Which of these employees is better trained to perform his or her job in a small to mid-market company?
Does it surprise you that a CPA is almost always better trained than a CEO? In fact, a CPA receives 4 to 6 years of formal education, has passed a difficult certification test, and then typically spends up to 5 to 15 years and 10,000 hours in the field, studying a defined set of principles using a standard set of tools to perform their job and become an expert.
There are no self-appointed CPAs.
There are, however, many self-appointed CEOs at small to mid-market companies. And most have been trained in something other than being a CEO.
If you think about it, there are two ways to become a CEO:
1. You can be hired to replace an outgoing CEO
2. You can own a company and appoint yourself CEO
For many mid-market companies, the self-appointed CEOs are really COs, or Chief Operators, because they haven’t received the CEO training or developed the skills required to successfully build tangible, measurable and lasting company value. Don’t confuse high IQ, strong EQ, good intuition and high risk tolerance, which most CEOs possess in some combination, for the basic core skills needed to actually be a qualified CEO.
CEOs that have developed those skills are in high demand. Professional CEOs can run almost any type of company with a high degree of success.
Professionally-trained CEOs for small to mid-market companies are usually only found in venture-funded, high-growth industries like technology or biotech.
When venture capitalists fund a young company, they almost always replace the founder with a professional CEO in order to gain the market traction and develop the brand. This occurs because a professional CEO has an entirely different skill set than the entrepreneur that started the company.
Entrepreneurs have the foresight, independent streak, guts and make-it-happen ability to start and build a company.
Professional executives have the skills, training and tools to build tangible, measurable and lasting value in any company.
For proof, take a look at just one of the most successful American companies in the last decade (and there are numerous other examples). Two founders built a great technology product, raised a bunch of money, gained wild user adoption and were on the road to success.
But their VCs almost took their money away because the founders didn’t hire a professional CEO within 12 months of taking the money. Larry Page and Sergey Brin waited much longer before bringing aboard a professional CEO, Eric Schmidt, to run Google. Schmidt ran Google from 2001 to 2011.
If you want to have a professional CEO run your company, you better have one heck of a sales pitch to lure one, or become one yourself.
Training for the CEO Role
In his book Outliers, best-selling author Malcolm Gladwell argues that to master any discipline – including music, athletics, chess, and business – one must spend 10,000 hours training and practicing.
That’s roughly 5 years of full-time, non-stop, focused training and practice. For the CEOs who are learning on the job, that means that part-time training and practice can last for 10 to 20 years to reach the mastery level.
I’m not picking on small to mid-market CEOs, or trying to create doubt about your CEO of your company. My point is simply that most CEOs are learning on the job. Some do very well, but others need resources, guidance and support along the way. Being a CEO is a difficult and often lonely role. I’ve experienced it myself 3 different times in my 40 year career.
The good news is that there are many different resources available for CEOs, from support groups like Vistage (the world’s largest CEO organization – I was a former chair) to consultants, gurus and training programs.
It’s been said that if you want to know what kind of company you deserve, simply look at what you’ve got! If you still doubt whether you fall into the “untrained CEO” category, ask yourself the following 3 questions:
- Compared to companies of similar make up, culture and size, how do I rank against other CEOs in terms of creating value for my company?
- What do I not know that could be limiting my company?
- Why are other companies beating me?
If you’re looking for recommendations on resources or training to build out your CEO skill set, connect with me and I’ll be happy to share my thoughts on what would work best for you or your executive team.