The Biggest Difference Between a Corporate CEO and a Startup CEO

Startup CEO's Need To Be In The Elevator All The Time

I’ve been around a number Corporate CEO’s both in my corporate and consulting lives. What these CEO’s have in common is the capacity to craft and articulate the view from 50,000 feet. That is, to craft and articulate the big, hairy vision that the company seeks to accomplish, and the major strategies to enable this vision to happen.

This huge responsibility ALSO falls on the shoulders of the Startup CEO.

The big difference is what happens after. The Corporate CEO will then DELEGATE. She will assemble her MANCOM, communicate the 50,000 foot vision, and ask them to carry out her orders. Seldom does she get her hands dirty, and with very good reason – she has to take care of the Big Picture.

The Startup CEO, meanwhile, will do most of the heavy lifting AS WELL.  The more nascent the startup is, the larger the heavy lifting of the Startup CEO will be. The Startup CEO NEEDS to be on the ground simply because there is simply little or no organization to carry things out at the detail or standard she wants.

This distinction makes huge difference.

Whereas the Corporate CEO would tell her Sales Director “let’s call all the major accounts and push this new product of ours,” (and the Sales Director would probably bring down that directive two more levels down), the Startup CEO would  begin doing the calls herself. This is literally something I know a number of startup CEO’s have done.

This ability – the skill of deftly shifting between 50,000 feet AND 50 feet on the ground, is a crucial, crucial skill. While the Corporate CEO has to deal with much larger scope and  sophistication, the Startup CEO has to deal with the difficulty of rapidly and humbly changing hats very very often.

It is very easy to lose track of the former while working on the latter, and vice versa. For example, if you are busy in the trenches selling your product with customers, it’s very easy to get consumed by the detail and by numbers and forget about the overarching strategy. This is dangerous of course, as the startup relies heavily on the CEO to provide big-picture thinking – and ensuring the fledgling firm doesn’t fall from the path.

At the same time, let’s say you’ve just done your super strategic business model/vision for a product, and you’re feeling mighty proud of the product of your mental weightlifting, it takes quite an effort to motivate yourself to dive in and start doing the dirty work yourself, such as driving around to deliver items yourself, or picking up the phone to call 30 people in the next 2 hours, or washing the plates after you eat. Of course, without the groundwork, nothing would happen.

This is what makes the job of a Startup CEO quite challenging – she needs to be ready to ride a high-speed elevator at any given time. This is also why I think it’s such a tremendous, tremendous learning process. Got an idea? Go do it. That’s end-to-end learning.

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With great FREEDOM comes great responsibility

When I took the leap to fulltime startup founder back in 2008, the very first thing I felt was total liberation. Suddenly, after a solid decade of bosses, schedules, rules, and policies, there was...beautiful freedom.

I could do whatever I wanted anytime I wanted!

The first few months of this were so liberating. I would go to the office late, work from home, or take long lunch breaks – without any immediate consequences.

If you are a stickler for structure and rules – then this would probably be a hellish experience. If you are a bit of a rebel, like me – then this is heaven. I make the rules. I answer to myself.

Of course, I’d love to tell you that it ends happily ever after, that an entrepreneur’s life is really about doing whatever you want at anytime.

Well, yes and no.

Yes, there are no immediate ramifications to your daily decisions on where to allocate your time. There are no formal letter warnings, reduced leaves, getting scolded, getting a salary deduction, or even getting fired.

What I discovered though, was that the ramifications of my actions (or inaction) come a bit further down the road.

When you put up your startup, what you will discover fast is that the time and effort you put in the startup has a DIRECT correlation with your bottom line, and in turn, your capacity to pay yourself.

For example, early on, I was in charge of sales. I remember that there were times when I would have to cut my salary for particular months so we can continue to pay employees. I could actually trace these cuts back to weeks where I knew I could have called more people or have done a better job following leads up.

Direct correlation. The more you work, the more you earn. The less you work, the less you earn. It can’t get any simpler than that.

This is very different from corporate, where like clockwork, you get the same amount of salary on the 15th and the 30th no matter what happens or how you perform.

So yes, the startup owner does enjoy the freedom to dictate what transpires in her workweek. If I want to take a leave the whole next week to go to Boracay, I can do so. No one would stop me. I could cancel all my meetings with my clients and move them to the week after.

I just need to understand that the time missed comes with a direct opportunity cost, which, in turn, WILL have a direct effect on my own bottom-line, one way or another.

The younger your startup, the more direct this correlation will be. As time passes, you will have an opportunity to build your startup in such a way that it can be more independent of your time. (If this is the goal though, you might need to rethink why you put up a startup you want to escape from in the first place)

Before that happens though, you gotta give your baby all the time, love, support, and yes, the necessary structure it needs to grow.

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Why Uncertainty Is Your Friend

Do you know what you will be doing in your job in 2 week’s time? In 2 month’s time?

I did. I knew my HR routine for the day – around 10 email requests, 2-3 interviews, 1-2 disciplinary cases to type up, perhaps one meeting with a manager who either wishes to hire or fire someone. I’d also meet with the occasional employee who wants to talk to me about resigning,  and perhaps a general meeting with other managers if it’s a Monday.

Then it would depend on the time of year. Mid-year and year-end, I’d also be calling managers to submit their late performance management forms. First quarter? Meetings on increases and promotions. Summers, I’d have meetings about the company outing. Rainy season – perhaps there’d be inquiries on re-evaluating that policy on leaves and absences due to typhoon.

So give me a random date – and I can give a reasonable forecast of what I’d be doing.

You know, I’d bet a lot of people in corporate can give a similar, reasonable forecast.

Doesn’t that, you know… suck?

Certainty is overrated. Certainty is boring.

Don’t we hate predictable movies and TV shows? Isn’t uncertainty why we watch sports? We want to be thrilled by the battle of who comes out on top. The more evenly-matched the protagonists are – the more uncertain the outcome is – the better.

Being an entrepreneur, certainty is the first thing you throw out.

I was a ten-year corporate lifer before I leapt into startup life, so yes, having so much uncertainty was certainly scary. But over time, I have found that uncertainty is liberating.

Not knowing what I’ll be doing in 2 weeks is a gift. It’s a gift because it means I have control over what I will do in 2 weeks – and I know it will depend on what I’ll be thinking at that time.

It’s a gift because it also means that what I choose to do now has an effect on what will happen in 2 weeks. If I choose to put a lot of emphasis on sales today – that might mean that in 2 weeks I will be negotiating contracts. If I emphasize hiring today, then it increasingly means that I’ll be interviewing people in 2 weeks.

It’s a gift because it means I am quite equipped to pounce on opportunities should they arise. If in two weeks, one of the people I’ve been wooing to work with me suddenly wants to have a talk on the merits of leaving the corporate life – I can make an invite for coffee that very night.

Uncertainty means you have choices. Uncertainty is a gift. Learn to embrace it, to handle it with grace.

A Warning to the Dreamer: The World Will Make You Reconsider

This Is How The Status Quo Looks Like

Two friends mine are taking the leap.

One is a longtime banker. She is practical and very OC. She is married with one son, who is in his teens. She has been planning meticulously for a long while to take the leap and go into pre-school teaching, and ultimately, to owning a school. The past few years she’s been busy finishing her MA in Education. Late last year, she was finally going to submit her resignation.

Even before she got to talk to her superiors about leaving, she was suddenly offered a substantial raise and some other perks.

This led her to reconsider her decision.

My other friend has been in the FMCG business for a long time as well. She works as a brand manager for one of the bigger brand umbrellas in the country. She’s bright, smart, and always seems to do well in whatever company she goes to. She wanted out of the rat race though, to pursue her heart’s desires. So she gave her resignation, a number of months in advance even, just to be fair. How did the company respond? By giving her a substantial raise and assigning her to a team where one of her close friends was in.

This led her to reconsider her decision.

My banker friend had the will to push through with her resignation. She now teaches kids, to which she expounds “I’m so happy. This is something I would do for free.” You just know that her eventual school will be built by passion and love for the game. (Isn’t that a place you’d want to send your kids to?)

My second friend filed her resignation and is now counting the days down. I pray she doesn’t reconsider anymore.

When I took that leap a few years ago, my bank account (my “reserve”) was virtually wiped out by a new banking policy instituted the day before I left my day job.

This led me to reconsider my decision at the time.

Bottom line: if you are planning on taking that leap, the world will NOT make it easy on you. It will fight frantically to keep the status quo. It will either show you even more rewards the status quo brings, or more risk if you don’t choose it. And as the countdown ever draws closer, it will have aces up its sleeve.

This doesn’t help at all of course, because you are already conflicted on the inside as well.

What if I fail? What if this goes wrong? What will people think? Oh, a raise? Now?! So, hey, maybe I’m not supposed to be doing this after all…

The World will test your resolve. No one likes getting conquered, after all.

What’s The First Rule of Startups? There Are No Rules!

Early this year at STORM, we began building a competency framework for use in the company.  This is one of the tools large firms use to align everything towards their vision. The logic was, as we got bigger, we would need these structures to guide us. Building a framework like this is massive work, and our HR guy, Dino, was assigned to work on quarterbacking the project.

Around two months ago, we were laying the finishing touches on the framework. We had our core competencies (behaviors everyone in the company should follow), and were finishing with the functional (behaviors everyone in a specific function/department should follow) ones.

Then, I recalled the “big” employee handbook project we did the previous year – something NO ONE EVER BOTHERED TO OPEN. I then thought “What the hell are we doing?!”

So I quickly called everyone to our conference room to say I wanted the project scrapped ASAP. Bewildered, Dino asked me why. I apologized and told him that I knew he was working hard on it (I probably assigned it to him in the first place), but that we have to scratch it out as soon as we can.

It was a distraction.

We’re fifteen freaking people, I don’t need a complicated list of behavioral indicators to ensure everyone is “aligned.” I know exactly what each person is doing.  If something were amiss, I don’t need a complicated report to give me the details. I’d rather look at you straight in the eye and talk about it openly and transparently.

So we scrapped it. I made sure any form of “job description” was also scrapped as well.

I hate job descriptions.

The lesser the rules there are in a startup, the better.  

Don’t concentrate on creating rules. Concentrate on creating culture. It is culture that should drive your startup. And I don’t mean the culture that you supposedly create from drafting those useless “Vision-Mission” statements that no one really cares about (Guy Kawasaki talks about this in the video below). Culture will emanate from you – how you act, what you say, what you stand for. If you are always late in the office, then that is the culture you will create. If you continually ask people opinions on what they think and encourage risk, then that is the culture you will create. If you hold people accountable – then that is the culture you create.

Rules in a startup are oftentimes unnecessary, and all most them do is constrict and distract. The time you spend crafting that 40-page employee policy manual is time you could’ve spent talking and learning from your clients. And guess what, NO ONE WILL READ your manual 40-page masterpiece anyway.

So what do you do? Aim to create as less rules / policies as possible. There will be policies  you should hang on to  – mostly policies on pay and benefits. But the rest? Scrap ’em.

Manage each person in your team personally and uniquely instead. Talk to them. Connect. Lead.

So if your question is,”what about HR policy in my new firm?” Take it from someone who used to make a living crafting those rules. Forget about taking care of HR policy, just take care of your people.

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Start-bucks Coffee.

My first startup, STORM Consulting, started as an idea in 2005, I talked about it with around 10 people – all potential co-owners I targeted – mostly in Starbucks. I then narrowed the field down from ten to two people and began building the foundation of the firm with my two new partners.

A recent startup, StreamEngine, (site is still in beta) which is launching this January, started when I talked to potential partners – mostly in Starbucks (some in Seattle’s Best).

A chunk of my time now I’m currently using by  talking to different people regarding different ideas – all in coffee places and dining areas in the metro, 30-60 minutes each, mostly after hours.

You want to know where to start? Talk about it with someone. Get that idea of yours out of your head and into a conversation. To properly nurture ideas, they need to be out in the open, where they can grow, receive feedback, and get the attention they need. The more you talk about it, the more your idea will become real, more palpable. Energy is generated, momentum is generated – both critical elements in launching a startup.

Ideally, you are also using this process to recruit for potential partners. This is very critical, because once the incorporation is done – you essentially become married to your partners. Listen carefully: Who is excited about your idea? Who can help you take your idea further? Is this person DIFFERENT than you in key areas (ideas, skill set, network)? Is this person SAME as you in the key areas? (values, principles, work ethic)

So you want to start? Grab a cup with a friend tonight!

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