Changing CEOs is a Saavy Business Move

When I read Inertia Beverage’s announcement of a change of CEO it was not only interesting but actually a very wise move by the current CEO and a friend of mine Paul Mabray.  I don’t want to get into a long post on my business philosophy but I thought I should post a short commentary as I saw some conversation breaking out that made it seem as if this was a negative thing.

I know many times press releases put alot of spin on a bad situation to make it seem like a good one.  I know because part of my role in various marketing jobs had been to do just that and I always put out the story before someone makes a “scoop” and spins it negatively first.  Thats just good PR.

But I view Paul’s announcement differently.  I’ve been in High-Tech since the 1980’s even before I was in college (when I was working for a software retail company).  But more importantly, my view is shaped by something my mentor, Don McKinney, imparted on me when I first moved to Silicon Valley.  Basically, if you want your company to really succeed you first have to recognize that the company will require different CEOs and RARELY does the same person have the personality to be all of these.

  1. the “$0 to $10M” CEO – this CEO thrives on the startup situation.  Risk taker, entrepreneurial, big-game hunter, and business developer (as well as visionary and marketeer), this CEO is usually one for the founders.  The key here is to have a sales person in this role and drive the initial products to be customer-oriented with a saavy product team.  This CEO recognizes that getting A+ players on the team is more important then having the right structure or hierarchy.
  2. the “$10M to $100M” CEO – This CEO can take those first few BIG customers and nourish them such that they can be cash cows for the company.  At the same time he/she starts to pull in trusted sales and business development folks as well as marketing folks to compliment development and empowers them to do their job.  What can happen to a company that may cause it to fail is if CEO #1 thinks he/she is CEO #2 but isn’t really and has trouble either getting help to create new business, create a polished brand, or both because he/she still thinks he/she has all the best ideas and no one else can do it for them.  Its the beginning of scaling the company.
  3. the “$100M to $1B” CEO – This CEO recognizes that the company is going to go BIG TIME and needs processes that allow the organization to scale.  Oh the dreaded “P” word, but its true.  At this point, customer care is still job #1, but setting up the structure to scale operations is becoming more and more important and this CEO needs to allow that to go to a professional A+ COO type.  Again, failure can happen here when a CEO doesn’t appreciate what an operationally oriented person’s value is (i.e. can make the organization scale in ways the CEO never dreamed up).  This CEO also has to be able to attract the investment levels that typically the founding CEO doesn’t have access to.  This is usually when you see a CEO finally step aside but it can be too late.
  4. the “$1B to $10B” CEO – Now your talking about the professional CEO that you see at the top of Cisco, GE, and companies like that.  Charismatic and oozing leadership that can rival Bill Clinton in his prime.  This CEO still focuses on his top customers but there usually are so many that the top 10 are likely the only he/she gets to visit.  This CEO could be very very smart but is really removed from day-to-day so is fed development information and status from a staff of A+ lieutenants but likely has a big company filled almost 50% with B players (inevitable at this size).  The hope is that CEO #3 created solid enough processes that the company will thrive and compensate for some incompetence that has inevitably creeped into the the ranks of the company.

Thats the idea in a nutshell.  You can move the revenue bands up and down a little but this is generally true.  I had this wisdom passed on to me in the early 1990s and I’ve seen it proven out time and time again.  What I see in the Inertia announcement is a smart man that wants to see his company do great things.  But I say “smart man” because from my conversations with him, he intuitively sensed he wasn’t CEO #2 or #3, checked his ego at the door, and did the right thing.  He’s still working in there directing strategy and given his history in the wine business thats probably a good move.

The employees of Inertia should be excited.  As a Silicon Valley veteran, I can tell you more often then not that a move like this initiated by the CEO prevented this from happening later in your lives when the Board of Directors forces this decision (and they always do) because the CEO isn’t scaling the company for the big time.


Creating Value for the Wine Industry

I’m in the process of closing down Wine Life Today the social bookmarking service and making it into my personal blog so that I can dedicate my time to creating real change and real value for the entire wine industry.

WLT is a two year old project that had a decent amount of success and even generated some advertising revenue which is cool.  But I never intended it to be a revenue source as much as it was a learning experience.  I LOVE the wine community and I spend tremendous amounts of time creating and learning from my creations/experiences.  So I always thought that creating things for the wine world would be the best of all worlds – I could meet more and more people in the wine world all while having my creative outlet.

Recently, OpenWine Consortium, a brainchild of mine that was inspired by the need of some industry friends I met through my other creations (this blog and WLT), has emerged as an unmitigated success.  With really no marketing whatsoever, it has garnered attention across all corners of the world, been written up in Wines & Vines magazine, signed up nearly 1000 members in less than three months, and really become something I can spend GOBS of time working on.  Its special, it fills a need that the industry has, and most of all, its something I’m very proud of but believe it can be so much more.

I believe OpenWine Consortium is 10 times more useful at 1000 then it was at 100 in terms of affecting change in the industry.  Real business connections are being made, value is being created through the exchange of expertise and advice, and new ideas are being spawned just through the interaction.

Guess what…I also believe that is OWC were 10,000 people is would be 100 times more useful and would create 100 time the value it does today.  So I’m setting a goal for myself and the OWC community.  The industry needs this site to be at 10,000 members from every corner of the globe to make it an invaluable place to be on the Internet if you are in the wine trade.  This goal is SOOOO doable its rediculous.  There are tens of thousand of wine brands and just an un-Godly number of service businesses that work with those brands and ALL the employees/owners/proprietors of all these businesses can benefit from the OWC community – the interaction, the community, the technology exchange.

So that is my goal today.  I’m very proud that we’ve gained 1000 members.  But I’m going to dedicate the time and effort needed to really move the needle in the industry and I hope others in the community who see the value will do the same.

I’ll start with something simple – a Logo that others can get behind.  Some good friends have put time into creating a logo and I”ll get it out there soon.  Look for the preview here.

What are some other things I can do?  Partnerships with others in the trade, training to properly use OWC as a tool for trade associations, implementing the changes that the membership wants to see on the network.

Me and about 1000 of my industry friends should be able to make a difference so lets see where this takes us!


(almost makes me want to say “To infinity and beyond!”…but I’ll refrain)