Advice for CEOs

Patents can be a valuable defense against competitors. But the high cost of creating and defending patents requires a smart IP strategy for growth and emerging companies.

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.

Few if any attributes of an emerging growth or middle market company are more important than the credentials and capabilities of its founder or CEO. For example, imagine an investment banker considering whether to take on an early stage company as a client he will try to raise capital for. Or a venture capital or private equity professional considering whether to invest in such a company. To be sure these transaction and investment professionals will look closely at the company’s positioning, its strategy to win market share, the attractiveness of its products and services, the skills of its organization. But it is their assessment of the CEO’s track record and abilities and the management team he or she has assembled that may lead them to take a chance on the company. As one partner in a private equity fund that was considering an investment put it: “If it’s a “B” plan but an “A” team, I’ll take that deal every time.”

Middle market CEO’s and entrepreneurs, like other business people and executives, are prone to believe in a one word mantra: “execution.” They are inclined to put their faith in what has been called: “Middle” Leadership - the view that a company’s strategy and goals are basically right. If the business strategy or even the entire company fails, they are inclined to point the finger of blame at the way it was executed.