I believe that great CEOs are not born, they are made. However, the attributes of what it takes to be a small business leader are continually distorted by articles and books based on the needs of large companies, little of which pertains to a small business.
The CEOs of many large companies climbed the corporate ladder by seeking out positions throughout their career, which gave them the experience to someday become a CEO. For the small business owner however, this is rarely the case. One day they were working for the man and the next they were heading their own company. Since most small business founders come from a corporate background, what past job experience makes the most sense? This post endeavors to look at the pros and cons of the small business owner’s prior career path towards making them successful business owners.
While most technology company CEOs have an engineering background, the career path to the corner office can also come from a sales, marketing, or finance position. Each path has its pros and cons
As we discussed in ‘Business Evolution” The evolution of a business tends to go thru 4 stages.
Founder Stage
The first stage is what I call the Founder stage and is often started with someone with a technical background who I call the Oracle. This makes sense since new businesses are often started to solve a problem that an engineer designs a solution for. These businesses are often called startups and have not gained the traction or stability yet to scale.
Business Development Stage
The next stage is what I call the Business Development stage, and is where the business begins to scale and requires a different kind of leader, who I call the General. The General has a more business and less technical orientation. In the development stage, being a jack of all trades is important for the leader and is the focus of this post.
Operations Stage
However, to complete the evolution, the third stage of business evolution is what I call the Operations stage, and is where real growth and specialization of skill is most valued. This is the stage of business that represent the target market for most articles and books that talk about what it takes to be a CEO. However, because of the high degree of specialization at this stage, the context of the role of a CEO has limited applicability to the small business owner.
Administration Stage
The fourth and final stage I call the Administrative stage and is where a company goes to die. The leader of this stage tends to come from finance or legal and often shepherd the business into extinction.
As we said, while founders of new businesses tend to have a technical background (the oracle) to advance to becoming a profitable small business they need a leader with more business acumen (the general) to get beyond the startup phase and begin to scale and become profitable.
Although all good business leaders need to be a “B” student in all disciplines, for a small business, particularly in stage-2 (Business Development), sales and marketing experience are held in particularly high regard. However, each discipline has its blinds spots which are as follows.
Marketing CEO
Pros: Marketing decisions tend to have a more long-term view, as marketing decisions made today see results far into the future. Since the decisions made by the CEO have longer time horizons, this experience is highly valued. Marketing tends to be more abstract in nature and less concrete which is more in line with the role of a CEO. Marketing efforts focus more on the targeting of larger groups of prospects, which are large data sets that are essential to make appropriate decisions necessary to scale a business. Marketing requires lots of research that include micro as well as macro analysis of the data essential to gaining the big picture and see what is working and what is not. Marketing involves deep thought and analyses to uncover the prospect’s strategic intentions, a valuable skill to guide a business in the right direction. Marketers understand the value of the many marketing channels that are available to them so they can use the best tools for the job.
Cons: Marketing efforts often deal more with data and less with real people. Since CEOs need to be good at face to face negotiators with investors, partners, and vendors, and marketing is less about 1-on-1 interactions, the lack of people skills can be a con. Marketing tends to be more creative and abstract in nature as marketers look for innovative ways to attract new leads. However creativity, which is coveted in marketing, tends to be a right-brained activity and as a result, many marketing people have poor financial skills which are more left brained.
Sales CEO
Pros: Sales efforts are closely coupled with revenue and financial forecasts, which are more left-brained activities that are vitally important for a small business to grow. Sales is about persuading others through face to face interactions so negotiations with investors, partners and vendors are clearly in their wheelhouse. Sales efforts take place in the trenches with real prospects. As a result of being closer to the prospect, salespeople are able to spot the real challenges prospects face so any solutions they define better meet the prospects real needs and wants.
Cons: Sales decisions tend to take a short-term view. Moreover, sales thinking tends to be more concrete in nature and less abstract. Shorter term and more concrete thinking are less in line with the role of a CEO. Sales is less about the data, so sales lack the insight provided by the data and analysis that may suggest that the business pivot to seize on new opportunities. Sales is far more about execution and closing the sale, so sales lack an understanding of the value of the various marketing channels necessary to build demand for the businesses offerings.
While I make no judgment call on whether it is better for a small business owner to have a marketing or a sales background, truth be told the General of a stage-2 (Business Development) company needs both. By listing some of the pros and cons from ascending from either career path to business ownership, we hope to give you a perspective to the gaps in your knowledge that need to be shored up to make you the most successful business owner you can be.
Do you have the requisite backgrounds skills associated with marketing and sale to make your business a success?
