Management Shortcomings

Let me explain. My experience suggests that only 10 percent to 20 percent of solution providers today have a real CEO at the helm,one that has been specifically educated to run a technology business and one that has developed the requisite skills required for managing a solutions company.

With the right CEO, most solution providers with a strong position in their market, or even a good plan, can be successful. In contrast, it is almost impossible to succeed with a mediocre or poor CEO. The odds are clearly stacked against those companies that try to succeed with no CEO. As for boards of directors, fewer than 10 percent to 20 percent of solution providers, my research shows, have formal or even informal boards.

Top-quality CEOs build solution-provider businesses that have several identifiable success attributes. For example, top CEOs build businesses that survive more than five years and are profitable. They also build businesses that have stable ownership and management structures, and companies that put an emphasis on financial and business planning.

Furthermore, top CEOs build businesses that engage in ongoing performance monitoring that regularly focuses on revenue, expenses, cash flow and operating data. They build businesses that have functional business and growth-planning processes that increase in sophistication as the size and complexity of the businesses increase.

In particular, top executives build businesses that have financial structures matched to the stage of development of their businesses and to the nature of their businesses. Finally, they build businesses that focus on client retention and business expansion with existing clients.

The high-growth solution providers that top-quality CEOs build have, in addition to these success attributes, a unique set of attributes that support high levels of business growth. Top CEOs, for example, focus on driving innovation throughout their businesses and processes. They concentrate on updating and modifying their businesses and their systems, as well as on client retention through quality customer service.

Top CEOs are also masters when it comes to driving quality customer experiences that drive high levels of word-of-mouth notoriety. They do this by driving client acquisition through the sale of new and improved products, services and solutions.

In addition, top CEOs are also well-versed on the importance of business planning and cash-flow planning, employee acquisition, and employee training and retention.

One last thing: Top CEOs are skilled at building businesses that focus on higher levels of financial flexibility characterized by more sources of capital and higher levels of equity and permanent capital.

Sound like a lot? It sure is. But anything less leads to mediocrity. Or worse.