Startup CEOs: Masters of Alignment

He-man and Skeletor

If there’s one thing startup CEOs have to excel at it’s managing the alignment of interests across a ton of different people. It’s a lot more complicated than you might think.

Alignment means everyone is pushing for the same goals and executing on their part in order to see the shared goals realized. It’s impossible for everyone to be perfectly (or even “reasonably well”) aligned all the time, and that’s where the role of startup CEO as Master of Alignment is so critical.

A startup CEO needs to align all of the following people:

  • Investors
  • Board members
  • Co-founders
  • Employees
  • Partners
  • Customers
  • Market analysts / pundits / bloggers
  • Vendors

Everyone in that food chain (or continuum) needs to be aligned as often as possible. And the higher up the list, the bigger the challenges, and the bigger the risks. When you’re not aligned with investors and board members, you’re in for a world of hurt. As I’ve often been told, “The board is there to fire the CEO.” Fun.

If there’s misalignment with investors when it comes time to raise follow-on financing, you could very well crash and burn. Investors can (and will) push right to the brink with your company to test your mettle, promote their key agenda items, and see if you can hit the necessary milestones for them to re-invest. And when your existing investors pass (if they do end up passing), it sends a big negative signal to the rest of the marketplace.

A lack of co-founder alignment can kill a company before it gets off the ground. And this is one of the #1 sources of anxiety and frustration for startups.

The same holds true with employees, especially when a startup first starts hiring. Each of those first few hires is so critical — get that wrong, end of misaligned — and you’ll be set back for months.

Each of the above points is worthy of further discussion. But the key for startup CEOs is to recognize themselves as the people who focus on aligning everyone — to themselves and to each other. This doesn’t mean a startup CEO is a conciliatory peacemaker. Nor is a startup CEO a pushover bending to everyone else’s will. Quite the opposite. A startup CEO needs the confidence and conviction to state their point, push the debate, and align everyone around their vision. A startup CEO can’t be focused on aligning the interested parties around someone else’s vision and plan — those belong squarely in the hands of the startup CEO. But a startup CEO can’t assume that everyone will fall in line (or that their vision and plan are perfect), and that’s where he must be a Master of Alignment.

How?

Communicate, communicate, communicate. And then, communicate some more. Transparency and openness are key. Structure too. You’re not managing communication and alignment by picking up the phone and “shooting the shit” with people (although you don’t need to over-manage this process either). It has to be structured, organized and with purpose. The communication has to be strategic. I wrote a bit more about this here: 4 Ways to Align Interests Between Startup Founders and Investors.

Startup CEOs need to be keen observers of people’s moods, and master interpreters of language. Very few of the listed parties above are necessarily going to spell things out for you (although at some point in time, when they’re really pissed off, they will). But if they’re being subtle, unclear or just plain old mysterious, you need to pick up the hidden meanings and intent in what people are telling you. Being a Master of Alignment takes practice and experience. It’s also not easy. And it’s not always obvious how important it is to keep alignment front-and-center as a key issue when you’re head down working your ass off to build your startup. Alignment is one of those issues that quickly and unfortunately gets pushed to the side, often only resurfacing when it’s too late.

Here’s some reading material that will definitely help:

This is the 2nd of a series (don’t know how long it’ll go) of blog posts about what it’s like to be a Startup CEO. The first one is here: Startup CEOs: Delegate Responsibility Don’t Outsource It.

Image from CG76.

May 5, 2010 Posted in Startups by

  • danielharan

    A lot of entrepreneurs make it really difficult to get alignment by choosing the wrong people to do business with.

    We can fire customers. We can choose investors. I passed on a couple before finding MSU. Only one that I pitched said no; there were several I didn't even bother approaching.

    Now that I'm hiring, I'm interviewing some amazing people. Some of them won't make the cut even though they are incredibly talented: I'm hiring a team which has to be balanced. You can't just hire goalies.

    It's a bit of a negative view on alignment: avoid working with people that can't be aligned. Of course, once you've signed the contracts, you still have to communicate. Hopefully this advice will save other entrepreneurs some grief.

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  • http://hinkley-lights.com Yasagun K. Michi

    All those components (alignment) are completing each other. And I believe the goal could easily be hold when they are sync well. But getting all run well sometime seems so complicated. So the “A startup CEO” plan goes down. As what you said, misalignment of investor and board members means we come into world hurt and A lack of co-founder alignment means kill our company before it gets off the ground.
    I think getting the goal is reached needs a good preparation before.
    Good stuff Ben…

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  • ChristianI

    I don't really agree with the concept of a CEO as the one that “… focus on aligning everyone” As a matter of fact, most people are not aware of the duties a CEO have, at least not the tangible ones, I have seen . Therefore, making CEOs responsible for keeping the balance between people interacting within a company is asking for too much. I mean, most companies, at least the big ones don't even know who the CEO is, not personally. Managers are the ones to be worried about communication, communication and more communication skills because it's their responsibility to have their teams united and productive. If you look at the questions entrepreneurs ask at startups.com you will see their questions make reference to management skills, management strategies, management styles, but the CEO is never mentioned, not as an active party, but more like an image or a superior entity that is beyond everyday business problems.

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  • Eugene Sunday

    Its a good thing that you've used that picture above since I have those collection. At first I was thinking why you used that picture then I've noticed the title master of alignment and the picture was He-Man which is the master of universe.
    Excellent article, I will give you two and more thumbs for posting this one.

  • http://www.robertopirlanta.com P?rlanta

    Dealing with investors is really hard. Especially when they try to give innovative ideas…

  • http://www.sesadvisors.com Esop

    It is hard to be an CEO especially if your people are against you. You really need to get close to your people for you to achieve your status.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    My posts are generally about startups (i.e. small teams) because that's my focus. In a big company things may be different, although CEOs are still responsible for alignment issues, perhaps even more so. Imagine the CEO of a public company working to align the interests of shareholders…

    In a startup CEOs are the managers. There aren't any mid-level managers between the CEO and employees.

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  • bettermyrelationshiop

    Interesting post. You definately see a lot of entrepreneurs make it really difficult for themselves to get alignment by choosing the wrong people to do business with.

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    I often wonder how CEO's can balance so much with so many people with so little time. I often think that I would like to be one but I'm not sure that the payoff is worth the stress.

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    nice article bos….

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  • http://twitter.com/nnnflorida NNN Florida

    Communicate with Investors and Marketing and Employees is the key. Some Companies have great ideas and products however the CEO might not be a good Business person.

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    Good relationship with investor and good performance is the best thing. But, I agree with your idea communicate, communicate, communicate.

  • http://www.nnncommercialrealestate.blogspot.com/ Net Lease Properties

    Right on, Benjamin. Good advice. Start-ups need the CEO to be into everything until it gets on course. It is important for the Investors to believe and trust the CEO. It can be a fine line between caving on some issues or keep working on with your ideas, not the Investors suggestions.

  • http://startups.com/ M_Dilli

    Great insight, @Chrisitian I, As a matter of fact, CEOs are seeing and consider to be more like an icon, like the face of a company and the one entitled to give important speeches when necessary. However, those handling the main tasks within a company and the groups of people working within that same companie are managers and secretaries of higher ranges. Maybe the article makes reference to CEOs as a generalization for the directors of a company. But, then , the answer by Benjamin is clear. It is true that in small companies the role of CEO is played by the business owner, who will also be the director, the manager, etc…call it what you will.

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    Hey Ben, you are clearly the expert of your field! Very thorough and inciteful guidance. There are so many postings I need to get through on your blog, wish I would have found it sooner. Keep up the great work.:D

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    good article and i like it. maybe i’ll come back to get another good articles 01:42

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    Great Article. Communication and good relationship with investors is the main thing. CEO should be a good Businessman to make the Company successful in its business!

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    Hi, Great Article & knowledgeable too i just enjoyed it too much good post.

  • http://www.instigatorblog.com Benjamin Yoskovitz

    My posts are about startups. I'm not thinking about CEOs of multinationals…

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    thank you

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    It's a hard and long process, but just look at fortune 500 companies and the worlds biggest companies like Microsoft. If done right it can pay off, no matter how many people say your crazy for thinking people would enjoy being shot with water out of plastic toy's. xD

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Ben Yoskovitz
I'm VP Product at GoInstant (acq. by Salesforce).

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it).

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