While most startup CEOs won’t admit it publicly, they are scared.
They scared they don’t have what it takes.
They are scared they are going to be forced to give up the reigns.
They are scared they are going to mess it all up.
They are scared because they don’t know how to succeed in the role as the CEO.
That’s where Joel Trammell comes in. Joel is an experienced entrepreneur, author, and blogger who has sold his companies for $230M. During our discussion, Joel shares a methodology you can use to succeed as a CEO.
Have comments, questions, ideas, or feedback? I want to hear it. Tweet me at william_griggs.
Topics Covered In This Episode
The 5 responsibilities of a CEO
- Own the Vision
- Planning vs. Action vs. Results
- Leadership vs. Cheerleading
- Flexibility vs. Focus
- Provide the Proper Resources
- Budgeting vs. Opportunistic Investment
- Growth vs. Profitability
- Recruiting vs. Hiring
- Talent vs. Experience/Knowledge
- Saving vs. Trading Up
- Build the Culture
- Make Decisions
- Deciding vs. Building Consensus
- Employees vs. Customers vs. Shareholders
- Department vs. Department
- Deliver Performance
William Griggs: All right, Joel, thanks for joining us today.
Joel Trammell: Great to be with you, William.
William Griggs: Yeah, really appreciate your time. We’ve got a lot of first-time CEOs listening to the podcast, and while many of them won’t admit it publicly, they’re scared. You know how I know they’re scared? They send me emails. They’re telling me they’re scared. They’re scared that they don’t have what it takes to be successful. They’re scared that they don’t – they’re scared that they’re gonna – I’m gonna edit this part out. They’re scared they’re going to be forced to give up the reigns of their company, and they’re scared that they’re gonna mess it all up.
And so the goal of this interview is pretty simple, and it’s to give them some structure, a way of thinking about the CEO role that they can embrace and take back into their organization so all those bad things don’t happen to them and they can become a more effective CEO. Before we dig in, can you kinda give the audience a 30-second overview of your background, including what you’ve been able to accomplish and what you’re currently working on?
Joel Trammell: Sure. So, I started my first business when I was in the United States Navy at age 25. And once you start your own business, you become kinda unhireable so you better figure out a way to make it work. So, I spent the last 25 years starting businesses, and then a couple of cases of very successfully growing and selling those businesses such that I’m now able to do a whole host of things including working on helping CEOs be better at the job.
William Griggs: That’s awesome. Yeah, so you have a book out. You wanna talk a little bit about that?
Joel Trammell: Yeah, I wrote the CEO Tightrope to help CEOs, many of which are first-time CEOs understand that the job is very different than they may have expected when they step into the job. Often, they have functional expertise. They’ve been a sales manager, sales director, sales VP or a CFO or whatever, and they come at it from a very functional expertise, but they don’t understand the breadth of the CEO role and all the things that are necessary, so I tried to put together a methodology that I thought would help CEOs think about the job, how they should approach the job, what are key responsibilities that they have to focus on.
William Griggs: Gotcha. That’s a great overview, and we’ll definitely link to that in the show notes, and we’ll be using that kind of as a framework to dig into the conversation, but one of the things that I like to do in this kind of introduction period for a lot of our guests so they keep listening is help them quantify the amount of success or the level of success the guest has had. And most guests come on there. They’re very modest just like you are. I know you’ve had nine figures and exits. Is that correct?
Joel Trammell: Yeah, we built two businesses from zero to nine-figure exits by Fortune 500 companies.
William Griggs: Definitely something we wanna drive home so they continue to listen. They know you’re the right person to talk to. But I think that’s a great overview for them. So, let’s dig in. What do you say?
Joel Trammell: Sounds great.
William Griggs: All right, so in your book, you talk about the five responsibilities of a CEO. Can you kinda lay those out for us before we dig into a couple?
Joel Trammell: Sure. So, these are the key things that I think every CEO has to take personal responsibility for. And the first, own the vision, the idea that the CEO has to own the strategy and direction of the company. Second, provide the proper resources. The CEO is the one ultimately responsible for making sure there’s enough capital and the proper human resources to be successful in the business. The third thing the CEO is responsible for the culture. He’s responsible for building the culture. He’s like mom and dad together in a family, and he sets the tone for the organization. And only the CEO can provide that role.
And then the fourth thing the CEO has to do is make decisions. It’s a tough role if the CEO is not very decisive. Decisions are kind of the oil that lubricates the engine of a company, and therefore it’s critical that the CEO make rapid decisions and let the company move forward. And then finally, if you can put those four things in place first, then it allows you to do the fifth thing, which may be the most critical, which is deliver performance. At the end of the day, every CEO is judged by his or her performance in the job. The shareholders increase their value. Are the employees happy and are the customers happy? And so, that’s the ultimate responsibility of the CEO.
William Griggs: Gotcha. So, we’ve dug into those five. Instead of kind of going through a brief overview of all five in this interview, let’s dig into maybe two or three of them, dig a little bit deeper, and if they wanna go into the others, they can go grab the e-book. How’s that sound?
Joel Trammell: Sounds good.
William Griggs: All right, so let’s start by digging into the piece you call owning the vision. What do you mean by owning the vision? How do you see CEOs doing it right or wrong?
Joel Trammell: Yeah, I’m very specific. I like the word own there. A CEO doesn’t necessarily have to create the strategic vision for the company. Often in tech companies, there’s a technology executive that’s kinda set the direction technically for the company, but the CEO ultimately has to decide what is the goal we’re chasing. What is success? Often when I work with executive teams, the first question I ask them is everybody take out a sheet of paper, write down what is success for this organization. And it’s amazing how many times with ten executives in the room; I might get ten different answers to that question, what is success.
And so it’s really the CEOs role to set the definition of success and set a plan in place that’s realistic as to how that success is going to be achieved.
William Griggs: And as far as setting or owning the vision and defining success, is that defining it in terms of a market cap or is that defining in terms of an impact on a customer? How do you like to help people kinda define that piece?
Joel Trammell: Yeah, that’s a good question. Every company is different in terms of culture and what they think is success. For some companies, it will be a very customer-centric idea of making our customers successful. For some companies, it could be a very financial-centric goal, reaching a particular market cap or IPO or exit type event. For other companies, it can be very employee-centric. Some people are just trying to build business where the employees have great jobs and can be successful in their careers. So that’s very dependent on the CEO, what the CEO is trying to obtain. That’s what it’s very important that the CEO is clear on that.
Otherwise, it’s very easy to have multiple different visions competing in a company.
William Griggs: Gotcha. So, the CEO that’s listening to this, they’re thinking about it. They’re sitting down. They’re making sure their executive team gets on the same page. Is that the first step as far as trying to – the second step, rather, getting the executive on the same page?
Joel Trammell: Yeah, first you gotta decide where you’re going. Then you’ve got to kinda educate and visit with the executive team and make sure everyone on that team is on board so that then you can push it throughout the organization. And whether you’re a ten-person organization or a ten thousand-person organization, communicating that vision takes time and effort. Some CEOs think, oh I’ll just go give a speech, and everybody will get it, and everybody will understand the vision and know what to go do. It’s much more than that.
You have to constantly reinforce what the vision is, what the plan is, how you’re gonna get there, and make sure that everyone in your organization can apply that to their job and how it fits into the organization.
William Griggs: And working with these companies, how do you typically suggest that they continue to reinforce that?
Joel Trammell: It’s something that has to happen regularly. I like quarterly meetings where the CEO is in front of everybody, either physically, in-person, or if that needs to be remote, through a video or whatever, depending on the size of the organization. But constantly starting out each quarterly session with here’s where we’re going. Here’s the progress we’ve made toward that vision, and here’s where we expect to be at the end of the quarter I think are critical steps every CEO should be doing.
William Griggs: Gotcha. So, you have quarterly. It seems like you can also have the manager team driving it home in maybe their weekly meetings, what those people and they’re doing in their function tie back to the overarching goal.
Joel Trammell: Absolutely. That gets into every performance for the organization. You know, it’s just like a football coach. The football coach doesn’t tell everybody go win, because the right guard would look at him and go, coach I block people. I don’t know how to win. And so, it’s very important that the management team, the role of management is kinda to translate the winning down to individual messages that apply to every employee.
William Griggs: Gotcha. In the own the vision chapter, you also talk about the difference between planning, action, and results. Can you dig into that a little bit?
Joel Trammell: Yeah, so there are some people who like to plan extensively. The problem with planning extensively in business is, almost as soon as the ink is dry on the paper, things have changed, and you’re not able to stay with the exact plan. So, I take a lot of value from a book that was written by a guy named Stephen Bungay who wrote the book called The Art of Action, talks about military planning, how you have to expect that things are gonna go differently than your plan. And so while planning is important, it’s very important to have a flexible plan and a continuous plan in process and not think of planning as something we do once a year but think of something we continually adjust as new facts come in.
William Griggs: Is that as simple as having monthly meetings with the executive team or weekly meetings to reassess the market and the competition?
Joel Trammell: Yes. And I’m a big fan of having a 12-month forward looking forecast as opposed to this annual budget process that many companies do and so that every time you finish – for instance, we just completed Q1 of this year. You would plan Q1 of next year while everything is fresh in your mind as to what changed. So, you’re always trying to look 12 months ahead and constantly refining it based on new information.
William Griggs: Gotcha. Any other tips or advice, making that balance between planning, action, and results?
Joel Trammell: Yeah, you have to be very careful as the CEO not to be too much of a cheerleader. I’ve seen a lot of CEOs who go out and tell everybody how we’re gonna take over the world. We’re gonna be the best. We’re gonna be number one. And you have to be careful that your goals are realistic, that your vision is realistic, because people, after a while, if you keep telling them great things are gonna happen and they don’t see those things happening, you’ll lose credibility with the troops, and it’ll be difficult to provide leadership if you lose credibility. So, there’s a fine line that CEOs have to walk between being optimistic about the future and being overly optimistic, which I call the failure of being a cheerleader CEO.
William Griggs: Yeah, as far as avoiding being a cheerleader, how should they think about tempering that? Is it thinking about the vision and not going too far out into the future? Is it really just holding your cards close to your chest?
Joel Trammell: Well, it’s about being realistic. So, when you put together plans, you know, you should be checking with your executive team. Hey, is this a realistic opportunity? One of my favorite questions for new startup CEOs is how long did it take Microsoft to get to 50 million in revenue? And the answer surprises most people. It took eight years. And Microsoft was one of the most incredibly successful companies right out of the gate. And so, you have to set plans that are realistic. You put in place a plan that says we’re gonna do $200 million in year eight. You know, maybe, but that’s probably highly unlikely that you’re gonna be more successful than Microsoft was.
So, you have to do realistic tests with your executive team, your advisors, your board and stuff to make sure that your enthusiasm for the business, which you should have, doesn’t become over enthusiasm and lose credibility.
William Griggs: No, it makes a lot of sense, because it seems like you can market test it. Use an example of Microsoft like you did, and you could also test it with inside the culture. You can think that we can get to this much revenue, but to get to this much revenue, we need this much product, and you can validate, can we actually even build that much product by that time and most likely the answer is gonna be no. It seems like most CEOs I’ve met with, they’re super eager, super excited about the future, and like you said, they try to own this vision, but sometimes it becomes –
It borders on unrealistic, and I definitely have seen in the past with certain clients and companies that de-motivating factor for sure.
Joel Trammell: Yeah, once the CEO loses credibility with the troops, it’s really hard to provide leadership necessary for the organization.
William Griggs: Gotcha. And then the third piece that you talk about on this chapter specifically is the flexibility versus focus. Do you wanna unpack that a little bit more?
Joel Trammell: So, there’s a great quote from one of the generals that Bungay talks about, that no battle plan survives first contact with the enemy. And I remember dealing with Blackberry, the company we did business with when they were blowing and going, and they had this idea that they were just gonna take over the world. And it was almost a religious conviction among the employees, and it caused them to – when Apple released their first iphone, the CEOs famously made comments negative about why anybody would want such a device. And so it really caused them – because they were so focused on their vision, they didn’t have any flexibility.
They had built it into the culture. There was no one in the organization who stood up and said hey wait a minute guys. We need to pay attention to this. And so while they had a tremendous run of success, they also were one of the fastest failures in business history.
William Griggs: Gotcha. And so that example specifically is about staying heads down on that vision and not popping the head up and looking at what the market is doing. Is that right?
Joel Trammell: That’s right. You have to always consider that you could be wrong while you’re running forward as fast as you can. And so you wanna be constantly looking for any data that might show hey, we didn’t quite get this right.
William Griggs: And is there any systematic approach or any type of methodology or approach that you suggest CEOs kind of work on or use to kind of avoid this?
Joel Trammell: Yeah, they have to remain – it’s very easy when you get in the public company markets to be very financially focused. And the challenge with financial focus is that’s historical data. A lot of times, the numbers don’t turn until after the problem has already occurred. So, it required CEOs getting out and being very customer focused and aware of what’s going on in the market, so that they can pick up these trends before they are affected in the numbers.
William Griggs: Gotcha, so early on, it sounds like it stays throughout the growth cycle of a startup, but it sounds like even early on, CEOs gotta be out there. I know we interviewed Rick Ore who works at Real Savvy and used to do [inaudible] [00:15:56] out here in Austin. And he was talking about how every Wednesday, he meets with at least three of his target prospects, and that’s one of the ways he likes to specifically stay in tune with what the market is saying and what he’s trying to build.
Joel Trammell: Absolutely. That’s where you’re gonna first hear any warning signs.
William Griggs: Very cool. So, let’s jump over to the next section which you talk about – you mentioned briefly earlier, which is providing the proper resources. What do you mean by that? How do people get it wrong? And how can our audience get it right?
Joel Trammell: The key resources, and there are a lot of difference resources that the CEO can provide to the organization, but the two key ones typically are capital and people. And I’m a big proponent of if you do nothing else well, if you get the right people, you can solve a lot of problems. And too many CEOs don’t spend time becoming experts at recruiting top performers. Matter of fact, I’ll have a quote from Richard Fairbank whose the CEO at Capital One. He said at most companies; people spend 2 percent of their time recruiting and 75 percent of their time managing their recruiting mistakes. And so that’s something I often see in busy startups.
The CEO is too busy with everything he’s doing to worry about necessarily getting the right people in place, and they tend to hire the first person who looks qualified and end up with a bunch of mediocre performers. And so I’m a big on that believes the CEOs should be intimately involved in setting up a continuous recruiting process and setting the bar for the employees that you want in your organization.
William Griggs: Gotcha. Makes a lot of sense. So, if they’re focused on recruiting the right people like you’re saying, getting them in the job. Sounds like a lot of their problems eventually go away in the end.
Joel Trammell: That’s exactly right. I once did 252 interviews in one year to hire 100 people. And some people said wow, how did you have the time, and I thought to myself, how could you not have the time? That was the most important thing I could possibly do to leverage my time.
William Griggs: What kind of things can the people in the audience do to kind of improve their ability to recruit and improve their ability to vet some of these people?
Joel Trammell: One of the things you have to think about is why would an A performer come work for your company. You know, it depends on your situation. Obviously, if you’re Google in the early days, everybody wants to go to the hot startup. And most CEOs aren’t gonna have the luxury of being the hot startup in the town. So, you have to figure out what are the unique things you offer. In some cases, it could be unique technology that people wanna work on. Or it could be a unique work environment. You have to figure out some way that you’re gonna be able to appeal to top performers. And so then you’re gonna have to build that into your culture and build that into your recruiting process, how you look at people.
William Griggs: And then at what point in the candidate’s process do you recommend CEOs get involved? Should they be the first interview? Should they be the final say? What are your thoughts on that?
Joel Trammell: Generally, what I’ve done is make them part of the interview process and part of the final say. That requires having a recruiter, first of all, who’s a very top-notch person as well. Sometimes, the CEOs leave the recruiting function to somebody whose very junior, very inexperienced and not terribly sophisticated, and you have to realize the candidate is gonna spend more time talking to that recruiter than anybody else probably in your organization. And so you wanna make sure they’re a top-notch person. And if they are, then the CEO can come in, in the interview process and kinda, like I say, set the bar, and make sure that the candidates is of the proper level that they will be a fit in the organization.
William Griggs: Gotcha. That makes a lot of sense. That’s something I have not thought about but it definitely makes sense now that you say it about that recruiter being the person you will spend the most time with during the process as a candidate. That’s really interesting. That’s a good point to drive home for the audience as they’re thinking about either jobs they’re taking or if they’re starting to hire themselves. Very cool. So as we dig into provide the proper resource, we talked a little bit about the people. Can we talk a little bit more about the budgeting? You talked a little bit in the book about budgeting versus opportunistic investment. Can you dig in a little bit there?
Joel Trammell: It’s very easy to get caught up as you get to be a bigger company in setting a budget and getting a management focus that’s very driven around making the budget and just focusing on the budget. And I’ve seen many companies pass up tremendous opportunities, because it wasn’t built into the budget, whether that, in some cases might be to hire the Michael Jordan type talent that comes across their desk, I’ve seen just superstar people be passed or not even interviewed because there wasn’t a position available, for instance, in an organization.
I’ve seen companies pass on acquisitions that they could’ve done that would’ve been hugely accreted to their business, but nobody planned it. It wasn’t in the budget. Nobody was looking for it. And so while doing a planning process is important, you want your managers to think in business terms. You want them to think in a dollar invested gets two dollars back. And if I find a better use for that dollar than I originally planned, I want my managers to switch and take advantage of that better use of their dollar.
William Griggs: That’s a good way of thinking about it. I definitely haven’t thought about it that way, but it’s a good point to drive home. Again, it’s like you’re through the budgeting process. You’re determining the different functions and what their budgets are and to come at that number, people are typically trying to extrapolate out what their expenses are based on what they are currently, not necessarily taking into account any new opportunities that are above or around the corner. That’s interesting.
Joel Trammell: Yeah, I always want my managers thinking what would they do if I gave them less money? What would they do if I gave them more money? So, to get them thinking in terms of this, you know, dollars spend, does that return two dollars in return.
William Griggs: Yeah, I can definitely see you driving that home at the quarterly off-sites or even the weekly meetings to get the executive team trying to think a little bit outside their normal thought pattern. That makes a lot of sense, and as far as the next piece that you talk about. We talked a little bit about the recruiting piece. How does that differentiate from hiring?
Joel Trammell: So, many companies wait until they have an opening. Often somebody has quit or somebody has been fired, and then they kinda scramble to put together a job description and scramble to call people, hey do you know anybody that might fill this job. And it’s a very haphazard pattern. The problem is the best people rarely have to look for a job. So, if you just put out an advertisement online or something, most of the people that are gonna apply for that advertisement are the C-players, not the A-players, because the A-players already have jobs. And if an A-player needs another job, what does he do?
He calls somebody he knows who’s worked with him who knows he’s an A-player, and they hire him pretty quickly. And so, if you wanna have a shot at the top players, you have to be in a continuous recruiting process, and you have to look for what I call disruptive events. You know, often when a company is acquired, that’s a perfect time to reach out to the A-players at the company that was acquired, because often over time, they’ll become pretty unhappy with the new situation. Sometimes, people shut down offices or companies go bankrupt. That’s an opportunity to jump in and take advantage.
I remember in Austin years ago, Google closed down their office for a time in Austin. We immediately went and stuck flyers on Google’s door that said hey, need a job? NetQoS is hiring. And so you gotta look for ways constantly to find the top people because the top people don’t need jobs. They can find jobs. And so you’re gonna have to continuously work your sources and develop relationships with people so when those top performers are ready to move, they call you first.
William Griggs: And are you thinking through in advance? Are you trying to think through what is our next quarter look like, what does our next month look like, what are the immediate needs in the midterm to future, long term needs look like? And then how are you filling that pipeline? Is that how you’re thinking about it as an executive?
Joel Trammell: I think about it a little differently actually. I try to find the best people I can and then arrange the organization to take advantage of their talents. Because it’s a lot harder to find a top performer than it is to kinda arrange the organization. And so I think that too many people look at a job and they draw a very narrow bracket and say we need somebody who knows these specific things and is gonna do this specific job. Well, once you narrow it down that closely, it’s gonna be very hard to find that individual.
And so, if you’re more broadly looking for top performers and then figuring out how to fit them into the organization, sometimes that means moving some pieces around, but I found that to be much more successful, much better chance of getting top performers in your organization.
William Griggs: Yeah, let’s take it to one more piece, and that’s about talent versus experience and knowledge.
Joel Trammell: You know, this is one of my favorite topics. I was just having a conversation with a former employee of mine who’s the lead public company today at lunch, and he was echoing the same comment. Teams tend to want to hire people with experience because they believe that it will take a lot less time for them to come up to speed. The problem is, there’s kind of a fundamental mistake. When they hire people with experience, they think they’re getting their experience when in reality; they’re getting the new employee’s experience, which is different.
And the other thing, when you hire somebody with experience, they expect to use their experience. They expect to come in and do thing the way they’ve been taught or the way they’ve been trained or the way they’ve developed to do things. They don’t wanna come into a situation and then have you tell them, oh no, we don’t do it that way here. So, when you need experience is when you as an organization are hiring someone to do something the organization doesn’t know how to do. So, if I’m starting a new business line or something, and I don’t have anybody in the organization that comes out of that market, then it makes sense to hire experience.
But in general, when you’re hiring, you already know how to do what it is. You just need more of it. And so, there, the primary consideration should be talent. And you should expect to have to train every employee on how you do business, because how you do business is gonna be unique. And if you’re a good company, it’s gonna be very unique compared to what they’ve experienced in the past. And so you really wanna make sure that you’re hiring the talented people and then providing training for them, so that they can be successful. I think way too many times, people hire experience thinking it will be easier, and it actually is more costly and harder to retrain somebody than to train somebody in the first place.
William Griggs: Yeah, so we’ve talked about the budget side of things. We talked about the talent side of things. Is there anything else underneath kinda providing the proper resources that we wanna dig into before we hop over to making decisions?
Joel Trammell: Yeah, so the one other thing that CEOs can provide to the organization and kinda has to provide is kinda outside expertise. So, the CEO is the one who can invite advisors, mentors, board members, and to help the company in areas where they need expertise. And so that’s a role that I think CEOs often get too heads down and don’t look for other people in the community who can provide expertise who have maybe already been down the same road and can provide that kind of advantage to a company.
William Griggs: Yeah, that’s interesting. We had a guy named Bill Bayble on not too long ago talking about how to leverage mentors and advisors for startups. And then recently had Brett Hurt on from Bizarre Voice days, and he was talking about how at Bizarre Voice, when he was trying to grow the company, they had advisors for all sorts of stuff. They had advisors to open up different industries, different markets. They had advisors to advise specific functions. Sounds like advisor is definitely a resource that we needed to touch on before he moved on.
Joel Trammell: Absolutely.
William Griggs: Very cool. So, let’s dig into making decisions. This is the third piece, a final piece that we’ll dig into in this interview about improving the effectiveness of the CEOs in the audience. So, what do you mean by make decisions. How do CEOs typically mess this up?
Joel Trammell: Well, first of all, to make decisions are the fuel on which the company runs. And so, the first mistake I often see CEOs make is waiting too long to make a decision or never even really making a decision. Because you have to realize when a decision gets brought to the CEO’s desk, all the organization kinda stops and pauses, waiting to find out what the answer is gonna be. And so, CEOs have to learn what Colin Powell talked about, which was you have to make decisions when you have between about 40 and 70 percent of the available possible information. And some people just aren’t comfortable.
They want to analyze and analyze, but I think it’s very important that you make decisions rapidly. With that, though, you have to also then be willing to change your decision should future facts indicate that you’ve gone in the wrong direction. So, that’s kinda the first thing is you have to be willing to make a decision. And you have to be willing to consider the fact and kinda plan for the fact that you could be wrong and so if information changes down the road, you’ll go back and revisit the decision.
William Griggs: And as far as when you’re working with these different CEO’s, what are decisions that you suggest that they make versus decisions you suggest they delegate to their team?
Joel Trammell: You have to train your team. Generally, people who have been taught – I find most executives have been taught; oh, we don’t wanna bring things to the CEO. He’s busy. We don’t wanna bother him. And I’m exactly the opposite. I tell my executive team very clearly that if you have an issue that goes across multiple departments such that multiple VPs are involved, then I’m, as CEO, the only one who can kinda referee and make that decision. And I want you to escalate those issues as soon as possible.
If you go and visit with another VP and you guys have a disagreement as to what direction we should go, instead of trying to work it out over days, weeks, months, or kinda having what sometimes happens, which is kinda this truce that occurs where nobody really does anything, because they don’t wanna upset the other person, I train my team to immediately escalate those kinda issues. Now, if the issue is something totally in your control, if you’re the Sales VP, and it’s a question of how we’re gonna treat this customer in the sales process, then I expect you to make the decision, and if you want my advice, I’m happy to give it, but I expect you to make the ultimate decision on that.
William Griggs: Gotcha. That’s a good rule of thumb, trying to think through cross-functional decisions versus functional decisions and whether to bring the CEO into play. And like you said, how to train up your team so that you can get the best end result and you can be in the decisions you need to be in and out of the decisions where you don’t necessarily need to have your input.
Joel Trammell: I can go into a company and just listen and sit through a meeting or two and see how decisions are made and tell you kinda how well run the company is. You can get a sense very quickly as to how well run the company is by how well they make decisions.
William Griggs: And as far as making decisions, you talk a little bit in the book about deciding versus building consensus. Can you dig into that so for a second?
Joel Trammell: You know, all of us would love to have everybody agree with every decision we make, but having been a CEO for 25 years, that just doesn’t happen all the time. And so, it’s very important that you don’t delay the decision waiting to build consensus, waiting for everybody to come around to your view, because it’s probably not going to happen. And so, it’s important for the CEO to make a decision but then explain why they made the decision as well. This is the problem. The problem is not that you didn’t build consensus often when a decision isn’t well received.
It’s the CEO makes the decision and doesn’t explain to the people who would’ve gone a different direction why they made the decision. So, I think that’s very important. If you explain to people not only what the decision is but why you went in that direction, why they – they may be right, but you’re going in a different direction and here’s why, that does a lot to help people feel better about the decision made.
William Griggs: So, people need to make more decisions, make the decisions quickly. Don’t worry about necessarily building a consensus but like you said, make sure to communicate and explain your logical thought process for why you made this decisions in this certain way.
Joel Trammell: And that you’ve considered their objections in your decision process.
William Griggs: Gotcha. So, we need to make sure that they feel heard and that their opinion was valued.
Joel Trammell: Absolutely.
William Griggs: And then as far as thinking through, you know, as a company you have employees. You have customers. You have shareholders. How do you make decisions when you have three different individuals or three different groups or three different parties that you have to be responsible for?
Joel Trammell: You can often say it’s almost inevitable. Companies first when they’re started, they’re very employee centric, because they don’t have customers, and if they have shareholders, they just gave them their money, and they’re not asking for a return yet. And then as the company matures and you start getting customers, then typically companies shift to being very customer centric. The customer is always right. You hear these kind of statements made. And then, you know, if the company gets to be big enough and maybe goes public or whatever, then you get very shareholder focused.
And so I’m a big believer in, that as CEO and even as the executive team, you gotta constantly check every decision, every major decision you make and kinda put on your employee hat, put on your customer hat, and put on your shareholder hat and make sure each of those three constituents in being considered when making the decision. It’s very easy to make decisions if you’re just employee focused or just customer focused or just shareholder focused. But it’s also very short-sided to make decisions in any one of those three buckets. You have to keep all of those happy to have a successful business.
William Griggs: And as far as making those decisions where maybe one group loses a little bit and one group wins a little bit, how do you kinda balance that?
Joel Trammell: That’s why the CEO gets the big bucks, right? He has to constantly balance those three, and sometimes they are, at least over the short-term, competing interests. You know, obviously employees would like to make more money, but if you gave everybody a 20 percent raise, then shareholders may suffer, so you know, that’s the heart of being the CEO is trying to balance those in a reasonable way.
William Griggs: All right, so before we start to wrap up and talk about some resources that you suggest, is there anything else you need to dig into around the making decisions section?
Joel Trammell: Just that, you know, that is a key role of the CEO, and that’s one that he can’t give away to somebody else. You can’t have somebody else making all the decisions for you.
William Griggs: Gotcha. So, let’s give our listeners maybe a few additional resources, what they can dig into to help them continue to improve as a CEO. Are there any books or thought processes that you typically suggest to some of your CEO clients that maybe our audience can dig into on their own?
Joel Trammell: Yeah, absolutely. So, I wrote my book to provide methodology. There are several other books out there that provide good complementary material. And I’m a big fan of The Hard Thing About Hard Things by Ben Horowitz. It talks about kinda the emotional side of being a CEO. People don’t understand often the difficulty of having all the responsibility piled on your shoulders, and he does a great job in that book of talking about kinda the emotional challenge of doing that.
William Griggs: Are there any other resources that you’d like to suggest?
Joel Trammell: Yeah, so there’s certainly a lot of blogs I follow that talk about leadership and various things. One of the things as CEO, you can never learn too much. And so I’m a big fan of CEOs being on a continuous learning process, seeking out other CEOs, going to events where these kind of topics are discussed, because I don’t think you can ever learn too much as CEO.
William Griggs: Very good. I’ll put the link to Ben Horowitz’s blog and his book as well as your blog and your book in the show notes for people to take a look at. If people wanna learn more about you and your book, how can they do that?
Joel Trammell: You can go to theamericanceo.com and follow my blog and book.
William Griggs: Very good. Again, I’ll put those in the show notes below the interview for all the people listening. They can go to the startupslingshot.com to check those out. Joel, thanks for joining us today.
Joel Trammell: Thanks, William.
Joel Trammell’s Bio
Joel Trammell is a successful CEO and entrepreneur with a 20-year career in IT-related software companies. He is currently CEO of Khorus, which provides a business management system for CEOs and other executives. Joel is also Chair Emeritus of the Austin Technology Council and Co-founder and Managing Partner of private equity firm Lone Rock Technology Group. In addition, he serves on the boards of several public, private and nonprofit companies.
Joel’s leadership as a CEO has resulted in successful nine-figure acquisitions by two Fortune 500 companies. As CEO of network management software firm NetQoS, he delivered 31 consecutive quarters of double-digit revenue growth and nearly $60 million in revenue. CA Technologies acquired the company in 2009, generating more than 10x return on capital to its private equity investors. In 2010, he co-founded Cache IQ, a storage software company that NetApp acquired two years later.
Joel is committed to using his experience to help current and aspiring CEOs. He provides advice for them on his blog at theamericanceo.com. He also has regular columns at Forbes.com (http://www.forbes.com/sites/joeltrammell/) and Entrepreneur.com (www.entrepreneur.com/author/joel-trammell). In addition, he runs a CEO seminar in Austin every year in conjunction with the Rice Alliance and the Austin Technology Council.
Joel is also publishing a book this fall titled The CEO Tightrope. The premise of the book is that no CEO can find a point of balance and then stand still—that’s not even possible on a tightrope. The expectation is that the business must always move forward. Drawn from Joel’s years of study and experience, the book explores the various points of balance that challenge every CEO. He identifies what it looks like when a CEO is off balance and offers modern techniques and approaches to regain it.
Joel holds a bachelor’s degree in electrical engineering from Louisiana Tech University and is a former instructor at the Naval Nuclear Power School.
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