CEO building successful business is increasingly becoming important for company resilience, and for the leader who are uniquely suited for the job. This may be the most challenging time in more than a generation to be a CEOs who are starting a new business. Global uncertainty, a concussive series of tech-driven disruptions, and an ever-broadening set of risks have piled onto an already daunting set of pressures in running a successful business for CEO.
Those new business aspirations are simply impossible without an active and fully engaged CEO. In fact, if a CEO isn’t ready to commit, it’s probably better for the company not to pursue a new business.
CEO traits and priorities that support a new business
Competing priorities mean that CEOs need to be conscious of the unique aspects of their role as chief executive that allow them to have the greatest impact on building new businesses. Of course, an important function of the CEO is to delegate various tasks to teams and empower leaders across the business.
Tasks CEO’s take for successful business
Here are few tasks that CEOs can undertake to build successful new businesses. In digging into this set of activities, we found that there are five tasks that can’t be delegated—tasks that only CEOs with their overarching strategic focus and decision-making authority can do. When CEOs adopt these measures as part of a clear playbook, they can succeed in building new businesses.
CEOs should aim high
If companies expect 50 percent of their new revenues to come from new businesses, products, and services, they need to aim high.
The CEO has a challenging role to play to ensure that the time and resources that go into a new business are worth it. The CEO’s laser focus on value is crucial in keeping the organization from being distracted by the latest hot idea that might sound good but that doesn’t have the market potential to be transformative.
Orienting the entire company toward this level of value starts with identifying a clear aspiration, ambitious goals, and specific targets.
Bold ambitions are particularly important when there is directional clarity in a business-building thesis and its value but there is not enough conviction in some parts of the business to invest in hiring a significant number of people or building out the technology assets needed to capture the opportunity.
Invest sufficiently and protect the new business
CEOs should make it clear that allocating protected funding for the new business is one of the most important things they can do. CEOs must invest sufficiently and then protect that money from the inevitable attempts from incumbent parts of the enterprise to take it back as issues arise.
The CEO has to extend that protective posture to preserve the new business’s broader independence. While it’s tempting to use established tools and processes in IT, HR, and marketing, for example, hard lessons have shown that these come with significant bureaucratic strings attached that lead to cost overruns and significant delays.
Create right team
The success of a new business relies on finding the right balance between the independence of a start-up and the relevant advantages of the existing business. Where the CEO can have the greatest impact is in striking that balance, starting with hiring the leader for the new business. The CEO needs to find someone with not only the entrepreneurial and operational capabilities to run the business but also the softer influencing and collaboration skills to be able to work well with those in the incumbent business—whether that means working with various functional leaders to access talent and assets or aligning strategies with the board.
Give leaders a stake in the new business’s success
Inevitably, there will be conflicts between the new business and the established one. The CEO must be ready to personally work with the corresponding functional or business leaders to resolve the issue.
Importance of communication for CEOs
CEOs understand the importance of communication—much of their success is based on how well they do it. But in the context of supporting a new business, CEOs often underestimate how systematic and persistent communications need to be and how much they can affect the outcome of the new business. By communicating that a new business is part of a broader shift to become more of a digital, software, or tech-enabled company, for example, a CEO can help support new multiples for his or her public companies.
The art behind successful communications is being systematic and intentional in tailoring the message to the audience. When speaking to a skeptical board, the CEO should highlight growth opportunities and potential disruptions based on marketplace dynamics.
New-business building needs to become a core institutional and management capability to drive growth and boost resilience. Only when CEOs focus on tasks in which they have unique authority and leverage can this happen.
