As small businesses grow, the need arises for more layers of management. Oftentimes, the founder of the business becomes the CEO by default. Sometimes this works out, and sometimes it can lead to disaster.
Most small business owners are very talented in many ways, but do not possess the unique skills required to become the CEO of a larger company, even if that larger company is the evolved version of the small business they originally started.
So, how can CEOs prepare for the monumental job of running a large company? Here are some areas of focus that all CEOs should learn to master.
Allowing emotion to take control has proven the downfall of many a CEO. It is important to be able to avoid the drama of daily business and keep eyes fixed on the prize. Campbell Soup CEO Douglas Conant stated in Forbes that “Your EQ (Emotional Quotient) has to keep up with your IQ.”
This concept is so important that business schools are starting to test for emotional intelligence to identify those with great potential. While emotional intelligence is difficult to teach, there are training techniques available that can help you learn to suppress emotional reactions and promote rational thought.
CEOs need to be able to communicate clearly and persuasively. CEOs need to build teams and get others on board with their ideas, as well as sell ideas to investors, and other stakeholders. This requires astute skills of reading an audience, understanding differing perspectives and making connections between ideas and the needs of the audience.
The best way to learn effective communication skills is to complete a comprehensive sales training program. There are many programs available, but at the end of the day, a CEO is a salesperson who sales ideas and wins others to their way of thinking.
If you forget history, you are doomed to repeat it. A well-rounded CEO must understand the history of their industry and the world around them. It is difficult to guard against potential pitfalls if you don’t know that they exist. Likewise, it is difficult to identify important opportunities without knowing where to look. By understanding history, these opportunities and pitfalls become much easier to recognize.
There is no short remedy for learning history. A comprehensive study is a lifelong pursuit. The best place to start is by studying pioneers and leaders in a given industry. Start from the beginning. Learn their greatest successes and failures, and try to relate them to the current situation.
CEOs are required to make many decisions without having all of the information first. CEOs must act like good detectives, taking the facts they know and piecing together the rest of the puzzle based on only bits and pieces of evidence. Colin Powell is famous for his 40/70 rule. He said that when you have 40 percent of the information on a given topic, you should start formulating a decision, and when you get to 70 percent, make the decision.
There are many courses available to hone the decision-making skills of CEOs. Alternatively, a look at case studies for important historical decisions can provide background into how effective decisions are made.