Why looking out the window with their feet up is the best thing challenger CEOs can do
The consequential difference between busy work and formative work
“The measure of a productive day”, we at the Craftory like to propose budding challenger brand CEOs, “is the proportion of which you spent with your feet up, looking out the window”. Customarily this is met with incredulous guffaws by these adrenaline-fuelled and universe-denting leaders, who invariably have achieved the success they have by being resolutely action-biased. But inherent in the preference for operation over reflection lies the widespread misunderstanding of how businesses grow, and the crucial role played by the CEO in the enablement thereof.
Filling a working day with busyness is both simple and deceptively satisfying. Rush through ten hours of slacks typed, meetings held and instructions given, and it’s easy to see why the resulting feeling of accomplishment can be mistaken for achievement. Conversely, the unwritten rules of office etiquette mean staring blankly into the distance is generally frowned upon, and most of us avoid it instinctively by seeking shelter behind our keyboards.
Busy work indeed runs companies. But busy work doesn’t grow them. At least not the gravity-defying sort of growth that’s characteristic of those challenger brands who scale to make a difference. The role of the CEO in driving such growth comes not from focusing on how to run the business, but how to change it.
Let that sink in.
Running a company is about the efficient execution of business processes: the never-ending grind of product innovation, marketing, sales, manufacturing and distribution. These processes come together to deliver the P/L, and they’re the responsibility of the operating team – ie, the C-suite. Transformational growth, however, comes not from the ever-more efficient running of a business, but from changing it: the essential decisions around what markets to operate in (or not), what equities to build, what structures and capabilities to put in place, and where to deploy capital. That is the role of the growth CEO – and in contrast to busy work, this type of formative work requires prioritising time spent thinking, rather than doing.
That, however, typically feels very alien to founder CEOs who succeeded with launching their ventures precisely because of their ability to get things done, hands-on. And it can lead to all manner of dysfunctional behaviour, like founders who doggedly believe that working tirelessly on “the next marketing campaign” or “the next product launch” will trade them out of a pickle. It never does. Continuing to do the same, day-in-day-out, won’t ever lead to a business that is 5x larger than it is today. It can’t. Many founders are blind to this, however. We even know of one brand CEO who spent her weekends washing dishes in the kitchen of one of her shops as her way of doing “something” to help the business grow. Washing dishes whiled away the hours in busy (if tragically low-level) productivity, but of course did zero to change the fortunes of her brand.
In contrast, successful founder CEOs know that their role shifts fundamentally into becoming the principal agents of change within their businesses as they graduate from product-market-fit to scaling. Three essential characteristics are required for this to work: (a) a willingness on behalf of the founder to let go, because only by hiring and empowering a first-class operating team can they lift their heads out of the weeds; (b) a solid understanding of the core building blocks (people, platforms, processes) that turn a scrappy startup into a grown-up business capable of tackling competition and changing markets, and (c) sober insight into what the ventures’ weaknesses against this are, and ruthlessness in prioritising what to change, when. All very different indeed from the skills required to get a venture off the ground.
So what’s a founder CEO to do? It begins with accepting that their job isn’t to work in the business, but to work on it. The measure of their competence isn’t how well they can do all the functional roles in the business themselves, but how skilfully they step back from operations, and instead attract a world-class team to run the business in their place. This also requires understanding that the founder and the business they created are two separate things (many founders wrongly believe they “are” the business, which invariably puts a cap on growth). The next step is to shift their attention to learning what great looks like in world-class businesses for essential capabilities like brand development, marketing or product innovation, and to assess how their own organisations benchmark against these. The final step is to map the competitive dynamics of the category they serve, to understand which capabilities need to be world-leading to win in the category at scale, vs which can remain just “good enough”, and to lay out a prioritised and focused agenda of change in their own organisations to achieve just that.
All of which is fiendishly complicated – and requires ample time in reflection, hands off the business, with feet up and gazing out the window.
Ernesto Schmitt is co-founder at The Craftory, the progressive investment fund on a $375M mission to back the world's boldest cause-driven CPG brands.
