Published on
January 26, 2023
Finding Happiness as a CEO: The Importance of Instrumentation in Managing Business Systems
In this blog post, we explore the stress and worries that CEO's experience in starting and growing a company. We discuss how, even when things are going well, founders often experience a state of "fight or flight" and worry about the sustainability of their success. We then delve into the importance of instrumentation in managing business systems and how this can lead to happiness and success as a CEO. By understanding and deeply documenting the systems in your business and identifying key metrics and leading indicators, you can have complete comfort that all the systems are running as expected. This post is great for CEO's, founders, and anyone looking to understand how to manage a business more effectively.
Starting and growing a company can be a stressful experience for founders. The constant state of "fight or flight" can take a toll on not just founders, but all members of the team. This is particularly true for founders who are trying to achieve greatness and are taking on a lot of risk in the process.
In the early stages of a company, the main concerns are whether the company will survive, whether the market wants the product, whether the company can attract and retain great talent, and whether the company can raise capital. These concerns don't end once the company reaches product-market fit. Even when things are going well, founders often worry about whether the success is sustainable or just temporary luck. The startup journey is never a straight line up and to the right, and there is always the potential for bumps in the road.
One CEO recently told me that he is "nervous to be happy" about the performance of his business. This is a common sentiment among founders and CEOs. Even when things are going well, there is always a fear that the success is not sustainable.
One way to find happiness as a CEO is to focus on the systems in the business. When discussing performance variances with CEOs, I always encourage them to work the problem or system. If revenue is below forecast, for example, we can look at the sales and marketing funnels to find the root cause of the variance. By understanding and documenting the systems in the business, it is possible to identify metrics, leading indicators, and other data that can help the leadership team confirm that the systems are performing as expected and that the company is on track to meet its targets.
Your business is a collection of people operating various systems. Go-to-market strategies involve some combination of marketing, sales, and customer success funnels and playbooks. Research and development uses a methodology (such as agile scrum) and has tools like burn-down charts to track progress. Human resources has a system for sourcing new talent and evaluating current talent.
The key to these systems is instrumentation. You and your leadership team need to deeply understand the systems in your business, document them, and identify all the metrics, leading indicators, etc that help the leadership team confirm that the systems are performing as expected. This way, you can have complete comfort that all the systems in the business are running as expected.
Just as a pilot has every aspect of the flight instrumented, so too should you as you take your business to great heights. As a CEO, it's important to consider whether you find yourself always worrying about the business, even when things are going well. Take stock of the toll this is taking on you and your performance, and identify which parts of the business cause you the most stress and worry. It's also important to consider whether you have the right leaders in place and whether they have documented and instrumented a repeatable playbook for their functions. If not, identify any documentation and instrumentation gaps and figure out how to close them. By focusing on the systems in your business and instrumenting them, you can find happiness as a CEO and take your business to new heights.
