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The reality of running a business is very different to the image portrayed in television shows. In fact, around half of all start-up businesses fail in their first four years.

Introduction Strategy People Financials Conclusion ELP Our Sponsors

OEC LAVIVRUS EDIUG Copyright © European Leadership Programme August 2009 – ALL RIGHTS RESERVED


Macro market factors are only part of the pressures facing CEOs. Everyday, even in ‘normal’ times, CEOs are confronted with difficult situations either related to sales strategy, people or finances that if not addressed properly, could be the start of their business’s failure. But for those who can overcome the challenge of tough market conditions, this is the ideal climate to build up your business. Surviving the mother of all recessions puts a business in a strong position to survive whatever else is thrown at it. Most CEOs and entrepreneurs have no regrets starting and running a business. But in order to be successful in business, they must always look to learn new skills and hone those that they already possess. This guide has been designed to be a ‘helping hand’ to CEOs and entrepreneurs to enable them to survive in today’s business minefield. The guide will outline the most common problems faced by CEOs and entrepreneurs, each followed by advice and guidance to find the shortcuts to success and avoid the pitfalls. Ashley Ward Chairman, European Leadership Programme Partner in Nexec Partners





Understand the market

“Don’t sell ice to Eskimos”

You’ve got your idea and you’re excited about taking it to market. But have you understood or even asked what the market’s motivations are for buying it?

Strategy Timing is everything; you should not leave things to chance, especially if you are an entrepreneur. A smart entrepreneur understands the fundamental steps to turn ideas into a successful reality. To this end, they understand that the business must survive to be in the market when the market is ready. It was once said that “the business didn’t fail, we just ran out of cash before we had a chance”. Can you fund a business for survival by leaving events to chance?

Before building a business, it is vital to understand what the market wants to buy or, in some cases, where the pain points are. If you have passion and conviction for a product or service but no one else ‘gets’ it, you should ask yourself some serious questions. Great entrepreneurs often have exceptional vision… but this has to be articulated in a logical sequence for others to buy into it and for it to stand a chance of getting funded. Once the market needs have been researched and established, the ideas need to be tested as part of the product management process. A good example is Nintendo, the maker of console games. Several years ago, it needed to regain its leadership position, find new ways to delight gamers, and reach new audiences. To do that, it went straight to the source - gamers themselves. Through a community of experienced gamers, Nintendo gained valuable insights into marketing needs and preferences. This has influenced everything from actual game offerings - like an online library of “nostalgic” games that appeal to older gamers - to new product design such as the intuitive controls of the Wii system. The collaboration seems to have paid off: Nintendo is once again ahead of the competition with 44% market share. Survival tip: In the ‘go to market’ decision process, back the evidence, not gut feelings because 99% of the time, the gut feeling is wrong. This is the probably the only time we would recommend anything takes precedence over instinct!






“It’s not a dirty word”

An entrepreneur once said: “I can buy, hire, outsource and manage with some certainty everything....except the decision mindset of my customers”. This is because persuading customers to buy is a largely uncontrollable issue and one that money cannot fix. Despite being one of the most challenging facets of business, lack of sales is usually the root cause of business failure. Indeed, sales performance is the pillar that keeps the entire business structure up; no new product or strategy matters without it. Top managers need to nurture the sales engine and know it back-to-front. It’s amazing that in this the 21st century there are still some eminent business advisors and members of the corporate elite who have never ‘knocked on a door’. Putting sales at the epicentre of your business involves going beyond your comfort boundaries. For example, if you have estimated that you need to reach 1,000 people to sell 10 products, you should push yourself and your team to reach 10,000 people to sell just 5 products. A fundamental and common error is to assume the ubiquitous 1% penetration of an identified market when what is needed is an understanding into how many people are going to have to take how many decisions and in what sequence for your plan to succeed. Even brutally cynical observers of markets rarely underestimate possible market penetration. Early stage companies that succeed in their selling strategy usually have the CEO being a top salesman spending as much as 70% of his/her time market-facing. Survival tip: Treat sales as an extreme sport – it’s about energy and focus rather than taking risks. Keep pushing boundaries beyond what you first thought possible and be bold on a daily basis.

Organisational structure

“Who cares what it looks like so long as it works”

Building a healthy trading business is different to creating a corporation. In the early part of the dot com era when money seemed to grow on trees (or was delivered by greedy fools in suits) many businesses received large amounts of venture funding. Greed was the primary driver and the trend was to ‘think big’ with infrastructures built to support global scale success – often the ‘corporation’ was built ahead of the ‘business’. But times have changed and today’s serious business builder should only have the infrastructure in place to support excellence and drive the company forward. Big thinking should develop as you define goals and set your ambition. In the first few years of business, an organisational chart is less important than having a business full of people that understand what needs to be done and by whom. All that needs to be defined is what roles and responsibilities each person has and who they communicate with. A business won’t establish its credentials in the market via its organisation structure. However, what an organisational structure should deliver is scalability as and when the business grows, as well as the ability to refine profitability. Too often, organisation structures are changed to fix a problem but this is rarely the right solution. What is usually needed is a strategic or tactical rethinking.

Survival tip: If a business starts to underperform, look at the ‘attitude’ and ‘values’ of the people in the underperforming area An organisational chart does not address or solve the problem.






“Punch above your weight”

In recent years, some businesses have become household names even before announcing significant revenues because they positioned themselves as innovators. Sites like Spotify managed a spectacular PR coup through the well managed orchestration of ground breaking commercial innovation. Although not every business can or should try this approach, there is no doubt that a greater perceived presence in the market promises a greater chance of financial success. Every company or product is a brand, and the bigger the brand, the more value is attached to it. More often than not, companies that get bought have created more ‘noise’ than their competitors, firmly putting them on the acquirer’s radar. Being perceived as a winner is one of the key components to actually being a financial winner. It only takes a small investment to get to know people who write about the market and to appear as a conference speaker. These activities can help CEOs be seen as innovators and position their company as one to follow. Survival tip: Don’t just claim leadership - everyone does that. Aim to be seen as the great innovator in your field.

Change and growth “This might sting a little” Running a fast growing business has been likened to driving fast on an unknown, winding road in the dead of night on a low beam. As the driver, the CEO can’t see much of what is ahead. The only certainty is that nothing is expected and there can’t be any guessing. CEOs have to stay alert to survive and learn to react quickly to what happens. As companies grow, they need to change. Sometimes, they grow out of balance and the CEO has to recalibrate the business back to a sustainable level, a reduction in costs always costs. The best approach to managing change and growth is keeping the infrastructure under stress. By not building fixed overheads before you need them, a business can be flexible enough to scale when required. If the existing infrastructure is wrong, it must be changed and lessons must be learnt from how it went wrong. The safe bet is to have the capability to discard as much cost as possible from a business for the least cost. In short, if it’s a ‘buy or build’ decision, buy until you know the exact formula for the build. Outsourcing could be a welcome option to some small businesses because it provides the flexibility to scale up or down at an affordable cost. Survival tip: Keep your infrastructure under stress at all times.





Partnerships and alliances

“Make friends and influence people”


“Howdy, Aloha, Sala’am Aleikum!”

Who you know as much as what you know is important in today’s business. A partnership is an environment of shared risk and shared reward. While so-called ‘partnerships’ with global giants are desirable and sometimes essential they should only be put in place for sound business reasons.

“We need to penetrate the US market because if we could get just 1% of the market…” - we’ve all heard this before! But what of international expansion? CEOs need to build a business before building a global corporation because once they go beyond their own shores, doing business becomes much harder.

Successful partnerships are when both sides benefit from the relationship. However, the reality for entrepreneurs is that they need to get the ball rolling to ensure they get what they want from the arrangement. This involves becoming part of the partners’ core business. For example, if you make consumer electronics gadgets for sale in retailers, you should go to all your retailers and be among the shop floor assistants to help make the first few sales. This will help pave the way to a bright future together.

Too often, CEOs dive into international waters without dipping their toes in the water first. If you are intent on selling a product in another territory, go and sell it - don’t go and open an office first. One approach is to find a local partner or travel there frequently because air fares are cheaper than setting up an office in a foreign country. The message behind HSBC’s “the world’s local bank” adverts can be applied to the internationalisation of your business. It is important to understand the various nuances of doing business in different countries, even those that speak the same language as you.

Survival tip: Invest in relationships that bring tangible and measurable strategic value to your business.

Once you’ve proven the market in the territory and it’s time to accelerate growth, find a local national to run your operation. Don’t waste your best sales guy from home - it rarely works. One final point to make is that if the formula is not yet right on your home turf, you can be quite sure that it won’t work in another country. Survival tip: Only fools rush in. Take the time to find the right local contact to help grow your business.






“Let’s get outta here”

Not long ago, if a business owner admitted that a business was for sale, it would be tantamount to a mass betrayal of employees. Today in the high growth sector of angel and venture funded businesses, a company is born to be sold. From the outset of any technology or high growth sector business, the exit requirement should remain omnipresent. It is important to landscape who potential buyers are going to be, and understand their buying metrics. Do they look at the number of clicks to your website? Do they attach strong value to sales figures or brand value? Are they buyers of revenue or profits? The statistics prove that most businesses that are acquired had a pre-exiting relationship. A key point for a successful (and profitable!) exit is not to let greed get in the way. Continuously turning down offers waiting for a better deal is a pipe dream. In reality, it could be better to sell your business earlier for a decent price rather than waiting too long, especially if markets change… for the worse. Ask those that turned down offers in 2007! Survival tip: Keep the end in sight but remember that greed usually equals regret.

People In any business, the most valuable asset is human capital. Happy workers are better workers, and better workers mean a more successful (and profitable) business.

Creating culture “Who do you want to work for?” From the beginning of a CEO’s leadership either as a founder or hired gun, it is important to determine how you want the business to be perceived by its most critical market – the employees. This is because business culture flows from the top down. While programmes of change, training and coaching can help communicate and promulgate a desired culture, they cannot create it. An engaging, charismatic and energetic leader will determine the culture and style of business that will be adopted by the employees. This involves not being afraid of talking about your culture externally as well as internally and inspiring your employees to give their best and forgive their mistakes. For example, the culture at Virgin Atlantic is markedly different to that at British Airways because every employee embodies the culture cascading from the group founder Sir Richard Branson. For a consumerfacing organisation like the airline industry, the happy faces of the cabin crew convey a mood of well being to the passengers and enhances the customer experience, encouraging repeat purchases. Ironically in the early 1980s British Airways invested massively in ‘Putting People First’ but inconsistent leadership styles have left a residual mediocrity. Survival tip: Ditch the mission statement. Culture is a reflection of leadership.





Leading and motivating

“Free pizzas are not enough”

There are two camps of people: those that are motivated and those that can’t be motivated. But even the most motivated people can easily be de-motivated by an uninspiring leader. As such, team or company drinks in the presence of the uninspiring leader will do little to re-motivate employees. Providing rewards for continued performance and positive attitude with thoughtful initiatives that cost little work wonderfully. By showing your strong positive leadership and having a good time everyday, employees will find contentment and stay motivated. Survival tip: Look in the mirror and see if you like the boss you see.

Hiring and firing

“Quality not quantity”

There are three simple rules to hiring: quality, attitude and integrity. Sticking to these at every level will ensure you are hiring for business success. When hiring, think about surrounding yourself with people that are better than you. This will ensure that you have the best workforce. If a CEO has cause to think about firing someone because of attitude, they probably should have done it yesterday. However, if the attitude is right but the performance under par it may be worth looking at other confounding factors prior to making the decision. Some leaders have delayed firing because of the risk of costly legal action. In such cases, you need to compare the cost of delaying the decision versus the cost to the business of paying the proper and fair severance. Perhaps leaving the individual in place could have worse financial implications than firing. However, this does not give you licence to fire people in an unpleasant or insensitive way. This will only create an enemy in the market for you and your company. Survival tip: When hiring think whether you would want to have dinner with the candidate – if the answer is no, your employees probably wouldn’t want to work with them either. Do not underestimate the importance of people that ‘fit in’.





Coping with being a CEO “It can be lonely at the top” Almost every CEO describes their role as lonely in some ways. The main reason being that they feel they cannot share all their fears with their colleagues or their board members. If that is the case, they may not have hired sufficient quality colleagues nor have the right board members. By involving colleagues in the decision-making process, decisions are of better quality and are implemented with greater commitment and passion. Survival tip: Be open - a problem shared is a problem halved…. And a level of transparency earns trust and respect.

Staying Focused “How to keep your head when everyone else around you is losing theirs”

With large, inefficient corporations, 80% of time used and energy deployed by managers relates to internal matters rather than the business or commercial well being of the company. Yet, such issues do not make any impact in the market and rarely improve financial prospects. Before embarking on tasks all managers and employees should ask themselves: is this going to make a difference to the business or is it just internal semantics? Only in such an environment will each individual focus on the performance parameters that make a difference. Survival tip: Set the measurement parameters; the rest will follow.

Dealing with the Board

“That’s board with an a-r-d”

Boards of directors in venture-funded businesses have changed over the past 20 years. They have moved away from largely operational executive members to being predominantly non executive members with the CEO and CFO being the only executives on the Board. As such, the role of the Board has moved from defining strategy to implementing corporate governance. As a result, few CEOs see the board as an executive support, more as a body of people who need to be frequently brought up to date and often have little understanding of the business. A Board should consist of an independent chairperson who supports the CEO rather than supporting his or her personal desire to ingratiate themselves with investors in the hope of being offered other non-executive appointments. The Board should also have directors with relevant and current experience. The chances are that a senior executive from Global Corporation X, while having had an illustrious corporate branded career, may not know too much about, for example, building an internet dating site for teenagers and perhaps have even less experience of how to run a small high growth business. Board members need to have knowledge, be current and be able to advise from their own relevant experience. For the CEO, an important aspect is transparency because if you can’t comfortably share bad news with the Board, then the Board can’t support you or help in quality decision taking. Survival tip: Get a Board you can respect and trust.






“You only get one chance”

Financials There is nothing more important than the numbers for the ultimate survival and prosperity of the business. If a business decides to use other people’s money to fuel growth, it is reasonable that the providers of that capital should know very clearly how their investment is doing today, and how it is looking for the future. So, apart from quality historic reporting against agreed budgets and milestones, the CEO needs to continually update the forecast. In many early stage businesses though there is a conundrum. To establish valuation for funding, budgets and forecasts were provided to maximise the ‘pre money’ valuation. More often than not however this proves to be wildly over-optimistic. For financiers to forecast their own return on the capital, they take a cynical view of the numbers provided by the company. On the whole, venture capitalists are knowledgeable and definitely not naïve. But the CEO is then often measured against numbers that are too optimistic even though neither party really believes them.

Forecasting inaccurately is the most common reason that a CEO will get fired. It is therefore the most important thing to get right. It is important not least because it shows realistic intent. Further, it is the basis on which cash is managed and funding is decided. It has to be right so needs to be continually updated. The CEO’s biggest problem is that the forecast inevitably looks different to the business plan. A business plan and a budget are often based on hope; a forecast is based on reality. Too many optimistic entrepreneurs do not make the distinction and continue to fail against an over optimistic budget. Inevitably this leads to shareholder disappointment, premature calls for further cash and in the majority of cases - the scalp of the CEO. What is needed is better transparency to show re-forecasting when performance falls below the optimistic budget, and to do this as early as possible with a fully informed and involved board.

Survival tip: If you have to downgrade the numbers – get the pain over with as soon as you can and share your thoughts with your board at every step. Surprise equals disappointment equals another quality CEO unnecessarily sitting out the remainder of the match.





Managing cashflow

“A stitch in time saves nine”

Businesses don’t go bust, they run out of cash. “Cash is king” must be one of the oldest and truest business clichés. There are many aspects to cash management and the handling of the receivables is critical as the business scales. The golden rule is that when a customer doesn’t pay, it’s a customer that you don’t want because that customer is a threat to your business. You’ll never lose a good customer by asking for prompt payment of money that you are properly owed. Ask sooner rather than later if there’s a problem and never forget that you’re in business to make money, not help other businesses with their cash flow issues. Survival tip: Ask for your money early – if there’s a problem, better to know sooner than later.


“Keep it simple, stupid!”

More and more small companies have complicated capital structures when in reality CEOs should drive and strive for simplicity. Complexity makes every future transaction harder, especially the ultimate sale of the business. At the time of the investment round, ideally there should be more willing investors than you require and then the company’s lawyers can help you construct a fair structure for the investment. Capital structures become overly complicated because new shareholders usually want preferential treatment to those that have gone before, and they want to limit their own downside to the detriment of the existing shareholders. If there is healthy competition to get into your deal you are in a better position to dictate the structure to be used. That old keep it simple principle is as true here as anywhere. Raise more than you think you need because you’ll always find that some aspect of even the best plan will go wrong. Survival tip: Raise enough to achieve what you claim without further unplanned injections of cash. If you don’t like the people – don’t take their money!





Regulation and compliance “How not to end up in jail” The collapse of global banking has been the result of poor corporate governance excused by the extreme greed of the beneficiaries who should have self regulated – this in turn has sparked new waves of compliance implementation around the world. Improper checks and balances cost millions of innocent hard working people billions of their wealth and all to fuel the greed of relatively few coroporate bigwigs who knew exactly what they were doing and what risks they were taking. Had this behaviour not been so wide spread across an entire industry the perpetrators would be in jail alongside those from previous far less damaging scandals such as Enron. Regulation may feel like a pain at times but we all have to adhere to it, and it is a good thing that protects the innocent. It requires the values of openness, integrity and honesty. Good corporate governance should really be part of your business’s DNA whether it is legislated for or not. Build in reporting and quality governance to the core of your business processes, as well as allowing for related expenses in your budgets. You may also want to consider hiring staff with specific compliance experience or training to ensure you remain on the right side of the law and common moral values. The best approach is to be over-cautious - if you think that something isn’t quite right, assume it’s illegal and you should be able to avoid problems. Bear in mind also that it’s not just about protecting your business – compliance can be a great competitive differentiator, and many of the processes that the law requires can equally have a significant business value if approached in the right way. Survival tip: Involve your board as the quality assurance officers of good governance – but don’t rely on them alone.

Conclusion While the world of the CEO may seem fraught with danger, there are lessons to be learnt from those who’ve fallen and those who’ve come out the other side, albeit a bit battered and bruised. Of course entrepreneurs that have had glittering successes have much to pass on. But even though writing books or giving seminars on “How I built a billion dollar company” is often inspirational, it does not provide life saving lessons to entrepreneurs or CEOs. A lot of the advice you’ll receive is commonsense; but there’s no replacement for experience, and one of the most important things to remember as a CEO is that while it may feel desperately lonely at the top there are plenty of other people out there who have been and are going through the same ups and downs. Drawing on support from others in the same position can be the most valuable survival tool you have.





Chairman: Ashley Ward The European Leadership Programme (ELP) is a high impact personal and professional development programme for Founders and CEOs of high growth companies in Europe. It combines advanced personal development training with structured workshops facilitated by subject specialists, as well as group debate and peer-group support and coaching. Like top athletes attending an academy, ELP is the place where talented, open-minded CEOs go to raise their game within a stimulating, powerful and confidential environment. If you are interested in joining ELP as a member, or are an investor looking to find out more for one of your portfolio company CEOs, we’d love to hear from you. Similarly if you would like to discuss sponsorship opportunities or feel you can contribute to the developmental side of the programming, do get in touch.

Find us on the web: Our offices are located at: European Leadership Programme Linen Hall 162-168 Regent Street London W1B 5TG Call us on: tel: +44 20 7038 3832 fax: +44 20 7038 3831 Or email:

Ashley Ward is Chairman of the European Leadership and a Partner in Nexec, a tech focused head hunter where he uses his skills to help clients build the quality into their teams essential for success. As a serial CEO for 26 years Ashley led several businesses to sale or IPO including Wharfedale Loudspeakers, Anite Networks and Orchestream which became a FTSE 250 company with a capitalisation of almost £1b. Ashley is passionate about helping leaders of entrepreneurial ventures maximize their chances and has developed a formula that he calls ‘Thrive and survive in the hot seat’. In addition to his role as a head hunter and leader of ELP he sits on the board of various VC backed businesses.



Our Sponsors

Our Sponsors Nexec Partners Nexec Partners is a forward thinking search practice that is reinventing how to support clients through its development of the European Leadership Programme. Uniquely, we don’t just know the top talent; through ELP we are responsible for training and supporting the industry’s leaders, and learning about their businesses and their needs. As a result, we have become standard setting in our understanding of client culture and our capability to recruit the right executives for clients. There are many search consultancies that have good networks, research capabilities and sector knowledge, but few achieve the results which Nexec deliver. Clients like working with us because of our communicative approach, and executives like to be head hunted by us, as they learn about the client in the most candid way. This ensures no ‘surprises’. The whole experience is about the formation of long term partnerships. Nexec gets into the culture of the client’s business and understands how new hires will need to fit in. Success in hiring is not just about the skill set, it’s about compatibility in attitude, approach to life and of course capability and knowledge. For more information please visit:

Our Sponsors

Hotwire Hotwire is an international public relations consultancy established to provide innovative business & consumer PR services for the technology industry. Hotwire has six specialist practice areas: applications & services, banking & finance, consumer, digital media, enterprise & electronics and telecommunications. The company has offices in London, Paris, Frankfurt, Madrid and Milan, complimented by a handpicked global partner network. Since its foundation, Hotwire has won a number of prestigiousawards across Europe including Best Pan-European Programme at the 2007 Sabre Awards, International Consultancy of The Year and Best Technology Campaign at the 2007 PR Week Awards. For more information please visit:

GP Bullhound GP Bullhound is Europe’s leading investment bank focused on providing advice on mergers & acquisition and institutional capital raising in the technology sector. The firm was established in 1999 and has completed over 60 M&A and Private Placement transactions in the technology sector since. With dedicated sector teams in Internet, Software and Semiconductors and with offices in London and San Francisco, GP Bullhound aim to provide the preeminent advisory service to entrepreneurs in Europe. For more information please visit:

Taylor Wessing


Taylor Wessing LLP is a leading law firm providing legal support for commercial organisations doing business in Europe, the Middle East and China. Based in Belgium, Dubai, France, Germany and the UK, Taylor Wessing provides the full range of legal services to major corporations and growing enterprises. Taylor Wessing boasts a strong reputation in the corporate, finance and real estate sectors alongside in-depth experience across the full range of legal services including intellectual property and technology, tax, litigation & dispute resolution, employment & pensions and private client.

ENTHEO is an innovation and change agency, focusing not just on the “what?” of innovation, but the “how?” helping companies create new ideas, unleash enthusiasm and build a business culture that will sustain innovation and fresh ways of thinking.

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Within ENTHEO, the often conflicting worlds of marketing and organisational change meet. Their combination is the fuel that enables the sparks to create powerful and successful customer centred innovation. For further information please visit:



CEO Survival Guide  

The only management book you'll ever need. A 10 minute read which helps CEO's and entrepreneurs to survive in today's business jungle.

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