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The Most Common Challenges Facing Startup CEOs: Part 3

Written by Ron Close

Ron Close is a Senior Leadership Advisor at Portag3 Ventures and Sagard Holdings

In Part 1 and Part 2 of this series, I shared my observations about some of the more common challenges faced by many startups with whom I’ve worked over the years. I shared thoughts on the following items:

  • Perfecting a focused and compelling story;
  • Building and using an operating model for your business;
  • Embracing the need to balance the interests amongst customers, employees and investors;
  • Becoming an excellent people-manager;
  • Nailing your product-market fit;
  • Organizing for growth; and
  • Communicating effectively as a leader

In this wrap-up article, I want to offer some thoughts on a couple of issues I’ve repeatedly encountered but haven’t yet addressed in this series:

  • Managing difficult conversations and feedback
  • What do I have to do to get promoted around here?
  • Creativity and imagination for leaders

Managing difficult conversations

Sooner or later, all managers are faced with the need to have a difficult conversation with an employee. Part of the job involves giving feedback. While much of it is positive and pleasant, sometimes it is important to deliver messages that can be hard to hear.

It doesn’t have to be confrontational. In fact it isn’t a confrontation at all. It is an opportunity to “course adjust”.

First, establish the larger vision of what you (as “boss”, to use that old-fashioned word) are trying to achieve. Then reinforce the behaviours you see that support that goal and thank him or her for that help. Finally, share the behaviour you have noticed that seems to be working against your goal and ask for it to change. Wrap it up with a positive message of reinforcement and confidence.

Example: Armando really delivers results in your organization, but he can be dismissive and disrespectful of other team mates who have now complained to you.

“Hey Armando, can we chat for a minute? I need your help on something. You’ve heard me speak before about the importance of creating the right culture around here. I am absolutely committed to making this team the highest performing team in the company. The secret is having talented individuals who share a vision and passion for the outcome, who respect each other, and cover for one another when needed, and who really want to work together.

Much of your contribution, Armando, is rock-solid and I want you to know how much I appreciate the way you consistently deliver a quality result on time and budget. I would really miss your talents if you weren’t on this team.

But sometimes your team interactions can actually work against my goal of creating a true “team” and I need that to change.

Here is what I mean: At times, I’ve seen you be abrupt with or even dismissive of team mates. I know some of them feel quite distressed after team meetings that get testy. We all get frustrated…sometimes with the project we are working on and sometimes with the people we are working with. How we handle that frustration matters. I want to help you find ways to channel your frustration without damaging the team that means so much to me.

Armando, I care deeply about both what you do and how you do it. My comments here relate to the “how”. You are worth investing in. Your work is very good. But I need your help making every team interaction as positive and constructive as possible. I see this as an important skill for you to master in your career. And I know that with a little coaching and some effort we can turn this into a foundational strength that will serve you very well as your career progresses.

Does this make sense to you? Let’s chat a bit more about some of the past situations, about what alternative approaches might have worked better, and about our shared process for addressing this opportunity going forward….”

Companies have missions and goals that are larger than those of any one individual. Hopefully those goals are motivating and directional. Grounding your difficult message in that larger aspiration (building a kick-ass team, in this example) gives you, as boss, the moral bedrock to call out behaviours that work against your larger, noble cause. You owe it to the whole team to address these issues. No one else can do it…it’s your job. The earlier you have these conversations, the better. Management is a profession. Study it. Practice it. Get good at it.

What do I have to do to get promoted around here?

It seems that every employee has his or her own, personal career-clock…his own expectation about timing and readiness for promotion and advancement. Stress is caused when reality doesn’t match expectation. Here is a framework for promotability that might help you establish reasonable expectations.

To be promoted:

  • There has to be an available (funded, open, legitimate) position; and
  • You have to be seen by all (or at least by a critical mass) to be qualified and deserving.

Say a development team currently has twelve developers in total. Each manager can handle five to seven direct-reports and there are two managers already. A third manager simply won’t be needed until the team hits 15–20 people. So timing and the needs of the organization matter.

The easiest person to promote is the person everyone knows deserves the role. If you want the promotion, be the person who is broadly known to be ready, capable and deserving.

But what does it mean to be ready, capable and deserving?

Here are six specific attributes that you (or your people) can use to help you assess readiness for promotion. Each attribute tends to matter more, the higher you rise in the organization. For each, privately assess whether you have “beginner”, “intermediate” or “expert” status.

  1. Technical Competence (“What” you do): there is no escaping the fact that every job requires some level of knowledge, experience and subject-matter expertise.
  2. Stylistic Competence (“How” you do it): Do others want to work with/for you? Do you embody the values (ethics, attitude) of the organization? Are you a good communicator?
  3. Inside Relationships: Have you built informal, cross-functional relationships and alliances inside the company?
  4. Outside Relationships: Have you built external relationships that have strengthened the company’s brand, elevated its reputation, and established alliances that help the business succeed (recruiting, partnering, selling, industry associations and events)?
  5. Knowing Your Business: Do you understand how your business works? What is the “hard part” of succeeding in this industry…in this company? How is the company doing? What are the current priorities and why? What does management feel great about? Worry about?
  6. Self-Awareness and Improvement: Are you doing everything reasonable to understand how others view you, and to better yourself? Are you working to identify and address your own gaps?

If, in an honest self-assessment, you can say that you are nailing all six of these attributes, I would say you are clearly promotable. If not, you at least know where to focus.

Creativity and imagination for leaders

Effective entrepreneurs seem to have the ability to imagine a world, and then make that happen. The more detailed your dreams, the more likely they are to come true. For some startup leaders, the last time they were truly creative was when they formulated their original business hypothesis and plan. What need have we identified, for which market segments? What is the competition offering today and how might their product evolve? What product could we offer to best satisfy that need? How should we get our product to our customers? What should our pricing model look like? How can we do all this economically?

One common challenge for leaders as their business scales, is staying out in front of their boards and their teams strategically. There are just so many operational priorities that consume your day. And a CEO who falls behind his/her board on longer-term strategic thinking is doomed to always be reacting to their strategic questions and ideas, instead of driving and leading the charge. Yet it takes time to wonder and dream and imagine.

Imagine that tomorrow morning you get a call. The caller chats for while and then suggests an outrageously-good idea that not only promises to catapult your company way ahead of plan, but could even be a game-changer. Who called? What did he suggest?

Perhaps it’s a merger offer that fills a critical hole in your current product portfolio. Perhaps it’s an investment offer that not only provides cash to scale your business, but also brings along a very large base of qualified prospects into which you can sell very efficiently. Perhaps it’s a marketing opportunity that could elevate your brand awareness overnight. Perhaps it’s an opportunity to acquire a ready-made team of developers who suddenly find themselves available and want to join your resource-shy team. What is the best thing that could possibly happen to your company? Imagine it with as much colour and detail as possible. Then make that scenario happen.

Include your senior team and even your board in your imagining. Invite their ideas and allow them to add detail and colour. Discard the crazy ideas that don’t stand a chance, but laugh at those ideas and enjoy the freedom to think outside the box. Add layers of detail to the ideas that “just could happen”. This is fun and stimulating work. It’s the way real value is created. It builds confidence and credibility, and strengthens your team.

There is no reason why business has to be all about meetings, processes, OKRs and KPIs. It’s true that your rapidly-scaling company requires more process and overview and standard operating procedures to maintain integrity and control. But reserve some time for you to dream and imagine. Invite others into your dream to improve it. Selectively socialize your ideas with your board. Then live the dream and enjoy the ride!

We empower and invest in visionary financial entrepreneurs. Learn more about Portag3 Ventures at

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