Many CEOs and leaders struggle with how much time to spend on external issues versus internal ones. Their responsibilities extend to both. In general, CEOs of early stage companies should focus more on internal matters, such as developing a product, hiring the right teams for growth, etc.
As the company matures, however, the CEO can and should devote more time to external issues and relationships that are crucial for growth. After all, the CEO is often the only person in the company with the knowledge, experience, and authority to deal with external issues and relationships.
Here are four external groups CEOs should pay more attention to as their businesses grow.
1. Customers and Potential Customers
Building relationships with customers is obviously important at every stage. Even after they have a mature sales team, CEOs should invest time with current and prospective customers. Getting attention from the CEO can make customers feel more comfortable doing business with the company. In turn, the CEO can better understand their issues and needs as well as what’s happening in the market. This includes how the market is changing, whether it’s growing or not, and any influences that could impact each customer’s interaction with the company.
When visiting with customers, the CEO needs to stay “in character.” Too many CEOs quickly become VP of sales and try to close a deal on the spot. This behavior undermines the authority of the sales team and makes the company seem small and immature. Unless the deal is one that falls into the strategic partnership category, CEOs should leave it for the sales team and act like the leader.
2. Shareholders and Potential Shareholders
Shareholders need care and feeding from the CEO as well. In the early stages of the company’s development, CEOs can get trapped into spending almost all of their time raising money. While visiting with potential customers can yield benefits even with no sale, spending time with potential investors and coming up short is not particularly valuable. Before devoting too much time to potential shareholders, CEOs should ensure there is a reasonable chance they will fund the deal.
As the company grows, it’s important for the CEO to establish a regular communication pattern with shareholders to help them feel informed and confident in their investment. Even when a company becomes public and has a department dedicated to investor relations, CEOs will be required to visit with certain investors and analysts. They will expect it, because they often perceive the CEO as the only person who can speak authoritatively for the company.
3. Strategic Partners
Strategic partners represent an often-neglected but valuable resource for CEOs. Working jointly with other companies is always challenging. The CEO is the one person in an organization who can drive these kinds of relationships. By collaborating directly with his or her peer at the partnering company, the CEO can gain the commitment necessary for joint projects to work. Also, these strong relationships with CEOs in closely related companies can often pay off in strategic opportunities, such as M&A.
Because small companies can rarely afford to hire all the experience and expertise they need, the CEO should seek out advisors who can provide value. Many experienced executives are flattered to be asked to help out in an advisory role. They will often provide advice free of charge. Engaging them in a more formal and regular process requires offering some form of compensation in either cash or stock.
Vendors are another highly underused resource that every CEO has access to, usually for free. Meeting with key vendors can provide a tremendous education in a short period of time. Vendors can educate CEOs on everything from the latest thinking and trends in their areas of expertise to regulatory issues that may impact the business.
CEOs have a responsibility to get out of their bubbles and interact with critical outside issues and groups. The process can help improve strategic thinking, uncover opportunities and potential problems for the business, and better position the company for growth.
First appeared on Inc.com