We recently spent a full day onboarding a new, first-time CEO for a recently acquired B2B SaaS business within our portfolio. After a grueling 7+ hours of orientation that was maniacally aimed at preparing this leader for great success, the new exec asked an incisive question: “That’s all helpful…but what are the “epic fails” you’ve observed by people in my position?”
What follows are 8 of my own “epic fails” as a first-time CEO. Yes, back in the day, I somehow managed to mess up in every one of these ways.
Lock 8 Partners works with numerous portfolio company CEOs, and I’ve seen similar challenging situations – OK, “fails” – re-emerge in some form or fashion. But, having personally botched these situations as a CEO myself, I hope to help our portfolio company leaders avoid such pitfalls.
Luckily, when caught early, I don’t believe any of these are truly fatal, or even a legitimate “fail.” Providing they are identified and corrected relatively quickly, it is just part of the process of becoming a seasoned and savvy chief executive.
Okay, enough set-up. Here’s the list:
- Thinking More = Better: As a first-time CEO, I was desperate to prove myself; and prior experience had convinced me that doing “more” was doing “better.” Like most execs, I had been rewarded in the past for taking on more (and more) responsibility, initiating multiple projects, and frenetically crossing things off the to-do list.
As CEO, that approach was dead wrong. Doing more and more as the leader — and asking the organization to follow-suit — just created confusion, exhausted people, and generated organizational turbulence.
As a first-time CEO, “focus is your friend.” Fewer, well-executed initiatives are almost always better than many scattered projects. At Lock 8, I know that successful first-time CEOs remain humble in their initial ambitions and keep things simple until they’re really on-track.
- Blindly Following the 80/20 Rule: I felt like it was my job as the CEO to get things 80% of the way to completion, and then rely on others to “bevel the edges.”
By assuming everyone would just “get-it” once I advanced things to the 80% mark, I created the biggest barrier to leading change, particularly when it came to establishing the foundational elements on which the business would be built over time. Such foundational “big rocks” include codifying the product vision, setting the strategic operating plan, defining target market prioritization, and articulating the brand promise.
There is a compelling argument for CEOs to flip the 80/20 rule on its head: engage your team to complete 80% of the work, and then you handle the remaining 20%. In any case, these efforts need to be driven to completion, with the CEO codifying them into easily understood artifacts, and repeating-repeating-repeating the message to all stakeholders.
- Always Listening to the Board of Directors: Wait…what…isn’t it the job of the CEO to listen to the Board?! Yes, well, sort of, but not always.
The problem is that board members often offer ideas with great intent, but often without having full context or a complete picture of a specific topic.
When my board members made suggestions, they were intended as just that — things for me to consider. But I took them as gospel, and as high priority directives. I really, really wanted the Board to like me!
Dropping everything to make requested alterations to a report, network with some referred associate, or research a prospective adjacent market meant I often sacrificed the one thing the Board truly cared about: driving long-term enterprise value in the business. It took too long for me to learn how to filter ideas from real directives - and how to politely, but firmly push-back when I felt that remaining single-mindedly on-task was in our collective best interest.
- Not Listening to the Board of Directors: Hold on…this is a total contradiction from #3! Yes, it is.
Another mistake that I made as a first time CEO was expecting the board to always give me clear directives. Good board members rarely lay out guidance in stark absolute terms. Rather, their input is often nuanced and subtle, appropriately leaving room for interpretation based on reality on-the-ground.
Unfortunately, failing to recognize this nuance and missing important warning messages is a big mistake. For example, when a particularly thoughtful board member calmly - but consistently - raised concerns to me about our progress on a major product initiative, it didn’t faze me. It should have. In the end, we completely turfed the product release— a big setback for the business.
It’s not the Board’s job to micro-manage the business …and certainly not to pound the table about their views on tactical issues. The CEO’s job, however, is to listen closely, intently — aggressively even — to the shared observations and expertise, no matter how its shared, and act accordingly.
- Getting Caught Speeding: As a new CEO, I wanted to immediately establish my credibility as a quick decision-maker.
In their first days on the job, new CEOs tend to get asked for all kinds of things (e.g. approvals for new headcount, raises, bonuses, pet projects, etc.). Although it’s tempting for them to say yes to these, it’s a trap — a speed trap.
It’s far better to exercise patience, more fully understand situations, and act in due time. Any incremental spending I approved early-on almost certainly meant less budget to deploy later. And the reality of taking a hard line was that my ability to make more informed decisions only grew with time.
- Not Taking Vacation: Seriously…this was a gaff. I thought I had to be the hardest worker on the team. And that meant grinding like a machine for my first year+ in the big chair.
Predictably, I got burned out, became less sharp, missed easy wins, and (most notably) lost my problem-solving creativity. Eventually I took a vacation, but only after being prodded to do so by an attentive Board member (see #4 above).
After sitting on the beach for a week and recharging, the good ideas started to return. I came back with a new go-to-market approach that fundamentally improved our performance — one that was sparked by the needed rest. Athletes, artists, and performers don’t run themselves ragged before their biggest events - they practice self-care. New CEOs need to do the same.
- Choosing to Suffocate (or Suffer) Alone: When I experienced a severe cash crunch during my first CEO gig, it felt distinctly like I was suffocating. In many ways, cash is the oxygen that SaaS businesses need to survive. I thought that I could singlehandedly “Excel model” my way through the crisis.
My instinct to lone-wolf and suffer alone was exactly the wrong approach. What eventually breathed life back into the business was inviting input from experts, and empowering others to craft and contribute to the solution.
When stuff goes wrong — and it inevitably WILL go wrong — avoid the toxic temptation to go it alone.
- Expecting Perfection: I became a CEO based on my expertise as a go-to-market leader. Much of my identity as a leader was rooted in confidence that I could teach others the function I knew so well.
By extension, I felt I needed to know how to do ALL jobs as well as, or better, than everyone else. An impossible task. I set myself up for failure and ensured that I could never admit my shortcomings or my vulnerabilities to anyone. This was most humbling. Perfection is not the goal; it is the enemy.
CEOs do not need to be better than everyone - they simply need to nurture an environment/culture/business conditions where everyone else can be their best.
Quick closing: Hopefully these can serve as a safety beacon, helping others to avoid them. These remind me of so many other lessons learned that I may have to compile another list!
