“In your thirties it’s not about pushing to become CEO, it’s about preparing to be a great CEO”. Steve Tappin, CEO Xinfu
At 33, I became CEO of a high-potential start-up with venture capital backing. The pressure of having to keep private investors happy during the Internet bubble collapse with virtually no experience was one of the hardest things I have done. Saying that, I managed to make the business profitable within just 11 months, during the internet downturn, but it cost me several years of my life. As hard as that period was, I learnt invaluable leadership lessons that have stuck with me ever since. I wouldn’t recommend that everyone aim to become a CEO in their 30s, but from my experience, I wouldrecommend concentrating on building the right foundations to becoming (my colleague’s words, not mine!) a great CEO later on.
In my opinion, becoming a great CEO is all about building a war chest of personal and business leadership and fellowship experiences that will both challenge and underpin your leadership.
Here are some tips based on personal experiences and interviews with top CEOs (more are included in The Secrets of CEOs) on how to best prepare to be a CEO when you’re in your thirties.
1. Understand value creation
To understand value creation, you need to make sure you understand how to run public listed companies for investors and how private equity investors work. Have an investor’s mindset on building value. Working in private equity for instance will help you to get a grasp of the impact of value creation in your leadership, be that in business structuring, creative deals or preparing for exit.
Take Ahmed Fahour’s career as an example: Having made partner at BCG (Boston Consulting Group), he co-founded a private equity firm, iFormation, backed by Goldman Sachs and General Atlantic Partners. A few years later, he was headhunted to run corporate development for Citigroup before being made CEO of Global Alternative Investments in his 30s. He then joined National Australia Bank to help John Stewart with its turnaround. The start at BCG and a mix of private equity and large corporate experiences have rounded Ahmed out and helped in his fast progression to now running the national icon Australia Post.
2. Work for a company in a hyper-growth phase
It’s good to work for a company in a hyper-growth phase, like Facebook, Tencent, Google a few years ago, or ASOS or Snapchat at the moment. In a hyper-growth company, you have to make decisions without complete information. You’ll get an idea of how to drive super-growth where you’ll be forced to rely on your intuition to make decisions at pace and taking responsibility for a global footprint, acquisitions, mass hiring, partnerships, new ventures and key game-changing projects. However, in doing so you’ve got to make sure you don’t make fundamental bad decisions and end up betting the company!
“As most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly”. Mark Zuckerberg, CEO and cofounder Facebook
“If you’re doing things right, something will always be a little bit broken. Most importantly, tell everybody that a little bit of chaos is okay”. Aditya Agarwal, VP engineering Dropbox
“Go or grow. If any part of the business is less than 10% of the value, it has got to go unless I can see it growing. I am always looking to see if I can double our value every three years”. Sir Bill Gammell, former CEO Cairn Energy
3. Gain global leadership experiences
Nowadays every business is touched in some ways by globalization, so it’s important to have experience in both developing and developed countries. Many global businesses actually organize themselves along those lines, such as Reckitt-Benckiser.
Perhaps the best and most challenging experiences are in China. China is set be the biggest market in the world and is probably the most difficult for leaders from the outside to master, due to cultural, governmental and language barriers. If you can adapt to China, then you can probably work anywhere. Live in a country, “smell the air”, – it will help you to really understand the history, culture and the people, even though the air in Tier 1 cities doesn’t smell that great!
China’s growth will be “enviable to most other major economies for another 15 to 20 years.” Jack Ma, CEO Alibaba
“Some say the actual [growth] number could be just 5%. But even with 5% growth, there is no other economy of such size growing at that speed in today’s world.” Jack Ma
Equally, if you’re based in China, come to Europe! European businesses are undergoing a period of unprecedented change (Brexit vote a key factor), and their growth rates are slower than that of China. Companies will be forced to innovate to succeed, so it’s an exciting time. It would be a great opportunity to learn about different cultures and histories.
4. Manage a large operational P&L, with multiple stake holders.
The challenge with managing a large P&L account, is successfully leading through all the soft issues and stakeholder trade offs as well as driving the business performance numbers. It will give you a grounding in managing complexity so that once you master this, you don’t get stuck in day to day detail and “doing” but you build a business system which is underpinned by great people. You can then move on big decisions,transforming a business.
Successfully taking responsibility for driving performance and operations in a number of significant profit-and-loss accounts is critical experience for becoming CEO of a major business.
Eric Daniels former CEO Lloyds advises, “By your 30s, you need to be managing some considerable part of a firm with people and a profit-and-loss account. This is when you distinguish yourself or don’t: it’s when you go up or sideways”.
5. Have a great mentor or CEO coach
About 40% of FTSE100 CEOs have used coaches and an even higher proportion advise their top teams to have one. You need to get a CEO coach who is either a former CEO, or really has experience in coaching top CEOs; a confidant who can give you great coaching on business, personal leadership and setting your life up so you can ‘enjoy’ while still being CEO. Quality CEO coaches are rare and can hold up a reality mirror up to you, can encourage you to be bold, and at times can put an ‘arm around you’. Ideally your coach will bring global CEO best practice from working with other successful companies, helping land them in your particular situation.
“It’s extraordinary to think you can be excellent at something without a coach. The notion that Roger Federer would not have several coaches is ridiculous…As a CEO, the idea you can do it on your own is extraordinarily arrogant”. Richard Baker, former CEO Alliance Boots
“My coach has given me the personal energy and maturity to deal with things. It gives me more inner strength and helps me to cope with having to give lots to other people and often getting nothing back”. Paul Thompson, former CEO Sage
6. Build a trusted fellowship and partners
Top CEOs know it’s not all about you. As you work through your thirties, identify people who are of exceptional ability, who compliment you well and who you can trust. Over time build up partners who are world class in their specialisation and will be adaptable, who will help you come up with solutions when you’re a CEO. You need to surround yourself with people who you can work with long term and who will bring external value. Work with people who are constantly coming up with new ideas and connecting you with other smart people who can be a part of your ecosystem of talented people who then will support you.
7. Spend some time in an early stage company or a corporate venture
The purpose of this, is so that you understand what it takes to build a company from the beginning, in an entrepreneurial way rather than a corporate way. Nowadays, there is no longer a traditional corporate career path that you should be taking – think about the alternatives. Doing adventurous things is fun! James Bilefield has CEO start-up, hyper growth building experience as well as corporate and digital venturing. From founding Upmystreet.com to globalising Skype and leading Conde Nest Digital. His advice is interesting.
“I’ve left successful positions with great prospects for riskier options because I get frustrated If things aren’t moving fast. The key thing is to keep life fun and not to get bored. I’ve been lucky to be able to do that. Get out there and take risks”. James Bilefield
8. Build career momentum
You’ve got to build career momentum – build a collection of successes, continually stretch yourself, learn from the occasional failure (this will happen as much as you try and avoid) and work your way up.
“Find a trend, get a foothold, raise capital, and take an expansive view; there’s no issue if you blow out early. I had 13 ventures before I started Xstrata”. Thras Moraitis, head of group strategy and corporate affairs, X2 Resources.
Expect frequent change in role and responsibilities. A CEO Designate for a FTSE 100 company which I coach has had 4 roles in 3 years. This has really stretched him but also have given him some fantastic accelerated business and leadership experiences.
You need to mould your career experiences so that outsiders can see that you’re going to make it. Make sure you’ve had the opportunity to interface directly with a range of stakeholders such as shareholders, regulatory bodies and politicians, lobbyists, and pressure groups.
Internally it is important not just do your job well but to be a key contributor and team player in the exec team. Create good corporate karma, as ultimately, many of your peers will be working for you when you are CEO. It’s also good to take on a non-exec role early within another company, which will give you vital experience on another board and will show that you’re a corporate player.
9. Question yourself : Is it really what you want to do?
“I can’t remember the first two boys growing up when I was with my first wife”. FTSE100 CEO
“I didn’t see my son grow up; we’re only now building a relationship in his late teens”. FTSE 100 CEO
I don’t mean to be the voice of doom, but you’ve got to ask yourself before you take a CEO role, is it really what you want to do? You need to beware that the CEO role done badly can get on top of you, damage your body, mind, and spirit, and ruin your personal relationships.
These jobs often end up subsuming your life and can exhibit personal failure in a very public spotlight which can affect you, your family and the reputation of your company. Some CEOs never recover from this. Take Andy Hornby for example, who was one of the youngest FTSE 100 CEOs in his 30s who ran HBOS but then failed during the financial crisis and eventually became in MD in a Gala Coral.
You need to know how you will stop work taking over and find your balance between work and enjoying your life outside from being CEO. If you want to get this balance you need to:
- Drive your own agenda – don’t let the business drive you.
- Build an active support network of true friends and partners who will ground you and take you out of corporate life.
- Spend time doing what you love and keep up passions and hobbies
- Ensure you make time for yourself to be fresh and connected so you always at your best.
“It is possible to organize life in such a way that you can balance private life and business. If you work hard and have the right people around you, you can make it work. If you delegate, put in controls, you can have a good home life”. Paul Walker, former CEO Sage
“The most important thing is my family and friends: I take every holiday I’m entitled to”. Richard Baker, former CEO Alliance Boots
10. …and don’t forget to enjoy your 30s!
As my Mum would say to me “your 30s will go in a flash so make sure you enjoy your life and don’t make it all work, work, work or you’ll regret it, even if you are successful”.
So, in conclusion, these suggestions and experiences should prepare you to be a great CEO but also will help set you up to really enjoy the job. Archie Norman Chairman of ITV told me “unfortunately most CEOs only really appreciate how great the CEO job is when they stop to become Chairman”.
Give this article a like if you have found the tips helpful.
Comment: do you have any other suggestions to preparing-to-be CEOs?
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By Steve Tappin
Chief Executive, Xinfu, Host BBC CEO Guru
Steve is a personal confidant to many of the world’s top CEOs. He is the host of the award winning BBC ‘CEO Guru’, which features in-depth, on-the-record interviews with the CEOs of the biggest and fastest-growing companies. Steve is the author of ‘The Secrets Of CEOs’, which interviews 200 CEOs on business life and leadership.