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CEOs

Why Every CEO Needs an Outside Perspective — and How to Get One

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As chief executive, it’s easy to exert authority and make decisions. It can be much harder to pause, take a step back, and ask someone else to judge all the decisions you’ve been making over the past few months or even years.

When it comes to running a business, tunnel vision is unavoidable. You’re too close, you’re too emotionally invested, you’re too stubborn, you can’t afford to fail.

Every so often — whether things are going unbelievably well or spiraling out of control — you need an outside perspective.

Here are a few ways to get one.

1. A board of directors

The President has his Cabinet; you have your board of directors.

You may not be running the nation, or even a Fortune 500 company. But that doesn’t mean you can’t benefit from a board’s expertise.

Board members can help you see the forest through the trees — evaluating what’s worth worrying over and what doesn’t deserve your attention. They can also help the company expand its areas of expertise, proactively evaluate and mitigate risks, and increase credibility.

Don’t fly blind. If you’re thinking about growth capital or an exit in 2016, a board of directors can help navigate important decisions along the way.

For more, read our article on Why Every Mid-Market Company Needs a Board of Directors.

2. An M&A advisor

If you’re planning to sell your company at some point, engage an M&A advisor sooner rather than later. It takes time to find an advisor you trust and build a relationship. A good advisor will evaluate your company and recommend strategic efforts to improve your valuation before you sell. In some cases, these efforts could take several years to implement successfully — so don’t wait until the month before you close on that private island in the Caribbean to give an advisor a call.

But even if you’re not sure about your exit plans, an M&A advisor can provide helpful insight. Curious about how favorable the market is? Want to know what types of buyers might be interested? Does your company have red flags that buyers will immediately recognize and that you’re not aware of? What’s the market outlook for your industry? A 45-minute lunch with an M&A advisor could yield answers to one or all of these questions — and impact your business plan and roadmap in the short and long-term. (Plus, you’ll get a free lunch.)

When you are ready to sell, you’ll be happy to have that advisor by your side. A 2015 study also found that “private sellers receive significantly higher acquisition premiums when they retain M&A advisors” (more on that here). That private island just got a little bigger…

3. Your own ranks

So it’s not exactly an “outside” point of view — but your employees will have worthwhile feedback that you’d be loathe to ignore. Pick their brains for their take on your business model, leadership style, company organization, senior management, marketing strategy, and more.  More junior employees are more likely to hear honest reviews of your products or service offerings from customers than you are as CEO. Your sales and marketing team will have a more fully developed understanding of the market and your competition than anyone else out there. Your UX team has spent countless hours doing user testing — stop them in the hallway to make sure important points haven’t gotten lost in dense PowerPoint presentations. Solicit anonymous feedback on a regular company-wide basis. Provide an opportunity for informal town halls with Q&A between employees and leadership.

Transparency and communication aren’t always easy, and you may inadvertently set the stage for a few public conflicts down the line. But the information you gather will help you better gauge employee satisfaction, understand the market, and evaluate others’ perception of your business.

4. Networking organizations for CEOs

Joining an executive group like Vistage can provide you with mentorship and a safe space to talk through your business’s challenges. Regular meetings give you the opportunity to talk through any business or leadership concerns with other current and former CEOs who understand the loneliness of being at the top.

Even if you don’t join a formal organization, take the time to network with other business leaders. Reach out to other CEOs you admire or make an effort to engage interesting contacts at conferences. Even if you find just one mentor or peer advisor, the advice that person provides might mean the difference between a rash business decision and a wise one.

Want to increase your business’s chances of success in 2016? Our 2016 CEO Resolutions series details a few worthwhile goals to focus on to strengthen and grow your company. See all posts here

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