Entrepreneur

The top 22 mistakes of first-time CEOs

Image Credit: Eugene Sergeev/Shutterstock

I have been building this list of CEO mistakes for many years based on my own experiences. This is not rocket science — some of these points may seem obvious when you read them — but it is really tough to know what you haven’t experienced, and I wish I’d had a list like this when I was a first-time CEO.

Although this is a list for first timers, folks in their second, third, or fourth gig also make these same mistakes.

In no particular order, here are the top 22 mistakes a CEO is likely make:

1. Does not begin to build a culture of accountability in the organization on day one
2. Fails to keep their mouth closed and their ears and eyes open
3. Does not build understanding, trust, and credibility with key stakeholders in the first three months on the job
4. Over-promises and sets unrealistic expectations early in the game
5. Makes decisions for change before having the understanding and credibility of the market, business, and people
6. Drives changes too quickly and fails to understand how much change the business and culture can withstand
7. Fails to establish a true vision and strategy working with the key stakeholders and employees of the company
8. Complains and vents to the board and others about problems of the past versus talking about solutions
9. Fails to drive a strategy and operating plan that creates a successful business model
10. Over-hires talent without having the right understanding of the needed people, processes, and technology
11. Fails to focus, focus, focus on the opportunities and key metrics and make the high impact moves to remove the unproductive pieces of the business
12. Over-hires sales and marketing well ahead of a proven sales model
13. Gets too involved in execution of the decisions versus leading the company to improve the execution
14. Lets the ego of being CEO get in the way of being a leader with a servant’s heart
15. Stops being self-aware, introspective, and continually working to improve who they are as a person, leader, and manager
16. Becomes reactive in a tough situation based on pressure to succeed in the new role
17. Loses balance in their life as a CEO when they need to exercise spirit, body, and mind
18. Fails to accept that he or she cannot possibly know everything when no investor or board member expects that of any CEO
19. Fails to find some strong mentors who can provide insight and accountability
20. Finds him/herself looking at numbers and emails instead of being with customers and staff
21. Is either too right brained or too left brained when a CEO must strike a balance, either in him/herself or through the team
22. Is too hard on people as the expectations for success are very high

Any mistakes you have seen (or have made) you can add to this list? Please comment.

Edwin Miller is a four-time CEO and an accomplished author on business innovation and creating high performance teams. Miller’s experiences with transforming both private and public companies in good and bad economies helped him create the 9Lenses framework, a social approach to assessing and optimizing a business through comprehensive insights into all areas of an organization. Organizations including HP, Raytheon, and George Mason University use the 9Lenses method.


Mobile developer or publisher? VentureBeat is studying mobile app analytics. Fill out our 5-minute survey, and we'll share the data with you.
41 comments
Dorothy Kuhn
Dorothy Kuhn

Fail to to see themselves clearly, then use this insight to inspire others - team members and customers/clients - to the kind of action that builds an amazing organization with raving (& paying) fans.

Nick Forrest
Nick Forrest

Good article, Edwin, and you certainly speak from experience!

May I add my observations? In my experience, too many CEOs have a "skills gap" because they:

1. have never been taught how to manage large groups of people (and I'm talking 250+. The rules change!)

2. have never been accountable for everything - and I mean everything

3. believe their role is to lead, whereas (and I know this sounds counter-intuitive) it's primarily to manage

Often, CEOs don't know (or choose to follow) fundamental executive management principles.

Best wishes,

Nick Forrest, Author

How Dare You Manage? Seven Principles to Close the CEO Skill Gap

www.howdareyoumanage.com

Bruce Carlisle
Bruce Carlisle

And... avoid investors who seem to spend too much time or their downside protection or negotiating hard downside terms. These people are sheep in wolves clothing and fair weather friends at best. If they structure an investment such that they "can't lose", you probably will.

Bruce Carlisle
Bruce Carlisle

Make the mistake of believing that board members and investors truly understand the nature of your business and vision.  They often arrive with preconceived notions of what your company is and should be. Respect their position and experience but take their advice with a grain of salt. It's easy for dynamic, previously successful board members to lead you astray.  If it doesn't feel right, challenge it.

Tom McDermott
Tom McDermott

Eric Keosky-Smith I can sum most of these up very simply; most first-time CEOs are not "talented leaders" and they shouldn't be at the helm. Period. This includes many first time entrepreneurs. Having a good or even great business idea does not automatically make one a talented leader. You can still maintain ownership and drive the strategy, but find a great leader that naturally does these things well and in his/her sleep and you will have a much better chance of success!

Dutch Driver
Dutch Driver

A big error/mistake is blanking out on the difference between theory and practice, like budget and actuals.  When they use the word "should" is an indicator of an unexpressed theory. One of my sayings, "When it is easy, it is already done."

Matt Weindel
Matt Weindel

Brandon Romisher, open a store in a liberal city where you're destined to fail based on the city hating small business.

Mahyar Salek, Ph.D.
Mahyar Salek, Ph.D.

23- Focusing on contracting to get the job done rather than investing the proper time and effort to recruit long term talents. 

Dante Lima
Dante Lima

Just Great! Changing my life and management style.

Andrea Rishmawi
Andrea Rishmawi

I feel lucky to work for a CEO who isn't making these mistakes. \U0001f60a

Klancy Kennedy
Klancy Kennedy

One of the biggest mistakes is to think you know everything, then make sweeping changes as soon as you get your seat. Sit down, watch, observe, ask, learn... Don't do a fucking thing until you've been in that seat for a few months to see what the team is doing, how it operates, and definitely not until you have a full understanding of why things are done the way that they are done. Nobody likes a CEO that makes big changes too soon, and they'll never forgive you if you're wrong about things... so be right. Don't try to be macho or something that you're not, or try to make the team into something that it's not.

JLFranklin Wealth Planning
JLFranklin Wealth Planning

Here are a few additional mistakes made by founders (based on Joyce Franklin's new guidebook for entrepreneurs, Startup Wealth): Don't waste time building the wrong thing; Don't wait too long before you hire a startup attorney, financial planner, and accountant; Avoid determining how long the venture can be sustained before the cash runs out; Failing to prepare a personal cash flow projection to understand your commitment to the startup; Ignoring your stock options and equity awards early on, when you could be taking action to reduce your taxes.

Ryan Geist
Ryan Geist

This is trash. Ambiguous, rambling and pretentious. VentureBeat: you're dangerously close to an unfollow.

Gil Léal
Gil Léal

This is a great read for founders, especially those who have never launched a business before.

Sean Ellis
Sean Ellis

And some not so young first time founders - like me :)

Jim Madden
Jim Madden

2 from me: 1. doesn't understand how to create operating leverage in the business. 2. doesn't understand how innovation happens (or how to keep it going) it isn't: "Type faster boys!"

Babak Rasolzadeh
Babak Rasolzadeh

Still good advice Josep Maria Nolla Puertas ;-) at least I found them good

Joel Cox
Joel Cox

This stuff is good to keep in mind. But it's all pretty much common sense. How about some pointers on things that aren't so obvious? Like what to watch out for during a valuation process? Or how to determine market size?

Derrick Mains
Derrick Mains

I made many of these in my first CEO role and I have learned from them in subsequent ventures. 


One I didn't make but see so many others making is that they do not fire people fast enough - that includes employees, other founders or even themselves. 


There is an old saying that supposedly comes from Walmart. 


If you have a problem on aisle 4 today - you have an employee problem. 

If you have a problem on aisle 4 tomorrow - you have a management problem. 

If you have a problem on aisle 4 the next day - YOU ARE THE PROBLEM 

Danielle Hueston
Danielle Hueston

Great read! For the non-CEO, this is a great checklist to rank the leadership team of the organization you work for.


And I don't want to be THAT person, but small little typo:

In no particular order, here are the top 22 mistakes a CEO is likely to make:

Maeoll Kim
Maeoll Kim

How about this one: don't fool around with those you lead if they have a significant other, no matter how much you're attracted to them and they're attracted to you.

Navid Azadi
Navid Azadi

Thanks for the recommendation dear Babak, great tips!

Julien Fruchier
Julien Fruchier

This is not only for first time CEOs. Many of these "mistakes" are done by experienced people too.

Sagar Shah
Sagar Shah

Do not start with LEAN methodology. Invest too much on unwanted product :(

Joseph Cooper
Joseph Cooper

I have a better list. Not really a list it only has one thing on it. 1. Don't buy social science from someone with no back ground or source work.

Alexandre Dalyac
Alexandre Dalyac

thanks! could you elaborate on "Fails to keep their mouth closed and their ears and eyes open" ?

Kjell Nace
Kjell Nace

Fantastic. It's another list. Add list to existing library of lists

John Kwag
John Kwag

Most important thing: Do not assume you know everything and...thus everyone else should know everything. It was a nice list which was specific at points and not at others. Which it has to be. Certain regrettable founder situations seem to repeat specifically in certain ways....others don't but have the same theme.


Trust me I have worked with founders who have made all or half of the mistakes on the list. I would add a couple more but...this list reflects what most founders seem to forget.


So maybe you have been blessed to never have witness or go through all of these mistakes...but for me, this list brought back many memories and is great advice to founder ceo's.