Limited functionality available
Fast 50 CEOs play various roles across the business, which change as the company grows. Upon starting the role, CEOs allocate their time throughout the business, building from the ground up. Over time, the role of CEO changes, to focus more on thinking about the future, and how their business is positioned within it. To enable this change, a strong leadership team helps to manage the day-to-day, with the team often built through personal connections.
Starting with the roles played by leadership, we spoke with CEOs to understand how their focus has changed over three periods: when they first took the role, the present day, and a year in the future (see Figure 8).
Upon becoming CEO, the activity that they dedicate most of their time to differs across survey respondents, with strategy, product development, and sales and marketing each representing over a fifth of respondents.
Product is often the key focus at the inception of a technology company, and it is unsurprising that the focus on product development is particularly high amongst founders (31 per cent vs. overall average of 26 per cent).
This is typified by Andrew Bone, CEO and co‑founder of Airts, an AI‑powered platform for resource planning (19th place overall, three‑year growth rate of 1,558 per cent, Scotland regional winner). With a background in computer science, Andrew worked closely with his co‑founder to develop their software for initial clients.
Andrew’s passion for product remains, and it was only last year when he made the decision to “fully step back from day‑to‑day coding to focus on establishing necessary processes and structures that will enable the company to continue scaling”.
Sales and marketing is a focus for many at a company’s inception to validate demand and drive cash flow. Amongst survey respondents, this is particularly prominent in our FinTech winners and entrants. One hypothesis is that they want to build a critical mass of users and take advantage of ‘herd mentality’ and ‘network effects’, which can exponentially increase the utility of a product that is used between groups of friends or colleagues.
Finally, operations and finance is the key activity for 15 per cent of survey respondents when they first took the role. This helps ensure that information flows through the business efficiently and that end‑to‑end processes are effective and meet customer expectations.
Typically, CEOs step away from the operations to concentrate on strategic initiatives and capital relations, whilst maintaining a role in sales and marketing as the face of their business.
As companies grow and mature, it is perhaps unsurprising that the activities CEOs dedicate time to evolve. Typically, they step away from the operations to concentrate on strategic initiatives and capital relations, whilst maintaining a role in sales and marketing as the face of their business.
Strategy is the activity that CEOs dedicate most time towards in the present day and is expected to increase further as a focus in the next 12 months. This is likely to include domestic and international expansion, with the latter being identified as the key way to pursue future growth for 62 per cent of the Fast 50 entrants. The increased focus on strategy and market entry looks to build on the sizeable international footprint of Fast 50 entrants, with 66 per cent currently generating at least one‑ fifth of revenues from outside of the UK.
Time dedicated towards capital relations also increases; to develop relationships with existing investors, and raise new capital. This trend appears strongest among the fastest growing companies in our competition. In the present day, it is the activity dedicated most time towards for 14 per cent of Fast 50 winners, but only four per cent of entrants outside of the top 50. The opposite is true for operations and finance, which is the activity that receives most attention for 14 per cent of entrants outside of the Fast 50, but none within the top 50.
The range of activities undertaken by the CEO and the changes over time highlights the varied skillset and degree of adaptability required to lead these businesses. Marc Andreessen, the technology entrepreneur, wrote that successful leaders “are almost never the best product visionaries, or the best sales people, or the best marketing people, or the best finance people, or even the best managers, but they are top 25 percent in some set of those skills, and then all of a sudden they’re qualified to actually run something important”.
It would be remiss not to acknowledge the transition of CEOs out of their role, either to other positions, such as Chairperson, or away from the business. Whilst this report is not intended to cover when or how this happens, our findings show a professionalisation of the role as the companies grow. The presence of many founders in the cohort demonstrates the ability of these leaders to grow with the company, and our conversations with the CEOs highlight the considerations they put towards succession planning for the whole business, including their own role.
As the company matures, a CEO needs to grow into new roles and concentrate less on others. To do this, many evolve their own skillset and surround themselves with a leadership team they trust. Attracting, retaining and integrating the right people into the business is key to this success, and enables the CEO to focus their attention on areas of strategic importance.
Forming an effective leadership team can be hard. Businesses need to make sure they have people who are empowered and informed to make the right decisions. As the CEO steps away from the day‑to‑day running of the business and spends more time focused on the future, they need people around them who they trust to support them in both capacities. Jonathan Grubin, CEO of SoPost (37th place overall, three‑year growth rate of 900 per cent, North East regional winner), the online product sampling partner, typifies this: “My role has changed substantially. At the start, I did everything, but now I try to make time to focus on more strategic elements. The people around me allow this to happen, for example we hired an accomplished CFO, who has taken two to three days per week of work off my plate”.
CEOs look to strike a balance of skills and personalities on the leadership team, with heterogeneity helping to bring different views and ideas to the business. This aligns with the findings of previous editions of the Fast 50 CEO survey, which explored the importance of attracting and inspiring talent, and the value of diversity of thought. This is exemplified by Rob Gamlin, CEO of VoCoVo, a business offering a suite of voice‑centred team communications solutions (34th place overall, three‑year growth rate of 1,029 per cent, South West and Wales regional winner).
Rob looks to “hire people with the right skills to elevate the business to where it needs to go, employing people who are better at the job than I am and can bring new perspectives and ideas to the business”. The survey respondents also recognise the importance of the leadership team working together well, with 76 per cent stating there is a very high or high relationship between the team chemistry of the leadership team and business performance.
In order to hire the right people to the leadership team, the Fast 50 are more likely to rely on personal channels and experience. Amongst the survey respondents, 83 per cent use personal recommendations, and 66 per cent recruit colleagues from previous companies (see Figure 9).
The use of these channels may be higher for the leadership team than for other positions in the business, given the close working with the CEO, the importance of the roles and the higher cost. Azeem Azhar, Chief of Exponential View, supports the importance of personal networks, saying “The social network of the CEO is critical to hiring in the early days of growth. Both informal external networks and one’s formal colleagues are a fantastic source of qualified candidate referrals. Strong CEOs will have cultivated both of those sources over years.
Figure 9. Recruitment channels typically used to recruit and form the leadership team, 2019
Of those who use personal recommendations, 88 per cent find knowing their skills and weaknesses to be a major benefit. This encourages trust in the leadership team, and reduces the risk of the business having large skill gaps at the top. Clarity over skills and weaknesses is especially important for smaller businesses, given the relative expense of expanding the leadership team with top talent. Additionally, over three quarters of respondents recognise understanding the impact on team chemistry as a key advantage. CEOs look to understand and manage different working styles in the business, balancing the benefits of working with diverse groups of people, with the potential for friction.
Through an understanding of their own skills and traits, CEOs can form a complementary leadership team around themselves.
When it comes to experience, there is value working with people who have done it before (see Figure 10). Across the leadership teams of survey respondents, two‑thirds have at least one person who most recently worked in a different leadership team, whilst eight per cent have at least one person who worked most recently as a CEO. People who have been there before can help to anticipate and overcome the common challenges faced by a ‘young’ business looking to unlock fast‑paced growth.
Figure 10. Role that the leadership team most recently worked in, 2019
Duncan Down is a Transaction Services Partner with 12 years’ experience of supporting clients on transactions. He specialises in supporting Mid-Market Private Equity Houses and their portfolio companies in acquisitions, bolt-on transactions/ refinancings and disposals across the UK. He works across a range of sectors, but primarily focuses on TMT and Business Services with specific responsibility for Deloitte’s involvement with high growth companies and is the lead partner for our Technology Fast 50 awards. Although focused on UK acquisitions, Duncan has also led transactions involving clients/ targets in the US, Latin America, Israel, the Nordics and Mainland Europe.