It’s not an easy time to be a CEO. Beyond the normal bottom-line concerns that keep chief execs plenty busy, today’s leaders must constantly also worry about reputation issues of the cultural and societal variety, building and maintaining a strong team in a skills-challenged job market, and catering to the needs of an increasingly hard to please set of stakeholders.
New research from multi-stage investment firm Norwest Venture Partners takes a deep dive into the psyche of private company U.S.-based CEOs and founders, exploring how these executives and their leadership teams operate and function, how they approach hiring and the culture of their organizations, and how their leadership styles reflect their own personalities.
The firm’s new 2018 CEO Journey study uncovers the toll these pressures are having, revealing that more CEOs and founders are prioritizing health and personal development to find work/life balance, are experiencing a “fear of failure” of feeling unqualified, and struggling with hiring the right employees.
Connecting the dots from data to insights: What we should know about CEOs today
“CEOs are the driving force behind a company—from defining the vision to developing the culture—they are the single biggest factor impacting the success of a business,” said Jeff Crowe, managing partner at Norwest, in a news release. “For this study, we wanted to tap into the mindset of CEOs and more deeply understand their challenges both at work and outside of work, so that as board members we can be more effective in bringing resources and programs to help them.”
The survey results are intended to inform investors with insights regarding how to best support CEOs/founders.
“This data reinforces the areas that Norwest currently places an emphasis on, such as executive coaching, community building, peer mentoring, hiring and culture,” said Katie Belding, partner of marketing and portfolio services at Norwest, in the release. “We’ve also uncovered new CEO pain points such as conflict resolution and public speaking, and we continue to develop new programs and build communities to address these needs and help our executives achieve their professional and personal goals.”
Prioritizing health and personal development helps leaders find balance
When thinking about the role of a CEO/founder, people typically think of these roles as involving all work and no play. However, the study results show that while today’s business leaders are just as dedicated to their work as they’ve always been, they’re actually prioritizing their mental and physical health regardless of how much work is on their plates. While on average, CEOs/founders admit they haven’t had a complete work-free weekend in six weeks, the study found that most (71 percent) get six hours of sleep or more per night, exercise multiple times per week (60 percent) and find time to read frequently for pleasure (48 percent).
Additionally, about half of these leaders meet with a personal trainer regularly, consult with an executive coach (32 percent), work with a wellness coach (32 percent) and see a therapist (22 percent). Aside from health, wellness and business coaches, respondents also spend time learning from their peers. The vast majority (93 percent) socialize with other CEOs/founders a few times a month or more, and 27 percent do so multiple times a week.
Fear of failure is top concern for CEOs
When businesses live and die by their ability to secure funding, maintain growth and hire the right people, CEOs/founders are under constant pressure to succeed. Ninety percent of CEOs/founders admit the fear of failure keeps them up at night more than any other concern.
Other challenges CEOs/founders face include revenue growth (49 percent), raising capital (49 percent), and maintaining work-life balance (46 percent).
Starting a company is a huge undertaking and few CEOs will feel 100 percent equipped to handle everything that being an entrepreneur entails. CEOs/founders most wish they had more expertise in the hard skills of operations (53 percent), finance (51 percent), and sales (37 percent), prior to starting their business.
Expertise in hard skills is not the only important factor when starting a company. Looking back, CEOs/founders realize they could have used some greater expertise in certain soft skills as well—primarily in public speaking (37 percent), planning and organizing (37 percent), and conflict resolution (37 percent).
Considering many CEOs/founders recognize a shortfall in their own skill sets, it comes as no surprise that they find it tough to hire staff for executive-level positions requiring those same skills. CEOs/founders find it most difficult to fill positions for sales/customer success leaders (38 percent), technology/engineering leaders (37 percent) and operations leaders (25 percent). The importance of these hires helps explain why more than half (53 percent) of CEOs/founders will invest their time to conduct three or more in-person interviews before offering employment.
CEOs/founders rank individual investor expertise as most important
The search for allies to succeed in business doesn’t stop at the workforce. CEOs/founders eventually find they need to attract outside capital. Fortunately, most CEOs/founders recognize fairly quickly that they will require expertise and resources beyond just family and employees. The study found that within a year of starting their company, 79 percent sought outside investment.
The study also analyzed what CEOs/founders are looking for in an investor. A major disconnect with an outside investor could mean the difference between a company’s success or failure. Individual partner expertise (47 percent) was cited as the most important factor when seeking a lead investor, followed by alignment with their company’s vision (44 percent), and the ability to fund their company over the long run (42 percent). Once the decision has been made, a premium is placed on bringing business development skills to the table (33 percent) as the most important help their investor could offer.
The NVP CEO Survey was conducted by Wakefield Research among 200 CEOs/founders of privately held, venture- and growth equity-backed companies.