One or two start-ups in a generation have magic. They are virtually guaranteed success. But that type of “its a given” situation is incredibly rare. Most start-ups begin with a vague idea and plenty of risk and uncertainty. As a CEO or investor, you’re making a bet that this team can take that uncertainty and forge it into something that works.
“A successful start-up requires a combination of organizational work, momentum, and technology—coupled with the right people and the right habits. All of it has to come together in a unique way to create a great company.” Praveen Tipirneni, MD | CEO of Morphic Therapeutic Inc (raised more than 200 million over 3 years) listed 5 common challenges (summarized below) that start up CEO’s face on the crunchbase website. TRUCE Solutions believes coaching is absolutely key to helping these leaders and their teams meet the challenges and excel in the process.
5 Challenges New Startup CEO’s Need to Tackle and How Coaching Can Help
1. You need to create and sustain early momentum for your company.
Challenge: The biggest mistake CEO’s make is waiting to work on the organization of a company until they know whether the technology or science is working. But when they discover it is there, they’re going to want an organization in place to capitalize on the opportunity.
Coaching: Effective leadership is essential for company success. The direction of the organization, after all, depends on powerful leadership. Each coaching session helps leaders grow on an individual level; it also benefits the entire company. Leadership will develop new strategies and learn how to set more effective long-term goals for their company, which can lead to greater success as a whole. Employee may be happier as a result, and the company itself may become more profitable.
2. You have a very short runway to prove the company’s worth.
Challenge: One fundamental difference between a start-up and a large, established company is how they’re funded. As a start-up, CEO’s have to earn their way to the next funding route. It’s just a fact of life that they have a finite amount of time to prove yourself to investors and generate momentum.
Coaching: Targeting coaching to a leader’s problem area makes a huge difference in attitude and abilities. Coaching allows the leader to learn and implement new leadership techniques tailored to the leader’s weaknesses. Techniques include the leader avoiding the terms “but,” “no,” or “however” as they accidentally discourage ideas or answering questions with questions as they tend to supply all the ideas for their team. Individuals that were difficult to reach before will respond better to their leader’s new approaches.
3. You must attract top talent, potentially with a little-to-no track record.
Challenge: Roughly 99% of start-ups are leaps of faith. The CEO’s job is to convince talented people to take that leap with him/her and are evaluated on the people they bring in.
Coaching: Deb Weidenhamer, founder and CEO of Auction Systems said in a Fast Company article that “coaching can be the biggest differentiator as why candidates accept the position. I think they get really excited about the prospect of having someone help them move toward being better. It also pays off in terms of retention. It’s something that most people aren’t going to get when they go to a new company.” (Fast Company)
4. You want to make a good first impression because it will last for years to come.
Challenge: First impressions affect people in ways that are difficult to quantify—and they tend to last much longer than you’d guess. The truth is, CEO’s are constantly making impressions, whether they like it or not. That’s especially true when it comes to investors and it is up to CEO’s consciously decide what kind of impression they want to make.
Coaching: Coaching enables leaders to realize that their communication isn’t always as clear as they think. Coaches will highlight areas of communication that need improvement and practice those areas with the leader. Coaches can also teach leaders how to communicate with individuals of different personality types, cultures, or ages using their past experiences as examples. Good communication skills allow people to connect with one another. A coach who can guide an individual to communicate effectively will improve their credibility and overall leadership abilities.
5. You have to break old habits and establish sustainable ones.
Challenge: Once something becomes a habit, it’s incredibly hard to change it. Bad habits lead to mistakes, and mistakes are hard to fix. So, it’s essential for CEO’s to take advantage of the blank slate they’ve been handed with a new company. Take time to reflect on how you want the organization to operate, and then work to instill those habits while the company is still young.
Coaching: Coaching reduces narrow-minded thinking in leaders. Coaches encourage the leader to open their thought patterns and consider other points of view by asking questions. This benefits the leader by provoking free thoughts and encouraging flexible leadership. The Center for Management and Organization Effectiveness calls flexible leadership a “business necessity” as it allows for quick, creative, and precise decision making under pressure.