Small and Mid-Market CEO’s have unique challenges.
Whether they’re running a startup or a company with millions in revenue, every CEO must master certain skills to lead a successful enterprise.
1. The ability to motivate people.
The wherewithal to think several steps ahead and not just be in the moment.
2. The strength to exercise financial discipline.
However, the approximately 100,000 CEO’s of mid-sized companies operate at a major competitive disadvantage to the fleet-footed startups on one hand and the deep-pocketed public entities on the other.
ABLE TO MOVE RAPIDLY …
The small startup company can move rapidly, grow without significant resources and create groundbreaking innovations; all without risking an existing business.
The larger public entities have extensive resources to experiment with new businesses, offer new products and services; all without putting existing business at risk.
The mid-market company is too big to be as nimble as the small firm and has too much to lose to take the big risks of the larger company.
Yet the mid-market company must compete against the nimble small firm and the cash-rich large enterprise. And that’s only one of the issues that keep the mid-market CEO up at night.
THE VARY LARGE & VERY SMALL …
The issues are not only the competitive dilemma. Mid-market CEO’s are under-served by the various advisory communities.
Banks, research companies, financial analysts and investment banks all gravitate to the very small and very large companies.
As The Deal magazine said in an article: “For whatever reason, academics, bureaucrats and financial analysts all but have but ignored the subject of a detailed, quantitative assessment of the space in the middle.”
One investment banker quoted in the article put it this way: “The characteristics of middle-market companies are vastly different from either large or small businesses.
There are different business theories, different financing sources, different approaches to operations, different owners, managers and investors.”
WHAT SKILLS ARE NEEDED?
So, what are the skills needed by the mid-market CEO to meet the challenges that are keeping them awake at night.
Some of these include:
• Developing talent fast enough to keep up with the company’s growth. HR functions in mid-market entities often don’t have the resources or mindset to make leadership a priority.
• In professional services firms, hiring not just for domain knowledge, but for leadership talent.
• In companies with slower growth and a more static middle-management team, creating advancement opportunities for younger talent. This talent is the future leadership of the company.
• Developing unique, team-based compensation strategies that reward an increased level of motivation, creativity and focus from those individuals responsible for sales.
• Developing and implementing business planning processes that are more formalized than the smaller companies, but not a bureaucratic as those in larger firms.
• Taking a personal approach to partnerships. In one study from Harvard Business School, Partnerships ranked first in the survey of what CEO’s wanted to talk with other CEO’s about. CEO’s said that it’s time to replace the old “win-win proposition with a “this is what we have that you don’t” message and translate that into direct business impact.
EDUCATE STAKEHOLDERS …
It’s important to educate investors and the Board of Directors on the quality and skills of the current CEO and/or the plan to assist her or him in the development of the necessary skills.
The CEO should not hesitate to ask for outside help in taking the company forward if their skill development is a priority.
Revitalization Partners specializes in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations. Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.
