Journey to leadership: There is no ready-made path to success | Deloitte UK has been saved
Fast 50 CEOs have a broad range of experiences prior to, and in, their current roles. The mixture of founders and external hires, serial entrepreneurs and first-timers, highlights that there are multiple paths to the top. Those with prior experience in industry and scale-ups have enhanced their ability to evaluate and iterate propositions and form highly effective teams.
The role of the CEO in a fast‑growing technology business is one of the most envied positions in the world of work today. Countless individuals aspire to be at the helm of a business capitalising on the latest technological advancements, serving customers in the UK and across the world. In all fast‑growing businesses, CEOs are crucial to success. They lead from the front, set strategic direction, make investment decisions, and portray their business to the wider community of markets and investors. They are also responsible for creating a workplace and team culture that is crucial to building a high performing business.
There has been much written on the path to becoming CEO, and many attempts to unearth the secret formula of traits required to succeed. One study by LinkedIn analysed over 450,000 of its members to understand the “observable and inferred traits” that correlate with becoming a CXO, Partner or Vice President at a large company. The study found that high quality education, across undergraduate and MBA, and experience across multiple job functions are two key factors.
This report explores some of the similarities and differences observed in this year’s Fast 50 cohort, drawing on anecdotes from CEOs to shine a light on how they have engendered success and are set up to do so in the future.
The experience of CEOs prior to their current position is an expansive topic that has attracted significant attention. In this report, we focus on the role of industry experience and founding businesses, two elements that are common amongst CEOs of the Fast 50 entrants.
Looking across the survey respondents, over three‑quarters founded the business they lead today, with 56 per cent being co-founders and 25 per cent being solo founders (see Figure 3). Given the relatively young age of most of these businesses, the fact that many of the CEOs are founders is not surprising. The high number of co‑founders demonstrates the potential benefits of having a team working together along the way. Having multiple founders increases the range of skills covered by the core team, broadens the network of contacts, and provides allies to help navigate the stress and uncertainty of life as a young business.
One‑tenth of the survey respondents were hired to take on the role of CEO. David Craig, CEO of Iceotope (14th place overall, three‑year growth rate of 2,331 per cent, Midlands regional winner), a systems cooling company focused on the IT industry, was hired as CEO in 2016, after the company had been operating for ten years.
Whilst not necessarily representative of all externally hired CEOs, David took on the role and was empowered as a “change merchant” to kick‑start growth of the existing business. Entry at this stage is likely to dictate a different role and approach to founders, as there is no need to build from the ground up.
Prior industry experience is common amongst Fast 50 CEOs; 70 per cent of survey respondents had started a company in the industry or a company in the industry employed them.
This has a number of benefits, including knowledge of the market, technical experience of products, and trustworthy contacts – who may become future clients. However, industry experience is evidently not always necessary, with nearly 30 per cent of survey respondents having none prior to their role. This encourages fresh approaches to problems and challenges to industry norms. The absence of industry experience reinforces the importance of the role of the CEO as a leader, rather than necessarily an industry expert, and highlights the need for CEOs to learn on the job and surround themselves with the right support.
Delving further into the previous experience of Fast 50 CEOs reveals over three‑fifths of survey respondents previously founded or were part of the founding team prior to their current role (see Figure 4). Of these, the majority have founded multiple businesses. Previous experience founding businesses can develop the ability to assess and iterate ideas, recognise what success looks like and prioritise time effectively. Additionally, experience in the start‑up and scale‑up ecosystem builds relationships, reducing barriers to accessing capital and providing strong mentorship.
The Fast 50 CEOs have experienced their share of setbacks, with almost 30 per cent starting or being employed at a company that failed. Although failure can be challenging, four‑fifths of CEOs who failed believe this experience was very or highly important in helping them in their current venture. Robert Flowers, CEO of DivideBuy, exemplifies this, who from a “failed e‑commerce venture selling end of line and discontinued sports goods learned a number of really valuable lessons” about business strategy and understanding customers. Examples of learning from failure are evident across the technology landscape, including Evan Williams, co‑founder of Twitter, whose podcasting company, Odeo, folded when iTunes introduced its own platform.
Nearly three‑fifths of those who failed believe that it enhanced their ability to evaluate and iterate ideas. At a more project‑based level, Netflix and Coca‑Cola champion this, believing that failure is a way to make sure they are pushing the boundaries and taking enough risks.
Fast 50 CEOs also recognise that failure has enhanced their personal and professional resilience, helping them to push through the inevitable hurdles they encounter starting a business. Finally, of those who failed, some found it enhanced their ability to form highly effective teams. The ability is extolled by Reid Hoffman, co‑founder of LinkedIn, who cites learning to hire generalists, rather than a perfectly structured team, as a key reason for his success. Whilst this exact approach to teams may not be used by, or beneficial to, the Fast 50, the value of teaming holds strong. The experiences of CEOs shape their skills and working styles – both of which are central to how the CEOs manage and lead their businesses.
Duncan Down is a Transaction Services Partner with nearly 20 years experience of supporting clients on transactions. He leads Deloitte’s Financial Advisory TMT business in the UK, and works extensively with both corporate and private equity investors on acquisitions, disposals and refinancings. He has led numerous international transactions across the Americas, EMEA and AsiaPac, as well as for overseas investors making acquisitions in the UK and Europe. Duncan also leads our Emerging Growth Companies team in the UK, which provides support to VC, VC backed and high growth companies as they scale and internationalise. He has for the last four years led our UK Tech Fast 50 programme, which for 25 years has identified and celebrated the fastest growing UK technology companies.