Advice for CEOs

To say that a main goal, perhaps the main goal of any company is to make money is to state the obvious — or is it? There are times when other goals are more important than profitability, especially when a company is ramping up and investing in market penetration and infrastructure. It’s a rare company that makes money consistently from Day One of its operations.

A quick review of recent news headlines reveals a business environment with clear challenges and hidden opportunities. In the industry in which I have spent much of my career, energy, commodity prices have fallen precipitously, especially oil prices. On the wider scene, international growth is slowing; political uncertainty exists in many places including Latin America, Europe, and the Middle East; and the United States is in the middle of a presidential election campaign that is peculiar and unsettling.

Entrepreneurs tend to be optimistic by nature. As a new year begins there is ample ground for many entrepreneurs to feel good. The latest signs of an improving economy were strong enough to help persuade the Federal Reserve to raise interest rates recently--for the first time in nearly a decade. A boom in valuation of technology-based companies, private as well as public, is driving expansive optimism in that sector.

For developers of both internally-facing corporate applications and externally-facing web sites, a mobility strategy is no longer an option but a necessity. The reason is simple: mobile phones are where your audience is. Wherever you see people these days—waiting for a train, on line at the supermarket, working out at the gym—they are looking at their phones. Why wouldn’t you want to transform your marketing and communications so that you can reach and influence people via that phone in their hand?

Middle-market companies often operate as small fiefdoms under the control of the king, or to use a business term, the CEO. Very few mid-sized companies have a formal board of directors and for those that do have boards, CEOs tend to populate them with family, friends, and internal management.

When middle market private equity (PE) firms acquire a controlling interest in a company, their agenda for the new portfolio company is typically aggressive.