Valuation is linked to behaviour

Even if the product or service is great and the revenue keeps growing, leadership directly impacts the worth of a company.

Negative leadership traits eventually have negative financial outcomes. Whether it’s arrogance, needless aggression, lack of attention to detail (or attention to the wrong things), failure to respond to change or not holding oneself to account, at some point these traits will come back to haunt an organisation.

As a CEO you need to constantly be assessing your behaviour and actions and asking if their impact adds to your company’s value or lowers it.

CEOs are not meant to have all the answers

Perhaps the most damaging trait a CEO can have is to believe they have the answers to everything. Or, if they don’t, they should act like they do.

This refusal to defer to the expertise of others is particularly common when a CEO also founded the company and was initially involved in every single decision a company made.

An inability to step away from being involved in all aspects of a business can be a real red flag for investors. Firstly, it indicates a CEO may be difficult to work with post investment. Investors need to be confident a CEO is open to change and innovation and outside help. It can also signify that the CEO has not built a capable team who can stand on their own.

Finally, that kind of leadership is likely to frustrate current employees and scare off potential future hires. The very best talent will not want to work in an organisation in which they will be consistently undermined or overruled.

Sit back and ask yourself how many key decisions are made without you having the final say? How often do you overrule senior leaders? If the answer is anywhere near 100%, it’s time to re-evaluate.

Ask others

Great leaders don’t surround themselves with ‘Yes’ men. You need to have somebody in your inner circle who is prepared to talk to you about your flaws and strengths. If you don’t have anybody inside your organisation who you can go to and ask for an honest appraisal of your leadership, you need to find one.

External output should be highly valued too. A mentor or experienced leader from outside your business who can take an objective view of things in your organisation can really help keep you focused and making smart decisions.

In the short-term you can perhaps look to a friend or family member for some insight, but ultimately for the good of your organisation you need to have that kind of person with you day-to-day.

And if you are really struggling to find anyone able to speak honestly with you from inside your organisation, then that’s a problem in itself and probably an indication that your leadership style is too aggressive.

Great CEOs hold people to account (especially themselves)

Your team want to be held to account. Good managers respond to clear goals and a clear assessment of whether they have hit them. It motivates them, gives them something to measure performance against so they can improve and – ultimately – helps the company grow.

If as a CEO you don’t create a clear business plan and install a culture which pushes for progression in performance and results, then you will remain in a ‘startup mentality’ and likely get stuck going around in circles.

CEOs should lead from the front in this regard and above all hold themselves to account. Demonstrating where you’ve both excelled and fallen short provides a great example of what you want in your organisation and is the best way to show your team of the need to be able to adjust to change and face new challenges.

Again, this will be noticed by potential investors or buyers and give them confidence that your organisation has the flexibility to meet what the future holds and the changes investment brings.

Passion (and behaviour) is infectious

CEOs can be very good at looking at external challenges and producing solutions. But sometimes they are not so good at identifying problems closer to home.

Some leaders may find it the most difficult thing of all, but it is vital to be able to have a ‘heart-to-heart’ with yourself. The sooner you can admit to and acknowledge any issues with your leadership style, the sooner you can take steps to address it and realise your ambition.

Passion and behaviour is infectious. You need to be setting the right example from the top and shaping a positive culture. Because if you want your company to grow and you don’t change your behaviour, why would you ever get any different results to what you are getting now?