STUBBORN PERSISTENCE: REFLECTIONS 6 YEARS INTO MY CEO JOURNEY
On January 1st of this year, I began my seventh year as CEO of gWorks. When I speak to others in the ETA community, they usually say, “You must be getting ready to exit then.” Nope. After relentlessly giving my all to the business, why would I want to step away when I’m in the good stuff?
I thought sharing some reflections about six years as a CEO for those of you toiling away in your search or early in your operator phase. It is a meaningful journey, and don’t lose sight of why you’re on this path!
Context: Search length: 6 months Acquisition date: January 2015 Company: gWorks HQ Location: Omaha, Nebraska Industry: GovTech Segment: Local Governments
Reflections 1. My most important job is to be stubbornly persistent in the realization of my vision. I have set a course for my company. At the front is me, and behind me is my team following my lead. Between us and our destination are thousands of faceless beings whose job is to punch me in the face every day. They want to distract me or discourage me or hurt me or knock me down. I take the blows, I don’t fall, and I don’t relent. I keep walking forward towards the vision, and my team stays with me and attracts people to it. I believe my stubborn persistence gives strength to the organization and is a duty that I have to execute well.
2. I’d rather be roughly right than precisely wrong. One of my investors said that to me during my search, and I’ve carried it ever since. I practice decisiveness. I make most decisions quickly that I believe directionally correct. We’ll course-correct and adapt as more information presents itself and the situation develops. This decisive, iterative decision-making process helps me when I must make strategically critical decisions. I have a body of experiments, pivots, data, and so on to aid me in the big calls. Other benefits I’ve experienced from this approach are reinforcing company values and culture, encouraging management and employees to take more ownership in their decisions (although they still may want validation before pulling the trigger).
3. I made some tough decisions that had short term pain but have proven out to be long-term gain. I stopped offering a service that accounted for 20% of my annual revenue because I knew it was prohibitive to the long-term realization of my vision. Overcoming the culling of that service was painful from a short-term cash and revenue perspective. Still, it sharpened our focus, and we replaced that loss within two years with revenue that was core to our business – Annual Recurring Revenue from software. I focused my segmentation on local governments, which means I had to “fire” the segments that no longer fit us. That was another material portion of revenue and cash, and it stung. But it sharpened our focus, and we replaced it within two years with what was core to our business.
4. I had to build a culture from scratch, and it is a continuous process. I took 200+ years of tradition and norms for granted when I was in the Navy. Across the three companies I’ve acquired, the culture I inherited reflected the previous owner’s personality and that of a lifestyle business. If I were to build the company that I want and attract the people I need, I needed to make it anew from Day One. It’s a laborious and repetitive process. One of my employees suggested during my fourth year that we codify our culture in a book. So, we did and gave every employee (and new hires still) a copy. Furthermore, we posted our culture book to our website for anyone to view and download. We want people to read it and pre-screen themselves for us by either thinking A) I identify with that or B) I don’t. We know it’s been working as we’ve improved our hiring success rate, and people bring it up in interviews.
5. Ah-ha in Year 3. I had the ah-ha about the long-term vision and true purpose of my company in Year 3. I had a rough idea of when I started and had simple goals. But in Year 3, it hit me like a lightning bolt, and it’s been the definitive path I’ve had my company on since. Most of my growth has occurred since then, too. The importance of the ah-ha in a Searcher’s company was reinforced at the Stanford Search Fund CEO conference in September[redacted]I noticed most of the panelists had been in their companies for greater than ten years, and all had an ah-ha moment in Year 3 or 4 that dramatically shaped the future of their business and life. It’s part of the reason I’m in no rush to exit. Be patient—your ah-ha moment will come.
6. M&A is so much better and more fun after your first deal. You’re credible. You can walk from a deal without losing sleep. You can add huge value to your clients, employees, investors, and yourself. It’s awesome.
7. While I could write on and on, I’ll end with a more personal reflection. I’ve learned much about myself, my strengths, and my blind spots. I’ve accepted some aspects of leadership that I am below standards, but some parts are excellent. I try to hire management that can fill my blind spots. I am who I am. Some people will like me, and some won’t, but I don’t care about that. I care that they trust me to make good decisions so that they have a place to come to every day to work and be a part of a great team. And because they trust their teammates and me, they’re willing to contribute to the company and culture.
I can’t imagine doing anything else other than being an ETA CEO. So—stay on the path. Be stubbornly persistent in your search and then your business. You’ll do great.