Advice for CEOs

Newport Board Group Chairman Doug Tatum was recently interviewed on UNC TV, the PBS affiliate in Chapel Hill, North Carolina.

A familiar saying asserts that "it’s lonely at the top." If asked to relate this adage to business leaders, most people might think first of CEO's of Fortune 500-type companies. These executives sit atop far-flung operations and large, remote organizations, with hundreds or even thousands of employees they never meet face-to-face. They face intense pressure to maintain quarterly earnings growth and unstinting public and press scrutiny.

In the first part of this article, I discussed the reality that creating and building a business to scale is not an easy feat. As an entrepreneur you're not alone. Most will make the same types of mistakes.

Every emerging middle market company that Newport works with must define and secure its vision of the future. At the same time, the company’s present may at times seem precarious. The gap between where a company wants to go and where it finds itself right now can look very wide.

Ask an entrepreneurial CEO where they feel they have under invested in their company to get it to its goals. Many will readily point to “above the line” areas of the company as those they wish they could afford to invest more in: product development, marketing, branding or advertising. One area you tend not to hear mentioned is the finance function, specifically the CFO. Based on my many years as a CEO of global consumer goods companies, I believe that this can be a mistake: optimizing the financial group may be the most overlooked step to value creation in entrepreneurial companies.

In the first part of this article, I addressed steps to obtain capital for growth: optimizing cash flow from operations and presenting a high quality documentation package that portrays your financial history and strengths. With these as a foundation, consider several additional steps.