Dear Startup CEO, Are You Making These 8 Mistakes?

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John Waldron

Jun 3, 2015 • 12 min read

Making mistakes is a human thing, and CEOs are no exception.

Check out our list of the most common mistakes that CEOs make – referring especially to a situation when the company is in the startup phase.

No matter how ‘high up’ we are, how long our careers have been, how ‘important’ or ‘integral’ we are to our company, no matter whether we’re in marketing, development, HR or management – we can all make mistakes.

And CEOs are no exception. In fact, we have even managed to put together a list of the most common mistakes that CEOs make – especially when the company is in the ‘startup’ phase.

CEOs have a lot of weight on their shoulders, of course, and a lot of balls to juggle. The CEO will be the top-ranking person in a business organisation, and ultimately responsible for taking and/or finalising all managerial decisions. This person will need to be a leader, will be responsible for nurturing company culture, will need to control communications, data protection, customer service, and, of course, will be the one to hire and fire.

It’s not surprising, therefore, that CEOs around the globe don’t always get things 100% right, 100% of the time.

But you don’t want to be one of these people. Enough CEOs have made mistakes in the past to mean that you don’t need to make the same ones again. So, let’s take a look at the most common mistakes that CEOs make so you can avoid them yourself at all costs.

Common mistakes that CEOs make

Taking on too much responsibility

A good leader will know how to delegate – a bad leader will try and do everything him/herself. As such, there are very few successful startups out there who take on the complete roll on their own.

This, as Chris Meier puts in his post, is simply because the primary roles involved in a strong startup launch are too diverse to be properly managed by one person.

Meier reasons that there are 3 primary roles that need to separately embodied at the head-end of successful start-ups: the product manager, the marketing and sales, and the CEO.

The product manager is the person responsible for taking the product from an idea to a reality. The marketing and sales need to be concentrating on finding the right market for the product and then selling it there. And finally, the CEO is the proverbial quarterback of the enterprise – keeping an eye on everything and passing the ball where it needs to go at the right time.

One person cannot take on all of these roles alone, as the inevitable outcome will be that he/she will drop the ball and certain areas will get ignored. Cooperation and delegation are the key drivers that need to come out of each and every hurdle.

Too Much Control And Not Enough Management

Clear, realistic and actionable goals are what should be at the forefront of the CEO’s managerial strategy. Yet too often the tendency is to be constantly micromanaging and breathing down the necks of perfectly capable managers and employees who would do much better if you just let them get on with their job. The trick is to assign the right people to the right tasks, set them goals and deadlines, and then let them get on with doing what they do best.

Nowhere is this more true than in the case of outsourcing or working with remote teams – something that we know an awful lot about here at Netguru. By the very nature of our business, we find ourselves working remotely with different teams and companies from all around the globe on a regular basis, and so we deal a lot with CEOs from many different quarters.

Project management across this spectrum can be tricky, but Wiktor Schmidt, Netguru’s very own Co-founder and CEO shared his thoughts in a blog post What Makes Remote Working Work?, explaining what management practices are necessary for avoiding the failure of management and remote working in your company.

We use v2mom and consistently outline clear short and long-term goals to make sure there is no need to micromanage in person. In addition, it becomes fairly easy with developers to keep the transparency level high by have company-wide access to all GitHub repos.

Also, it’s impossible to balance the control and freedom for your employees, especially with people spread in different offices, without an integrated team with members who trust and know each other.

It is indeed difficult to build a team when working remotely from each other. You can try to simulate watercooler experience online using a company-wide online chat. We also encourage people to write weekly email updates about the work they did in the previous week. However, we also believe in real life meetings, and that is why we still have an office where most of the team can and do work every day, and company retreats every few months which ensure that the team meets physically every so often.”

Obscure communication instead of transparency

Communication transparency is absolutely paramount, and it is the CEO’s job to ensure that the correct pathways are made available for everyone under his/her management.

When there are many people working on the same project, it is imperative that measures are taken that everyone is on the same page as much as possible. Emails, obviously, will become a useful tool, and especially group emails where all the people involved in a particular project can receive a CC of each and every piece of correspondence that goes out.

Ela, our Project Manager Leader puts it in her blog post why we CC all the emails:

Transparency is the key word here and it is not reserved for clients only, e.g. for reporting purposes, but is applicable for the whole team. [...] The other benefit of CC’ing is the instant flow of information. We don’t waste time on forwarding emails back and forth. And very often, when you are focused on a different task, someone else from the team can reply faster and more precisely, even if s/he is not the direct recipient.

Of course, emails are not the only means of communication, and the CEO should ensure that plenty of other channels are made available for complete transparency as well.

Ignoring knowledge transfer/exchange

It’s simply no good keeping all the knowledge and information of a product or a project too close to your chest. CEOs can sometimes do this, perhaps in an effort to try and keep certain business processes separate, but, at the end of the day, building and nurturing team spirit is what’s important. The culture of content sharing encourages to promote and support internal and external knowledge to reinforce team morale and collaboration.

Sure, the development team will probably have no influence over the marketing team, and vice versa, but where CEOs get it wrong is when they create an unnecessary segmented environment across the workforce, instead of allowing all of the knowledge be shared will everyone as part of one large, inspired and creative team.

Knowledge sharing within teams is also important, of course. CEOs should take the measures to set up the pathways that make this possible. We use workshops, an internal wiki, webinars, podcasts, books, and online chats.

Insufficient business data protection policy

Your business data – including your client’s data – are serious matters of security for your company, and can never be taken too lightly. You will recall only in November last year when cybercriminals hacked into Sony and successfully managed to steal the company’s sensitive data and paralyze its operations.

Now, Sony is a huge enterprise, and will have no doubt been armed to the teeth with the latest and greatest in sophisticated digital security – but still the hackers managed to find a way in.

Startup CEOs may feel that their company is not yet big enough to attract such attention from cybercriminals – but this just simply isn’t true. It is the ‘job’ of the hacker to exploit each and every weakness in each and every company that he/she can possibly infiltrate – and that means your company as much as it does any other. In your excitement to get the business off the ground, security might not be at the forefront of your mind. But, the bigger you get as a business, the more tempting target you will become for cybercriminals.

So, right from the outset, as the CEO it is your goal to ensure that all of your important business data is protected, and our blog How To Keep Your Business (And Customers’) Data Safe Online will tell you how you can achieve this feat.

Ignoring the opinions of employees and failing in productive Feedback

Many CEOs realise that part of their role is to give feedback to their employees, though some don’t realise that to be truly effective not only as a boss, but as an active team member, then they have to be accepting of feedback from their employees as well.

A great CEO will understand and appreciate that he/she doesn’t know everything, but it will be a real test of his/her character to embrace a true culture of two-way feedback.

Feedback, however, no matter which way it flows, must always be productive, and it can indeed be rather difficult to get the balance right. The challenge, as explained by Netguru project manager Paulina in her blog post about productive feedback is to:

Give feedback that will improve future situations while not making things worse or offering nothing actionable.

It’s not just for criticism, the same goes for praise too.

The most common pitfall is thinking that giving personal praise is the same as giving feedback," says Helen Timperley in the article The Power of Feedback in the Review of Educational Research.

Ignoring customers’ needs and feedback

A good CEO needs to listen – really listen – to his/her customers’ wants and needs. It’s no good thinking that you know best – you don’t. Usually, the customer has their own vision of the product, and it is your goal to give them precisely that, or even better - to advise when requested and take a proactive approach.

And that goes for every area of the business. The decisions you take as a CEO need to be based on your customers’ wishes and requests, and nothing else. Cost factors can’t really come into the matter, for if you aren’t building something that your consumers have told you that they want to buy, then they’ll look elsewhere.

The majority of your revenue will be coming from your existing customer base, so it’s essential that you listen to their feedback and do everything that you can to keep them happy.

Hiring the wrong people

Part of the CEO’s job is to find the right people for the right roles in the business. Hiring the wrong people can be one of the major pitfalls when aiming for growth. It’s not always easy to get right – especially for startup CEOs who may have never had to tackle this before.

However, there are some tips that can be followed in recruitment efforts - our HR/Marketing Manager Marianna has posted her point of view on hiring the right people for a startup, which includes:

  • writing a suitable job offer,
  • understanding that a perfect CV is not enough,
  • working as a team when interviewing,
  • picking The Perfect Match.

As you can see, there are many factors that can go wrong for a startup's CEO - hope this post will prevent you from making these mistakes and help you with customer relationships and team building.

When thinking of improvement, why not take a look at your business' website? Here is a look into the most common mistakes your website may suffer from.

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John Waldron

John Waldron is a technology and business writer for markITwrite digital content agency, based in...
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