Dear LLR Friends,
LLR Partners celebrated its 20th Anniversary in 2019.
Over the past two decades, we have invested in over 100 companies to help accelerate their growth. It has been a privilege and an education to work with so many talented founders and CEOs during this time.
In keeping with our commitment to share the knowledge gained, we recently asked our past and current CEOs, “If you were sitting down with a first-time CEO, what would you tell them about leadership and running a business?” The responses poured in and we thank them for their generous and wise thoughts.
Here are some of their best insights. We will add to it over the next 20 years, as we all continue to learn. As we like to say, we’re just getting started.
All the best,Discover More
37 CEOs, including:
37 CEOs, including:
37 CEOs, including:
37 CEOs, including:
37 CEOs, including:
37 CEOs, including:
Be extremely confident and extremely humble. Know you can accomplish amazing growth, but also know there is no way you, as CEO, can get there by yourself.
An organizational chart may give you authority, but only actions and staff buy-in make you a leader.
There is a difference between people who want to win and people who don’t want to lose, and between people who look at the success of the collective as more important than their individual success. Teams have to make tough choices. If everyone is focused on the team winning, those choices are easier and less political.
Always do what is best for the company. This will deliver the best value to your customers, staff and investors.
Leadership is about people – not numbers, goals, or initiatives. If you don’t have a commitment to people and their success over that of your own, you cannot truly lead your employees.
Surround yourself with people who are smarter and better than you. This has been one of the most impactful strategies in my life. It accelerates my learning curve and expands my thinking.
Know your strengths and weaknesses and hire people whose strengths are your weaknesses.
An effective CEO should focus on facilitating great decisions rather than always making them. Hire the most talented team members you can and then cultivate an environment that encourages them to speak up so great decisions and action plans are the consistent result.
Create a culture where people are not afraid to share their candid feedback. Be genuinely open to dissenting opinions, otherwise you will find yourself in an echo chamber.
Change is easier when you listen first. Buy-in on change requires openness which only comes from employees feeling like opinions are valued and heard.
You cannot be everything to everyone. Build a great team and trust that team to lead.
Make sure everyone has their own goals that align to the company’s. Early CEOs have a tendency to establish and state their goals, and then assume the team understands them unless they change. Reiterate company goals 25-40% more often than you think is needed.
Do not accept anything less than top talent in your staff roles. You need both disciples of the agreed vision and people confident enough to tell you when they see an issue.
Identify the key drivers that will create economic value for your organization. Then make sure everyone in the organization—including yourself as the leader—is aligned to these goals and tries to contribute to at least one of them each day.
You have to stay focused on what matters. There may be three to five things that really matter to your business; that is what you have to focus on every day. It is easy to get distracted by shiny objects.
Focus on the small handful of initiatives that will transform your company. You will be tempted to have long lists of initiatives, and your company can suffer from overload and fatigue if you try to address them all.
The temptation is strong, at times, to broaden your capabilities beyond your organization’s skill set. Stick to your core competency and work hard to not deviate.
Build a go-to-market strategy that you know you can make work. It will be virtually impossible to grow in a sustainable way without dedicated and committed managers at your side or without a proven strategy to reach the market.
There are things you cannot know before you take a small step forward, and taking that small step may clarify things enormously. Figure out what your “small bet” in this situation will be. What is the meaningful test you can run that will help you figure out what to do, without setting you back too much if you get it wrong?
Think big and be bold, but be nimble and quick on the small stuff every day. In today’s world, speed can be an advantage. You will make mistakes and that’s ok.
Empower your people to take risks, especially when it comes to making decisions with imperfect information. It’s ok to be wrong once in a while as long as the decision-making process was fact-based.
Don’t be afraid to go outside your comfort zone every once in a while. No matter how much we’d like, some decisions are beyond analytics, and gut feeling based on experience is the best you can do.
When you make a mistake, stand up in front of your team and own it. Tell them, “I screwed up and this one is on me.” You will gain their respect and, they will know it is ok to fail, which is what you want. If they aren’t making mistakes, then they are not taking enough risks.
Good news should travel fast but bad news faster. When in doubt, over-communicate with your board.
Pick a strategy, stick with it, and give it time to play out. But pay attention to the performance data and don’t be afraid to pivot.
What got you here won’t get you there. You must constantly change your approach.
Be flexible. The business world is dynamic and you never know what’s around the next bend in the road.
As you grow and open multiple offices, the CEO must make time to visit them all. You may think you’re too busy, but you’re not. Make time and never cut back on this. You’ll never get to know everyone personally, but committing the time to connect matters to the employees.
As CEO, you don’t know what you don’t know. Your first 90 days should be focused on questioning what you’ve been told, learning what the real situation is and where the obstacles to success are. Schedule a ton of one-hour conversations with employees and ask some very simple questions, like, “If you knew you could not fail, then what would you do differently from what you are doing today?”
As companies start to scale, they run into problems that may seem unique but have been solved many times before. When the time is right, be open to outside advice from management team members in larger companies. They bring valuable expertise, and you can adopt their ideas and methods rather than trying to sort out what works.
Whether you have a problem that is large or small, if you don’t know the answer after thinking about it for 5 minutes, go ask someone else. This creates a culture of sharing and helping in your organization and is a win for all parties involved.
Gratitude is the most powerful motivator of people. Showing people their work is important and impactful, and that their efforts are truly appreciated, is far more meaningful than compensation or titles.
Nurturing and growing leaders is the most important thing a CEO can do. Leadership is the ability to inspire others to achieve what they may have thought was impossible, and that begins with the CEO.
When a member of your team illustrates the values you want to encourage, recognize it publicly and loudly. This reinforces the importance of every role in achieving success.
Pick a really good CFO who can communicate well with you and with the investors. Knowing strong financial management is in place gives you the freedom to run the business.
The leadership quality of your CFO is mission critical… not only their analytical and problem-solving skills, but also their ability to partner with sales and operations in a supportive and collaborative way while building a talented team of financial partners for the business as a whole.
To be successful, you need to pick a private equity partner that aligns with your personality and operating style. Some firms micro-manage. Some have standard playbooks for CEOs to follow. Others let you run the business your way, but are there to help in a heartbeat. You need to find the right culture fit.
Sit down and have coffee with other CEOs in your potential investor’s portfolio. Learn how the investor reacts in good times and in bad. Find out if this is their first fund and where you fall in the birth order of their portfolio. Do their timelines work with your own exit horizon? Does their approach match what you are driving for?
Building a strong team goes without saying, but culling the non-performers out and constantly upgrading the roster is seldom done well, but it’s a large determinant of success.
An intense focus on getting the best senior leadership team in place is critical. Many times, some members of the team that got you to your current level are not going to be effective in helping you scale to the next level. These decisions are tough, but time is of the essence, and it’s even more important if M&A is part of the strategy.
Stay positive, even in the face of a big loss or difficult times. It’s so easy to turn negative, but how you act and lead when times are tough will define you as a leader and others will follow.
Communicate with your employees and investors often and transparently as to what’s going on (good and bad) and what your plan is. They sense it all anyway, and are more likely to buy into the company mission if they feel those in charge are open and realistic about the state of the business and the actions it drives.
You have to force difficult conversations. Conflict, unresolved, will fester and most people will not engage to address it. As CEO, you have a top-down view on everything and it is amazing how many working situations and process conflicts would be settled if people just talked to each other. But people avoid conflict at all costs. Force the conflict. Embrace it. Resolve it.
Have the courage to be simple. Simplicity is an art form. Simple messages travel faster, simpler designs reach the market faster and the elimination of clutter allows faster decision making.
Figure out the two or three things that really matter, put really good measurements in place and let the others simmer. It could be getting expenses into a good place, it could be getting a product launched, getting a sales process in place or hiring a key role. Trying to do too many things at once means not doing anything well.
Coming up with core values is not that complicated but recognizing the behaviors that demonstrate those values and making them part of the daily fabric of the organization is much more challenging. It requires focus, starting with the CEO.
Unleash your passion, be authentic, transparent and strive to make a difference in the community you serve.
As the leader, you are constantly being watched by employees for insights on what you, and therefore the company, values. Commit to living up to the ideals and values of the culture you want to instill. Your character profoundly impacts the culture of the company.
Focus on integrity. There are a ton of smart leaders out there that may be smarter than you, but not a ton of people of integrity. Be known for keeping your word and success will find you through the lasting relationships you are able to build.
Keep your foot on the gas. If you have momentum don’t let up. It does not always return.
Start hungry. Stay hungry. It’s a sprint and a marathon in one race.
Always be curious. Curiosity prevents complacency from setting in, and complacency is the sure death of any company.
Business is war. There is always someone trying to take your position. Get your team focused and behind your vision and run like the wind.
As a CEO, don’t underestimate your ability to influence all things in your company. Everyone is looking to you for answers and guidance. Consider yourself always “on stage.”
Being CEO isn’t a job; it’s a life. It’s hard. Sometimes the reward seems far away or nonexistent. The best people will want to work with and for you when you can find the reward in the effort, find the satisfaction in the challenge and find the fun in the journey. When you stop having fun, it’s time to move on.
LLR believes in creating value through partnership. We are grateful to our team, investors, portfolio companies and friends for partnering with us over the last 20 years. We look forward to sharing future successes as we continue to learn, network, collaborate and grow together.