Norwest Venture Partners interviewed a bunch of private company CEOs and founders, getting a glimpse into their worries, which include fear of failure, feelings of being unqualified, and anxiety about hiring the wrong people.
The multi-stage investment firm, which manages $7.5 billion in capital and has invested in 600 companies, released its 2018 CEO Journey study today. It found that most CEOs and founders are prioritizing health and personal development in order to find a work/life balance.
The survey also found most CEOs/founders seek funding in the first year of starting a business and rank individual investor expertise as the most important factor when selecting an investment firm. Norwest initiated the study to take a deeper look at the CEO/founder personality, exploring how these executives and their leadership teams operate and function, how they approach hiring and the culture of their organizations, and how their leadership styles reflect their own personalities.
“CEOs are the driving force behind a company — from defining the vision to developing the culture. They are the single biggest factor impacting the success of a business,” said Jeff Crowe, managing partner at Norwest, in a statement. “For this study, we wanted to tap into the mindset of CEOs and more deeply understand their challenges, both at work and outside of work, so that as board members we can be more effective in bringing resources and programs to help them.”
The survey results are intended to give investors insights into how to best support the CEOs/founders they back.
“This data reinforces the areas that Norwest currently places an emphasis on, such as executive coaching, community building, peer mentoring, hiring, and culture,” said Katie Belding, partner of marketing and portfolio services at Norwest, in a statement. “We’ve also uncovered new CEO pain points, such as conflict resolution and public speaking, and we continue to develop new programs and build communities to address these needs and help our executives achieve their professional and personal goals.”
When thinking about the top boss, people typically think of someone who is all work and no play. However, the study shows that while today’s business leaders are just as dedicated to their work as they’ve always been, they take concrete steps to boost their mental and physical health, regardless of how much work is on their plates.
While on average CEOs/founders admit they haven’t had a complete work-free weekend in six weeks, the study found that 71 percent get six hours of sleep or more per night, exercise multiple times per week (60 percent) and find time to read frequently for pleasure (48 percent).
About half of these leaders meet with a personal trainer regularly, consult with an executive coach (32 percent), work with a wellness coach (32 percent), and see a therapist (22 percent). Aside from seeing wellness and business coaches, respondents also spend time learning from their peers. The vast majority (93 percent) socialize with other CEOs/founders a few times a month or more, and 27 percent do so multiple times a week.
But CEOs/founders are under constant pressure to succeed. Ninety percent of them admit that fear of failure keeps them up at night more than any other concern. Other challenges they face include revenue growth (49 percent), raising capital (49 percent), and maintaining work-life balance (46 percent).
Starting a company is a huge undertaking, and few CEOs will feel equipped to handle everything that being an entrepreneur entails. CEOs/founders most wish they had more expertise in the hard skills of operations (53 percent), finance (51 percent), and sales (37 percent) prior to starting their business.
Expertise in hard skills is not the only important factor when starting a company. Looking back, CEOs/founders realize they could have used greater expertise in certain soft skills, as well — primarily in public speaking (37 percent), planning and organizing (37 percent), and conflict resolution (37 percent).
CEOs/founders find it most difficult to fill positions for sales/customer success leaders (38 percent), technology/engineering leaders (37 percent) and operations leaders (25 percent). The importance of these hires helps explain why more than half (53 percent) of CEOs/founders will invest time in conducting three or more in-person interviews before offering employment.
The search for allies to help them succeed in business doesn’t stop at the workforce. CEOs/founders eventually find they need to attract outside capital. Most of them recognize fairly quickly that they will require expertise and resources beyond just family and employees. In fact, the study found that within a year of starting their company, 79 percent sought outside investment.
The study also analyzed what CEOs/founders are looking for in an investor. A major disconnect with an outside investor could mean the difference between a company’s success or failure. Individual partner expertise (47 percent) was cited as the most important factor when seeking a lead investor, followed by alignment with their company’s vision (44 percent), and the ability to fund their company over the long run (42 percent). Once the decision has been made, bringing business development skills to the table (33 percent) is seen as the most important help their investor could offer.
The survey was conducted by Wakefield Research among 200 CEOs/founders of privately held, venture- and growth equity-backed companies.