The optimal mix of leadership skills in building a successful company.
“omne trium perfectum”
—Latin saying translated as “Everything that comes in threes is perfect.”
(This post was inspired by personal experience which is common for all creators (whether of art, music, literature, food, clothing etc.) It reflects my view of my place in the world — a world where I can be highly value-added but fix into neither traditional business leadership role: Visionary or Doer.)
The Rule of Three
The rule of three has become an honored writing and rhetoric principle. Humans are wired to look for patterns in everything, and three is the smallest and easiest pattern to see.
The rule of three appears in memorable sayings: ‘Veni, Vidi, Vici’, ‘Life, Liberty, and the Pursuit of Happiness’, and ‘Blood, Sweat and Tears.’
In fairy tales and children’s book titles: ‘The Three Little Pigs’ and ‘Goldilocks and the Three Bears’.
And in joke opening lines such as: ‘A priest, rabbi and imam…’ or ‘An Englishmen, Irishman, and Scotsman walk into a bar….’
The Conventional Wisdom on Business Leadership: Two Is Perfect
The conventional wisdom on best practices in building a leadership team, particularly for a start-up, is to ensure the two complementary skills exist.
- Visionary, charismatic and long-term oriented: Typically the CEO. Sometimes also present in the CTO or Product Architect role; paired with
- Disciplined, detailed-oriented, getting stuff done today: Typically the operational co-founder and also often represented in the Engineering, Sales, Marketing and Chief Customer Officer leadership roles. Some businesses buttress this function by adding a Chief of Staff.
My Hot Take: Three is Better Than Two
My belief is that businesses which have disruptive ideas and hope to raise multiple rounds of capital need to have a team that consists of three distinct ways of thinking.
That team should include a ‘Strategist’ in addition to the ‘Visionary’ and ‘Executor’.
The Role of the Strategist: Linking Vision with Execution
S/he is thinking backwards from the next big company milestone — it could be a fundraising, a meaningful acquisition (to enter a new geography or segment), or an entirely new product launch — to what needs to happen today and be prioritized.
And thinking forward, linking the next big milestone to the vision (long term aspirations of the type of world the company wants to create) and mission (the purpose or why of the company.)
What is the Strategist Focused On?
Businesses have three constituents they must simultaneously serve: Customers, Employees, and Investors (this latter ranges from equity risk capital providers to lenders to suppliers / vendors.)
The Strategist spends more of their time thinking about employees and investors and generally less on customers. While they need to understand the customer and ask questions focused on customer needs/wants, their value-add lies in representing the other two constituents.
S/he thinks about the medium term — typically between 12 to 24 months out — and represents the needs of investors and employees over that timeframe. The focus is on 2nd order implications of decisions today (pushed by the Visionary or the Doers) which are meant to maximize customer, employee or investor happiness.
The questions on their mind include:
- What needs to happen for this business to become viable and self-sustaining? What changes need to happen to improve unit economics and go-to-market efficiency?
- What do we need to demonstrate to investors to make it an attractive investment proposition for the next round of capital or to accept our shares as payment?
- How do we retain, develop and keep our employees engaged and motivated? How do we not just meet our hiring goals but also get the ‘right’ people and have them excited to be part of the organization?
- How do we avoid making decisions that overly optimize the short term financial results while still being fiscally prudent and sending the right message to people (particularly employees about what we value?)
Where Can The Strategist Skills Reside
In the early life of a business, the CEO / founder can also play the ‘strategist’ role, particularly if they have a business (rather than product or sales background). However, over time this function needs to reside in a separate person, typically in the G&A silo of a business.
My recommendations for where this role resides, biased by my background and experiences, are as follows:
Finance: In the CFO role, sometimes in the VP Finance role, but almost never in the Controller (who is focused on the necessary ‘Doer’ role around compliance and reporting.)
People: In the Chief People Officer or CHRO who takes a particular interest in employee engagement and development, but almost never in any recruiting or HR operations role which is focused on serving the immediate needs of the company. This people leader should ideally be supported by an operational finance or FP&A resource.
A Balancing Energy – What The Strategist Can Offer
I read often about how, more than in the past, employees feel less engaged with their work and have fewer ties (friendship, culture, mission) to their employer and colleagues. Work has become more transactional than ever before.
The answer many companies propose to this challenge is to hold offsites dedicated to fostering ties between team members, to discussing company values (and how to integrate them into daily work), to celebrating wins, and to talk about the vision and purpose of the company.
Though well intentioned, these gatherings typically only showcase ‘Doer’ and ‘Visionary’ energies. The balancing energy of the Strategist is missing.
The Strategist energy would cater to the needs of the medium-term employers that we all know exists but find challenging to discuss openly. Addressing their path to learning and development in this job, and how they will get the next one at higher pay, with more responsibility (even beyond this company.) And how their equity might be worth something because of concrete actions the company is taking, even if it is never going to be life changing wealth.
Capable employees realize they need to deliver on their weekly tasks. And that businesses must have short term goals. They are hoping that someone is looking out for their medium term interests. Having a Strategist role on the Leadership Team will likely increase employee confidence that you care about them. And create a more successful business at the same time.