Business Essentials: What You Need, When You Don’t Need Anything

Your business is running great. Revenues are up from last year and profits are through the roof. You’re in cruise control and can sit back and watch from here.

Not exactly.

As the CEO, you already know that you should rarely — if ever — be in “cruise control.” But when everything is going well and there are no fires to put out, what should you focus your attention on?

1. A path to growth. 

The best time to be looking for money is when you don’t need it. Times of strength and relative calm are exactly when you should have conversations with potential investors. These types of transactions take months, not weeks, so it’s key to get in front of them far ahead of a desired capital raise or transaction. Plus, talking with potential advisors, investors, or lenders when you don’t need money will give you the upper hand in the relationship. When the time for capital does come, you’ll already have lasting relationships with deal professionals you trust.

Keeping in contact with different advisors and investment banks within your industry will also help you stay apprised of the market conditions in your industry and get a sense of what types of valuations are being given to your competitors.

In baseball, your value in the open market is strictly based upon the last deal that was done at your position (all-star pitcher David Price recently set the market with his seven-year $217m deal with the Red Sox). In M&A, your valuation will in large part hinge on what other similar companies in the industry have gone for.

2. A right hand (wo)man.

Cruise control may not be possible, but there will inevitably come a time where you need to step back for a few days or even few weeks—whether for a vacation, illness, or a family concern.

For many CEOs this possibility builds anxiety, as they can’t imagine how the business will run without them.

That’s not good or sustainable. You need to have someone you look to and trust with the company when you’re not there (think Sonny Corleone’s Tom Hagen). If you have a COO or another trusted member of the C-suite, this is ideal, but your #2 could be any trusted senior employee. This person should be someone you speak to regularly about the business, who understands your goals and vision, and who can take over your day-to-day responsibilities when necessary.

Look for someone who complements your skill set and can play devil’s advocate at times, while still remaining loyal to your authority. Establishing someone in this role while things are going well will ensure chaos doesn’t ensue should you need to take time off unexpectedly.

3. An outside perspective.

No matter how tight-knit your team is, as a CEO there is always times where you will feel a bit alone. There will always ben certain topics and plans for the business that you can’t discuss with others.

Just because you’re at the top of the heap doesn’t mean you don’t need guidance sometimes too.  From hiring a new team member, to firing a key executive, to moving your business five states away, issues will arise that need to be discussed, but can’t be aired with other employees.

CEOs Need Mentors Too, reported a Harvard Business Review article earlier this year. In a study of 45 CEOs, HBR found that when business owners had mentors:

• “71% said they were certain that company performance had improved as a result.”
• “Strong majorities reported that they were making better decisions (69%) and more capably fulfilling stakeholder expectations (76%).”
• 84% “credited mentors with helping them avoid costly mistakes and become proficient in their roles faster.”

You might start by hiring a CEO coach, or by joining an executive group like Vistage, which helps provide private peer advisory groups for CEOs, senior executives, and business owners. Essentially, it’s a safe place for you to talk to other business owners having similar issues, brainstorm solutions, and get advice.