By Brian Mitchell, CEO & Managing Partner.
As a small business owner and executive recruiter for nearly a decade, I’ve had ups and downs like any other business professional and like to think I’ve grown as a result of the varied learning experiences. As I look to scale out my own business and aid my clients in scaling out theirs, I’ve spent a great deal of time reviewing my 2013 company performance, where we can improve, empirical metric trends, anecdotal observations and predication about 2014 and beyond. In talking with many CEO’s of emerging internet technology companies about their 2014 planning, I hear some similar challenges and opportunities facing these executives. So whereas this isn’t comprehensive, here are a few resonating items I’ve gleaned as being on their mind.
KPI’s
Depending on the stage of the business – startup, growth-stage, mature, private, public – the key performance indicators differ, but defined metrics around an anticipated growth percentage are consistent throughout. New revenue growth, bottom-line profits, increased outside funding, valuations, EBIDTA, stock price – all of these number driven realities face the CEO depending upon the lifecycle of the company. Top line revenue growth vs. near- term profitability, which is necessary at this inflection point of the business? The goal to be acquired for a big multiple or go public in a certain timeframe – both require strong fundamentals in building a desirable and scalable business, but the end objectives require different strategic paths toward the goal. Only until the CEO has an acute awareness of the KPI’s does he or she consider the forward strategies and tactics for the company.
Expansion
I’ve heard about “the war for talent” so many times it has become trite, however it has not become any less accurate. Top CEO’s know that their best asset will always be their human capital and take the time to invest in this resource. Identifying, attracting, retaining key leaders in all departments as well as front line managers and individual contributors (especially engineering, product, and sales) are constantly critical. Some 53% of all business will expand U.S. new hires in 2014 with some of the biggest gains continuing to generate through technical, professional, and scientific service sectors. What is both encouraging and simultaneously scary is that these sectors didn’t have a big fall off in recent years (like construction or financial services which are making significant comebacks now) – so these anticipated hires are all new growth. The internet based companies we represent at GM Ryan understand that there was already a shortage of truly exceptional talent and the CEO’s understand that the challenge to recruit these impact players at a number of levels is not going away. It’s only getting tougher. So building internal referral and retention programs, branding an attractive corporate culture, hiring internal recruiters when effective, partnering with external recruiters when appropriate are all becoming increasingly important. Gaining market competitiveness via global expansion in Western Europe, Asia-Pac, and parts of South America remain of increasing focus as well.
Optimism vs. Realism:
The economy has largely stabilized, housing and jobs are much healthier, the stock market has soared, and investment dollars are back. With all that macro momentum, confidence is generally high as well. CEO’s are concerned about managing aggressive board expectations when the bullish outlook is so prominent in many sectors including digital media, marketing-tech, and SaaS. The CEO quandary: balancing the “motivational pressure” they put on their team and themselves with the expectations of the board, marketplace, and again themselves. Let’s face it – the CEO is a human being who feels career security pressure just like anyone else. They’ve carefully built their career to the point where they are CEO of a relevant company in their industry so leading that company to a pivotal success is vital to their own career management. They want to win and be viewed as a thought leader in their peer community. Maintaining unwavering decision-making integrity, with the help or hindrance of external pressures, is a vital characteristic the most successful CEO’s carry with them.
Of course far too many criteria and nuances exist across individual CEO’s and their company circumstances, but these three items are highly relevant and consistent. As you look at 2014, what are the challenges and opportunities you face in your own business? I wish you well in the New Year.