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How does one become an effective CEO? Unfortunately, there’s no manual or detailed step-by-step guide to help you out.
In Silicon Valley, where my company BlueVine is based, that question has been discussed and debated for decades. But even in the world-famous center of technology and business innovation, there are different and conflicting ideas on what it means to be an effective chief executive officer. Steve Jobs was, of course, the region’s iconic CEO, the most famous symbol of entrepreneurial success. But his image as a trailblazing innovator was, at times, overshadowed by his reputation as a brash, hard-driving boss.
Then there’s the down-to-earth, magnanimous management style of the likes of Bill Hewlett and Dave Packard, founders of Hewlett-Packard, and Dave Duffield, founder of PeopleSoft and Workday. Is it a choice between the tough boss versus the nice-and-friendly leader?
In my view, these are false options. In my own journey as an entrepreneur, confidence and humility are critically important. I came to recognize this as my business was growing. I needed people to help my business succeed, and to sustain and guide that growth.
I had to be able to sell my dream, my vision for my company. I had to convince people to see the road ahead through the same lens, to believe that the path was viable and exciting.
But I also needed to convince the talented people I was seeking to win over that I was an executive who would trust not just their abilities but also their judgment.
For a startup, this ability is even critical to your ability to raise financing. When investors look at startups, they ask: Is this business model sound? Is this company going to succeed?
Related: 10 Things Confident People Don’t Do
But they also ask questions about the CEO: Will the CEO be able to raise capital in the future? Will he or she be able to attract the talent needed to grow the company? Will the CEO be able to work with and learn from the people who will join the team?
Confidence and humility are also critical in another key job requirement for the entrepreneur CEO: the ability to make difficult decisions fast, and to just as quickly change course if the decision turns out to be wrong.
In many cases, being able to course correct quickly is way more important than being able to always make the right decision — which is actually impossible.
Making decisions only gets tougher as your business grows, partly because people will pull you in multiple directions. You have to develop the ability to receive and process advice and then make your own decision and say ‘No” to other suggestions once you’ve made up your mind.
But here’s one important tip: never, ever fall in love with your decisions. You must have the courage and willingness to admit it if you’re wrong.
I’ve found myself in this situation a few times. I’ve made decisions that I decided later were, to put it simply, stupid. We once built a new feature for our financing platform. It was my idea and we pursued it even though some of my team members didn’t agree with me. Eventually, I came to realize they were right. When we pulled the plug, I said “What was I thinking? I’m sorry.”
Some CEOs would balk at the idea of admitting a mistake. But arrogance should not be mistaken for confidence. To be an effective CEO, you must be able to show your team that you are there both to lead and to work with them as a partner and teammate.