Leadership

CEO Attributes for Leading a Company from Launch to Success

  • author image

Editor’s Note: InnovizeTech Software and its product, Sapience, is an early leader in India’s emerging software products story. Earlier in his career, InnovizeTech’s CEO and co-founder Shirish Deodhar founded two IT services companies, which had successful exits to Symantec Corp. and Symphony Services. Deodhar is also the author of the book, “From Entrepreneurs to Leaders.” In this article, he shares with SandHill readers his insights on personal attributes that are necessary for a CEO to lead a company from launch to mid-stage to success.

InnovizeTech Software is based in Pune, India, and started operations in early 2009. Its product, Sapience (meaning wisdom, astuteness and the intellectual ability to penetrate deeply into ideas), helps companies to increase work output by 15-20 percent – without requiring any change in existing processes. It’s a patent-pending, award-winning solution and the first such product that is designed for the enterprise. It gives managers the “big picture” about work effort while respecting and protecting individual privacy. Sapience is available in a SaaS model for SMBs and supports on-premise installation for select large customers.

Four key attributes of successful early stage CEOs

Success as a CEO is not guaranteed. The best CEOs may fail, and someone not as good may get lucky. Still, there are four personal attributes and mindsets that I believe are crucial for becoming a successful CEO.

1. Integrity and optimism

You will be selling your vision to co-founders, employees, investors and customers. The actual product may end up being very different from the initial concept. Earning and retaining people’s trust through the inevitable transitions is possible only if the CEO’s integrity is self-evident in his/her communications and actions on a continuing basis.

A successful CEO must be optimistic. This does not mean a blind belief that everything will go well or pretending that everything is okay when it may not be. It is more an attitude of “Let’s get on with things, know where we are, and change what is not working.” This requires honest and comprehensive communication at all times and ensuring that it reaches everyone.

The two attributes reinforce each other. An honest presentation of the facts combined with an optimistic, solutions-oriented view helps everyone believe that your leadership will navigate them through good times and bad.

Both optimism and integrity came into play for me as CEO in my second startup, In-Reality Software, where I encountered the most difficult experience in working in startups. A few months into the business, we had just one customer, a company called Crystal Decisions. We signed a contract in September 2003 to set up a team of 40 engineers and hired most of them by December.

In January 2004, Business Objects acquired Crystal Decisions and informed us that the new owner wanted to wind down our team by March 2004. All seemed lost – the revenue, our team’s confidence in us and our own morale.

We could have kept quiet about it, made as much revenue as possible until March, and then let people go. We did the opposite – I told our team what had happened and our plan to deal with it. On one hand, we would seek to aggressively add new customers and, on the other, we would try to extend the relationship with Business Objects beyond March by delivering outstanding quality and services. We achieved both – adding several clients by March. And the team did such a great job that the Business Objects contract continued for another two years.

2. Be a market driver, and not just market driven

In an early-stage company, you are betting on your new product idea or striving to differentiate your services.

In the initial phase, it is your self-belief and self-assessment of a new market opportunity that will drive your product and services. As you discuss the concept with mentors, potential investors and customers, you will hear a lot of opinions. A novel idea often has detractors and people telling you why it won’t work. Don’t be swayed by reputations; evaluate the suggestions on their merit and then decide. Be equally ruthless in changing course if it becomes clear that customers want something different from your offer.

Our product, Sapience, went through several transitions. Sapience intelligently sources individual work time on activities and projects, which is then aggregated into high-level trends as per the organization hierarchy. The end objective is enhanced work output through automated work visibility. This differentiates Sapience from individual monitoring tools. It provides individuals and managers with insights about work patterns that help them guide their work focus and team size.

But it wasn’t always like this.

In 2009, our initial idea had been to collect metrics per user from different engineering tools and provide a composite and integrated view of team and project-level work productivity. We soon realized that this was not scalable because of the large number of tools and their evolving versions and took the hard decision to scrap the product.

Luckily, it struck us that our underlying infrastructure of tracking time on applications and files could be the foundation for an automated enterprise effort solution. We noted that nobody was in that space. The closest equivalents were employee monitoring tools, which were not of interest to enterprises, and which was not our vision either. We realized that differentiating Sapience from employee monitoring tools would become our biggest challenge.

By May 2010 we had a pilot version of Sapience. It included a standard project-management component since we felt that combining task-level management and enterprise-effort tracking would be powerful.

But when pitching Sapience to early prospects, we discovered that people spent more time discussing the task-management module since everyone understood the concept. Our core value proposition of increasing work output was ignored because it was a novel idea and people could not quickly understand its value.

Though we had invested significant time on the task-management component, we discarded it. Instead we opened up our solution for easy integration with existing applications such as project management, HRIS systems and timesheets. We ended up with a solution that is clearly differentiated and easier to position.

3. Empowerment

Initially the CEO and co-founders will be involved in every activity of a startup. As the company scales, the CEO must transition from being omnipresent to getting the right people to do more and more functions and following a “trust but verify” principle.

The new executives must be outstanding and ideally better than the CEO at their function. The team’s collective capabilities must be leveraged to accelerate growth. The CEO continues to help shape the vision and roadmap, be accessible and mentor the executive team to stay aligned and deliver the desired goals.

There may come a time in the company’s life cycle where the CEO must find a replacement. This can be part of a natural succession or stem from a self-recognition that a new leader is required. It is rare to find individuals like Bill Gates and Steve Jobs who are entrepreneurs that are able to steer their startups into the world’s most respected companies. After my previous companies were acquired, I helped find my own successor once we had attained a certain scale.

4. Trust people

I’ll never forget the day I made my first presentation two weeks after joining Burroughs in 1981. At Burroughs, the Optical Memory team operated like a startup. It was led by Ed LaBudde, the most charismatic and goal-oriented VP that I have ever worked for.

Optical disks (called CDs now) were at an experimental stage, offering storage density over a thousand times that of hard disks. This resulted in unacceptably high error rates. Within a month of joining the team, a senior consultant to the company and I had to make presentations on alternate proposals for an error-correction system. The consultant came up with a practical, inexpensive but partial solution. I proposed an innovative approach that would theoretically fix the problem. However, it was risky and more expensive.

Though I was new to the company and without previous experience, Ed picked my solution. I still recall how it boosted my self-confidence and motivated me to give it my best shot. The system was built in one year, worked as promised and led to a U.S. patent in my name.

That meeting taught me several things that I have used later as a CEO. Don’t be limited in your thinking when building a new product. Go for the best solution, even if it carries some risk. Trust people with good potential and strong motivation even if they have limited experience.

Biggest CEO pitfalls from growth to mid-stage

Startup phase

The biggest mistake that first-time entrepreneurs usually make is that they get so carried away by their idea that they forget they need to build a profitable business from it.

Creating a viable company from a concept requires constantly thinking about certain basics: your product’s value, who are the customers, how to make them buy into the concept, what it takes for them to buy the product, and when revenue will exceed the cost.

My advice is to initiate sales and marketing efforts relatively early. Start by testing the concept with a few people. A demo will help you validate whether there is enough interest to sign up for product trials. Once the initial version is ready, verify that a few early adopters are willing to use the product with or without some payment. As you ramp up on sales, keep assessing the sales effort required to the revenue that you are earning from each account and then determine how to improve the ratio.

I have benefited tremendously from the many years of studying and working with U.S. companies and colleagues. I admire many things about the United States such as its meritocracy, trust-based culture, punctuality, professionalism and a systems-oriented approach.

However, my biggest learning was the importance of communication and presentation skills. You may have unique skills as a person or have great functionality in your product; but unless you showcase it effectively, it will not attract the attention it deserves. Coming from a culture where one is expected to be self-effacing, I learned to embrace effective presentation.

For a product, this has many dimensions: the User Interface has to be awesome, the installation must be flawless, the website has to be attractive, presentations and demos need to be compelling and digital marketing tools such as blogs and social networks should be used effectively.

Mid-stage

As a startup grows and becomes a mid-stage company, the CEO needs to change the way s/he leads the company.

Every business undergoes periods of turbulence as it transitions from one stage to the next. In a software product company, this will happen at each of the four life cycle stages: start-up, early, growth and large.

Organizations begin to plateau towards the end of each phase, with existing strategies and behaviors yielding diminishing returns. They must re-invent themselves along three major dimensions (product, sales and finance) to emerge successfully into the next growth trajectory.

Perhaps the most important transformation is in the CEO’s behavior and approach. In early stages, s/he is at the vanguard of all activities. Eventually, s/he must mature into a leader who is capable of motivating the organization to achieve uncommon goals. This requires bringing in people who are as good or better at their assigned function than the CEO and who are empowered but coached in the required core values.

Finally, I believe it is important for CEOs to put their work into proper perspective. Personally, I rely on advice I received early in life from an ancient Indian text (the Bhagvad Gita): “Do your work well for its own sake, without aiming for rewards.” I absorb this by reminding myself to focus on what I have to do, deliver as best as I can, and deal with the outcome – whatever it may be. Thinking about what the result or reward should be only leads to stress.

Shirish Deodhar is CEO and co-founder at InnovizeTech Software, whose product, Sapience, enables companies to achieve significant gains in work output. With 30+ years’ experience in the United States and India, he incubated and led several software companies through rapid growth. He holds a U.S. patent and is the author of “From Entrepreneurs to Leaders: Building Billion Dollar Software Product Companies from India.” InnovizeTech Software has been recognized by Red Herring as a 2011 Asia Top 100 company, and several organizations in India like ET Now, TiE and SEAP for its innovative product.

Kathleen Goolsby is managing editor at SandHill.com

Comments

By V B Rajendra Raja

Integrity is the No 1 hallmark of any business and more so in IT Business, being a people driven and ideation driven business. Hats off to you as have listed it as No 1.

Integrity, followed by outreach to employees, and transparency is what haunts many CEOs. Difficult to make choices, resulting in staff getting to know every news much earlier than it becomes a news.

But one thing I wish to know- how do we take decisions between low hanging fruits/ revenue opportunities which takes care of payroll, overheads, etc (otherwise CFO haunts) Vs aspirational, high hanging opportunities?

By Shirish Deodhar

Raja – No easy answers to your question. You need to build the right product with sufficient functionality first, so you can at least start selling. Thereafter, it is a balancing act between short term imperatives and long term vision, with a major factor being the cash that you have to run the business (money from founders, investors, revenue stream). The right decisions will decide between continuing growth or eventual failure.

  • Pingback: Which co-founder turns startup’s CEO – Tech, Marketing, or Product? « Finding Right Talents

  • Post Your Comment




    Leave another comment.

    In order to post a comment, you must complete the fields indicated above.

    Post Your Comment Close

    Thank you for your comment.

    Thank you for submitting your comment, your opinion is an important part of SandHill.com

    Your comment has been submitted for review and will be posted to this article as soon as it is approved.

    Back to Article

    Topics Related to this Article