Interview Rowan Gibson Zurück
Don Strickland
You are one of the few CEO’s with both large public company and small startup company experience. Which was the most challenging and what lessons did you learn?

The two jobs are quite different. The CEO of a public company, especially a large one, is constantly being judged by the performance of the company’s stock. This often results in an inordinate amount of time being spent on investor relations which, while important, doesn’t directly move the business forward. Time management is key. You need to develop a discipline that keeps you doing what is most important for moving the company forward and not get distracted by “urgent” but relatively unimportant issues. Being the CEO of a small private company is almost the opposite, especially if the company is a venture capital backed startup company, as in my case. There, the small number of employees and the very focused Board keep you focused on two things: getting profitable and your exit strategy. Time management, however, is still the key. I developed my personal “CEO Handbook” which I consult with every day. It reminds me of where I as a CEO need to be spending my time and why. I encourage all CEOs to have their own version.

You had an interesting pathway to becoming a CEO – you began as an engineer and moved up the ladder with positions of increasing responsibility in manufacturing, sales, marketing and general management. You are one of the few that has actually done many of the jobs that report to the CEO. What do you wish the CEOs you worked for would have done differently?

My first piece of advice is to learn the basics of every function that is important to the company. Many CEOs have a background dominated either by technology or sales or finance. It is easy to spend time where one feels the most comfortable and “delegate” other areas of the company to someone else. Don’t do it. Once you understand the functional groups, you absolutely need to understand their mutual dependencies and natural tensions. For example, there is a natural tension between sales and engineering – if sales are low the sales group often blames it on the products and the product development group often is heard to say that sales doesn’t know how to sell the product! As a CEO you need to look past this and understand that what is really broken is probably the product development process. You might not be the one that can fix the problem, but you need to be the one that diagnoses the problem and gets someone to fix it. Don’t treat symptoms; solve problems.

How do you see the CEO job changing over the next 5 years?

I get asked this a lot. Even though there a lot of people making a lot of money telling CEOs otherwise, I believe that 90% of the CEOs job will not change over the next 5 years, apart from the normal “evolution” that always takes place. The core of a company is making and selling a product or service. Doing that better than your competitors means aligning all of the functions in the company under a common strategy, a shared culture and powerful leadership. That is what good CEOs do every day and that will not change. There are two areas, however, that I think will challenge every CEO over the next few years. First is being a great spokesperson for your company. In these times it is more important than ever for the CEO to be able to elevate their company with customers, the media and the investing public. Second is being absolutely honest in making personnel decisions. As competition increases there is no room for less than the best performance and that means making the tough decisions on who gets promoted and who gets made redundant.

You have worked in the US, Japan, Europe and the Middle East – how would you advise the CEO of a multinational to incorporate key trends into his business?

I agree that multinational companies face a challenge when it comes to winning in multiple geographical markets. Even if the product is a “commodity” the formula for success is different for every geographical market. Your marketing, your channels of distribution, your business terms, even your entire business model are often different across geographical markets. You can’t force what works in one geography on another. Being a successful multinational primarily rests on having the right local knowledge (starting with hiring the right people) and incorporating geographical requirements into your critical corporate processes such as strategy development and product development.

What are the biggest challenges for a multinational company today?

Change. Everything is changing and companies that are multinational are in an environment of hyper-change. Well managed multinationals do quite well when it comes to dealing with change in the fundamentals of their business. What is going to be difficult is the need to respond to the rapid changes being made in the regulatory and accounting areas, which of course differ by geography. Multinationals will also be faced by a new breed of competitors that always spring up in times of economic upheaval. Remember, multinationals don’t just compete with other multinationals. In fact, they most often get dislodged in geographical territories by regional competitors. It’s hard to see them coming and they are very swift to respond to local opportunity. What I’ve seen is that the truly great multinational companies act like an association of very successful regional companies, taking every advantage of leverage and scale, but bringing tremendous local focus to their businesses.

You mentioned changes in regulatory and accounting areas. Do you see any trends developing that will impact large companies?

There are several, but the one I would like to comment on most is “transparency.” Everybody talks about the benefits of being “transparent” and public companies are subject to various disclosure regulations based on the exchange on which they trade. The disclosure requirements are being changed in a way that will have a dramatic impact with something called “XBRL” (eXtensible Business Markup Language), which is an international standard. In the US all public companies will be required to file their public company documents in XBRL. I don’t have time to go into XBRL in detail, but what this means is that their financial results will now be transparent to various search tools through the use of searchable “tags” that give information on the disclosed financials. That will make the job of comparing companies much easier for professional analysts but, and most importantly, it will enable a whole new breed of “amateurs” to begin analyzing and comparing companies. And transparency is not restricted to large companies. As governments spend more and more of the taxpayers money, there is increasing pressure to be accountable for where and how they spend the taxpayers money. I expect to see national and local governments increasingly make their activities transparent.
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