A good entrepreneurial CEO will automatically report on profitability

sales_market_shareA good entrepreneurial CEO will automatically report on profitability, without request or prompting.

In fact, a good CEO is focused on the numbers, despite the drama involved in starting any new company. He or she will report the numbers to the investors, other executives, and in an “open books” company, to the whole staff, without really thinking about it.

They’re going to publish how much they’ve made at any particular point in time, how much they plan to make and how they plan to do it, especially if the plan has changed. And they’ll broadcast this intention over and over, until it becomes a reality. And if it isn’t painful sometimes, it isn’t real.

The content should change as the plan changes and the numbers change, but the instinct to broadcast should not.

For an investor, a good CEO cuts through the crap and tells you how much you’ve made, because he or she understands that this is, fundamentally, their only purpose in showing up in the morning. You can separate the good CEOs from the bad CEOs by this one trait, whether they’re running a public company, a private company or an early-stage start-up.

This is one of the big filters I use to evaluate executives, investments and start-ups: Is this organization or person focused on the vital numbers or are they focused on playing games?

You can’t do both.

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This blog is dedicated to providing advice, tools and encouragement from one entrepreneur to another. I want to keep this practical and accessible for the new entrepreneur while also providing enough sophistication and depth to prove useful to the successful serial entrepreneur. My target rests somewhere between the garage and the board room, where the work gets done and the hockey stick emerges.

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One thought on “A good entrepreneurial CEO will automatically report on profitability”

  1. InvisibleMarketing says:

    Interesting. Jim Parker, former CEO of Southwest Airlines, spoke about exactly the same thing when I caught him in the hall at a conference. He’d just spoken for an hour about culture and the soft stuff it takes to run a company. But he said offline that the CEO has got to focus on the numbers and that net profit is the number that tells you if all the other #s are working. If not, then you dig deeper until you find the lever(s) you need to pull to fix it.

    This is the stuff that somehow never makes it into the keynote speeches.

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