Steven Schwartz and Bob Bausmith’s Essential Advice for Tech CEOs
Bob Bausmith and Steven Schwartz serve as the two Managing Directors for CEO Quest New York. They both have impressive backgrounds in the startup and large enterprise worlds. At CEO Quest, their mission is to serve tech CEOs at all stages of company development.
In this article they share their top tips on leadership, hiring, and company scaling.
1. Leadership — “Leave your ego at the door.”
When coaching a CEO, where do you start? For Bob, it’s always with people and leadership.
“People and leadership is job #1. Always. You can have a great idea but if you don’t have the right people on the team, if they aren’t fully aligned and if they aren’t inspired, you won’t be able to execute.”
Effective leadership can be summarized in two simple words: “Serve first.”
“Your role as a CEO is to lift up the people in the organization and help them to be successful. It’s not about you — its about achieving a bold vision through others. You may be the visionary, you may be able to be a huge motivational speaker, and that’s important, but at the same time, you need to be the servant leader, at the bottom of the org-chart.”
In response to the same question, Steven underscores the power of leading by example:
“Culture is open-sourced, but it ends up being primarily about values. These values influence human behavior. As a leader, you can create a list of values, but at the end of the day, you have to act consistent with them and act to reinforce them. People are going to recognize and follow actions more than words. To be a leader and CEO of a rising organization, it’s really up to you to show how serious you are about this, how much it means to you, and truly lead by example.”
“Companies are built on people, not products. If you can figure out how to unleash the potential of every person in your company consistent with a shared mission, vision and values, you will build a great company.”
2. Hiring — “Hire slow. Fire fast.”
As a company grows, hiring becomes critically important. For mission critical roles (the executive team, top enterprise sales execs, top architects, etc.), the future of the company depends on your choices. For the executional skill positions, your selection criteria are critical, as is your capacity to track and act on performance. For lower-level repeatable roles, speed to hire and capacity to act on performance are most important. In his book People Design, Tom Mohr highlights the importance of competency — having the right people in the right positions. Bob agrees. “Hiring is the most important, and probably the hardest job the CEO has.”
“Take the time to hire well. The best prospects will come through referrals. As you interview them, test for competency and culture fit. Do they have the behavioral mindsets that fit well into your aspirational culture?”
“I summarize my philosophy around hiring in saying ‘Hire slow. Fire fast,’” Bob concludes.
Steven echoes the importance of hiring. The competencies required when you are early stage are different than the requirements for later stage companies.
“CEOs need to really understand the value and inflection point the company has achieved, and what inflection point it must next achieve. Look 18 months out — where will we be if we are successful? What will it take? That will inform your hiring.”
“Understand what the lifetime value of your product is because that is going to define the boundaries and constraints from which you can operate. From there, you can get into people design and see what gaps need to be filled.”
“From a hiring perspective, you need to be methodical. Take your time. It’s built on trust. You want to make sure you hold everyone accountable and instil a culture that helps innovation thrive. Set a consistent set of values that align with your mission and vision.”
3. Scaling-Up — “ Focus on what’s important right now.”
When quizzed about top tips for CEOs moving towards a funding round, Bob says it’s all about focus.
“Successful CEOs use constraints to prioritize. They focus only on what is critically important to the company at any point in time.”
In the beginning, a CEO must create something that promises real value to real customers. Then she must find signal of product / market fit. Then she must prove the product can be sold — she must demonstrate repeatable performance. Then she must tell a winning story to investors. The story must artfully unite traction (the proof points of progress) and opportunity (the company’s future potential) to create excitement.
All of this requires one eye on the future, and one on the present. “There’s an old Japanese proverb: ‘vision without action is a daydream, action without vision is a nightmare.’”
For early stage companies, Steven points to the supreme importance of effective customer discovery.
“I’ve seen a lot of issues with companies not taking enough time with customer discovery. You need to understand the market, top priority segments, and inside the segments the key personas (buyers, approvers and influencers). You need to understand the exact pain point that is being addressed, by segment, by persona. This leads you to a clear value proposition and competitive positioning. It leads to better products. If you don’t clearly understand the customer, you don’t understand anything.”
“So my top tip probably would be to take the time, especially in the early stages of company-building, to do appropriate customer discovery and to test hypotheses. Don’t spend a year building a product and then start to see where that product might fit in the market.”
Final Thoughts — On being a CEO
As CEO advisors, Bob and Steven understand the challenges and the pressures involved in leading and scaling a technology company. They are honest in their assessments and committed to pushing leaders to think outside the box and move towards success.
“There’s a tendency to believe that there’s a right and wrong answer,” says Bob. “Grey is okay. There’s a lot of grey in being a CEO.”
“It’s a very hard job,” says Steven. “You’re sleep deprived. Early on, you do everything, from accounting, to billing, to sales, to fundraising, to marketing, to hiring. There are a lot of moving pieces, and they move quickly. In spite of the chaos, a CEO must constantly evaluate what decisions to make and how to make them. On average, CEOs make 40 critical decisions a year. If you can elevate the quality of those decisions, you make a huge impact on your company’s future. A strong advisor is the best gift a CEO can give to himself or herself. Find one that has been on the journey and has done the work to deeply understand the applied science of company building.”
Check out other recent interviews with Bob and Steve here.
For more on Steven, Bob and CEO Quest, visit http://ceoquest.com/team