEO Xinfu
At 33, I became CEO of a high-potential start-up with venture capital backing. The pressure of having to keep private investors happy during the Internet bubble collapse with virtually no experience was one of the hardest things I have done. Saying that, I managed to make the business profitable within just 11 months, during the internet downturn, but it cost me several years of my life. As hard as that period was, I learnt invaluable leadership lessons that have stuck with me ever since. I wouldn’t recommend that everyone aim to become a CEO in their 30s, but from my experience, I wouldrecommend concentrating on building the right foundations to becoming (my colleague’s words, not mine!) a great CEO later on.
In my opinion, becoming a great CEO is all about building a war chest of personal and business leadership and fellowship experiences that will both challenge and underpin your leadership.
Here are some tips based on personal experiences and interviews with top CEOs (more are included in The Secrets of CEOs) on how to best prepare to be a CEO when you’re in your thirties.
1. Understand value creation
To understand value creation, you need to make sure you understand how to run public listed companies for investors and how private equity investors work. Have an investor’s mindset on building value. Working in private equity for instance will help you to get a grasp of the impact of value creation in your leadership, be that in business structuring, creative deals or preparing for exit.
Take Ahmed Fahour’s career as an example: Having made partner at BCG (Boston Consulting Group), he co-founded a private equity firm, iFormation, backed by Goldman Sachs and General Atlantic Partners. A few years later, he was headhunted to run corporate development for Citigroup before being made CEO of Global Alternative Investments in his 30s. He then joined National Australia Bank to help John Stewart with its turnaround. The start at BCG and a mix of private equity and large corporate experiences have rounded Ahmed out and helped in his fast progression to now running the national icon Australia Post.
2. Work for a company in a hyper-growth phase
It’s good to work for a company in a hyper-growth phase, like Facebook, Tencent, Google a few years ago, or ASOS or Snapchat at the moment. In a hyper-growth company, you have to make decisions without complete information. You’ll get an idea of how to drive super-growth where you’ll be forced to rely on your intuition to make decisions at pace and taking responsibility for a global footprint, acquisitions, mass hiring, partnerships, new ventures and key game-changing projects. However, in doing so you’ve got to make sure you don’t make fundamental bad decisions and end up betting the company!
“As most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly”. Mark Zuckerberg, CEO and cofounder Facebook
“If you’re doing things right, something will always be a little bit broken. Most importantly, tell everybody that a little bit of chaos is okay”. Aditya Agarwal, VP engineering Dropbox
“Go or grow. If any part of the business is less than 10% of the value, it has got to go unless I can see it growing. I am always looking to see if I can double our value every three years”. Sir Bill Gammell, former CEO Cairn Energy
3. Gain global leadership experiences
Nowadays every business is touched in some ways by globalization, so it’s important to have experience in both developing and developed countries. Many global businesses actually organize themselves along those lines, such as Reckitt-Benckiser.
Perhaps the best and most challenging experiences are in China. China is set be the biggest market in the world and is probably the most difficult for leaders from the outside to master, due to cultural, governmental and language barriers. If you can adapt to China, then you can probably work anywhere. Live in a country, “smell the air”, – it will help you to really understand the history, culture and the people, even though the air in Tier 1 cities doesn’t smell that great!
China’s growth will be “enviable to most other major economies for another 15 to 20 years.” Jack Ma, CEO Alibaba
“Some say the actual [growth] number could be just 5%. But even with 5% growth, there is no other economy of such size growing at that speed in today’s world.” Jack Ma
4. Manage a large operational P&L, with multiple stake holders.
The challenge with managing a large P&L account, is successfully leading through all the soft issues and stakeholder trade offs as well as driving the business performance numbers. It will give you a grounding in managing complexity so that once you master this, you don’t get stuck in day to day detail and “doing” but you build a business system which is underpinned by great people. You can then move on big decisions,transforming a business.
Successfully taking responsibility for driving performance and operations in a number of significant profit-and-loss accounts is critical experience for becoming CEO of a major business.
Eric Daniels former CEO Lloyds advises, “By your 30s, you need to be managing some considerable part of a firm with people and a profit-and-loss account. This is when you distinguish yourself or don’t: it’s when you go up or sideways”.
5. Have a great mentor or CEO coach
About 40% of FTSE100 CEOs have used coaches and an even higher proportion advise their top teams to have one. You need to get a CEO coach who is either a former CEO, or really has experience in coaching top CEOs; a confidant who can give you great coaching on business, personal leadership and setting your life up so you can ‘enjoy’ while still being CEO. Quality CEO coaches are rare and can hold up a reality mirror up to you, can encourage you to be bold, and at times can put an ‘arm around you’. Ideally your coach will bring global CEO best practice from working with other successful companies, helping land them in your particular situation.
“It’s extraordinary to think you can be excellent at something without a coach. The notion that Roger Federer would not have several coaches is ridiculous…As a CEO, the idea you can do it on your own is extraordinarily arrogant”. Richard Baker, former CEO Alliance Boots
“My coach has given me the personal energy and maturity to deal with things. It gives me more inner strength and helps me to cope with having to give lots to other people and often getting nothing back”. Paul Thompson, former CEO Sage
6. Build a trusted fellowship and partners
Top CEOs know it’s not all about you. As you work through your thirties, identify people who are of exceptional ability, who compliment you well and who you can trust. Over time build up partners who are world class in their specialisation and will be adaptable, who will help you come up with solutions when you’re a CEO. You need to surround yourself with people who you can work with long term and who will bring external value. Work with people who are constantly coming up with new ideas and connecting you with other smart people who can be a part of your ecosystem of talented people who then will support you.
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