BTM Institute: The Traits of a Great CEO

The Traits of a Great CEO
By Chris Shipman, Catalyst Investors
Published February 2012

Chris Shipman is a Co-Founder and Partner of New York City-based growth private equity firm Catalyst Investors.

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“Don't call me that word. I don't like things that elevate me above the other people. I'm just like you. Oh sure, I come in later in the day, I get paid a lot more, and I take longer vacations, but I don't like the word ‘boss.’” - Hank Scorpio, Globex Corporation CEO, The Simpsons

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As an investor, I have been involved in more than 60 investments in private companies over the past 15 years ranging from very early stage start-ups, to growth capital, to large buy-outs. Like most late-stage venture or growth capital investors, we review 250 to 300-plus deals a year, take meetings with a quarter to a third of these, get to the term sheet stage on 10 and make two or three investments per year. Building a company from an “idea” to a “concept” to “revenue” to “cash flow” is incredibly hard. It’s all the more awe-inspiring when I consider the many accomplished, talented, hard working and downright smart people I meet in this job who do not ultimately succeed. Picking the right teams is one of the things that keep investors up at night.

A private equity investor’s job basically consists of two things:  1) identifying companies and sectors with great growth prospects and 2) finding exceptional CEOs with good teams to form or run companies. The first part, while not “easy”, is quantifiable and is a function of research, experience, deal flow, networking, technological expertise, and the like. The second part, the people part, is in many ways harder to quantify.  Of course, experience, track record, intellect, references, likeability, vision, etc. are all important – necessary but not sufficient. It’s something else that separates the good from the truly great. Thousands of books have been written on “management” and yet there isn’t a one size fits all answer as to what skills a manager needs to be successful – because, as for many things, it depends.  At a minimum, the good CEO should have the following characteristics.

1. Honest and Opportunistic. Honesty, openness, clarity of vision and the ability to communicate are all traits the successful CEO needs to build a team of loyal and dedicated workers.  Everyone on the same page.  Everyone’s job clearly defined.  At the same time, the successful leader isn’t afraid to change course – with people or with products.  This is tough.  Replacing your CFO or CTO, who was there from the beginning, worked long hours, and is a personal friend is something that many CEOs are reluctant to do – even when there is clear evidence that the person is no longer right for the job and the company’s future success depends on someone with a different skillset. 

2. Visionary and Reactionary. Today’s visionary is tomorrow’s goat, and the time between the two is increasingly short.  Kodak had a great 100-year run, IBM 50 years, Palm five years and MySpace two. The successful CEO isn’t just thinking about today, they’re thinking about next year and what the world will look like in 10 years. Vision is important, but just as important is the ability to react to the changing world and build a company culture that rewards and encourages innovation and change. Everything should be questioned every day, and doing things “because that’s how we’ve always done them” isn’t acceptable.

3. Demanding and Flexible. Good CEOs are tough. They’re demanding. They set goals and expect their employees to meet them. At the same time, they’re flexible. And they’re smart enough to judge their people not only by their results, but also by the realities of the marketplace. A missed revenue goal might be due to the economy, issues within the industry, product development delays, problems with sales or marketing training – a myriad of issues. A good CEO understands this and holds people accountable while accounting for the reality of the challenges the team is facing.

4. Talented and Lucky. Yes, talent is key. But most of the companies that we look at have CEOs and leadership teams with impressive track records of success. Luck plays a bigger role than most people care to admit. A great CEO in the wrong place at the wrong time is unlikely to find great success. Even more common is the mediocre or even bad CEO who can do quite well by virtue of being in the right place at the right time (think about the early cable television, wireless, or dotcom days) and gets credited with being a great CEO.

5. Confident and Humble. CEOs almost by definition need confidence. But not arrogance. An ability to admit mistakes, accept criticism, and understand that someone, somewhere is always smarter than you is a key attribute. A successful CEO isn’t ever afraid to hire the best person, and in fact on several occasions I have seen leaders make a hire that everyone in the room thought (although maybe didn’t say at the time) would likely be the CEO’s replacement at some point in the future.

There is no “perfect” manager and there are no traits or personality types that work in all situations.  History is written by the victors; in other words, much of the current consensus about what makes a “good” or “authentic” leader is anecdotal and backward-looking based on leaders who have had success.

ADOTAS: CPX Introduces Cookie-Free IP Targeting

CPX Introduces Cookie-Free IP Targeting
By Brian LaRue

Today, digital advertising company CPX Interactive announced its new cookie-free IP targeting system, partnering with audience targeting solutions company Semcasting. According to CPX, the process, leveraged with its reach and Semcasting’s available data, has more than three times the reach of cookie-based targeting and is 77 times more accurate than ZIP code geotargeting.

According to CPX CEO Mike Seiman, it’s more transparent and upfront than using cookies, too, in spite the privacy concerns that may come to mind at the mention of IP targeting. “We never target a specific computer or machine,” Seiman said in a recent phone conversation. “We’re targeting a zone.”  The users themselves are effectively anonymous, and, said Seiman, “you lose the stigma associated with following the user” via dropping cookies. “We don’t have the browsing data, so we don’t have that element of needing to say we’re not looking at the browsing data,” he explained.

Instead, the process looks at, as Seiman put it, “anything licensed” — offline data on public record — and then breaks it down into 5.2 million IP zones and considers it against 120 demographic variables. CPX is able to figure out which zones have higher concentrations of certain demographics, but while it can target as specifically as a building or group of buildings, it doesn’t go so far as identifying who’s sitting behind what computer. Seiman used the example of a pharmaceutical company that would want to reach doctors. “We would know the IP of multiple [doctors'] offices,” Seiman explained, and would be able to target the office, but not each computer inside it separately.

Seiman said CPX had been looking for a solution like this for a while, but getting it off the ground came to “selecting the right partner.” The solution had to be scalable, and it had to be fast. “It’s more intricate than hitting a button,” he said. “You need a really scalable service to work with.” It helps, he said, that CPX has 10 years of experience and 90 employees — “things you can’t replicate no matter how much money you throw in into the cookie jar.”

According to Seiman, aside from the aforementioned pharmaceutical industry, this kind of targeting has ramifications “for certain [for] the automotive industry,” looking at household areas with a propensity to buy certain varieties and makes of cars. He called the implications for political advertising “huge,” pointing out how voter registration data is considered in building these IP zones. _________________________________________________________________________

DIGIDAY: The Case vs the Luma Display-Ad Slide

The Case vs the Luma Display-Ad Slide
By David Shay

In his classic literary work, “Walden,” Henry David Thoreau sums up his suggested strategy for living a life of truth and value: “Simplify! Simplify!” I have been a fan of both the author and his philosophy since my college days, but as I have aged I have come to learn that there are times when simplifying a complex issue leads to a static view of an inherently fluid situation. In these cases, rather than creating clarity, simplification can lead to a good deal of confusion.

As the head of marketing for a company at the very heart of online display advertising, I enjoy the challenge of developing more and more concise ways of explaining a landscape that becomes more and more complicated with every passing year. This being the case, I seek out tools that help present the interrelation of the landscape’s many players and categories (ad networks, demand-side platforms, data providers, ad servers, exchanges, etc.) so that people can understand where my company fits into the puzzle.

One such tool, Terence Kawaja’s Display LUMAscape slide, has no doubt been referenced hundreds of thousands of times by now. In an effort to bring clarity to a confusing and chaotic display advertising landscape, Kawaja amassed nearly every player in the field and placed their logos into high-level classification buckets. Kawaja then attached these buckets with a series of arrows that showed the apparent “flow” from advertiser to publisher.

I remember first seeing the Kawaja slide and being thrilled to have a tool that helps explain to my father – a smart man for whom his son’s industry was a mystery – how what I did related to the more common names he knew like Google and Yahoo. For many, I assume, the slide served as a road map for a town that they may have visited now and then but never knew exactly how to navigate. This kind of instant understanding was, indeed, powerful.

And yet, the Luma slide concerned me. You see, while my company made the slide – and I do not disagree that the bucket we were placed into represented a good starting place for describing what we do – the truth is that there were other buckets I knew we could have also been placed into. I knew there were assets we bring to the table that are dismissed by this static view of the industry. And, as the landscape has only grown more littered, I realize that my concerns were well founded.

As often happens with tools that serve to make the complicated easy, the Kawaja slide is now a crutch our industry relies on. For some, referencing the slide falsely means they don’t have to ask the deeper questions to find out what a company actually does. After all, it’s right there in front of them. But the truth is that most of the companies on the slide do not simply handle one part of the puzzle. What about the exchange that built an industry-leading ad server? Or what about the ad network that offers vast horizontal reach but also offers its inventory in customized verticals while providing its own first-party data as well as seamless integration of all major third-party data providers? What buckets do they go? Assuming that the static snapshot contains all the information needed about a company easily leads to more confusion about the ecosystem’s true dynamics.

Like anything that simplifies a process, Kawaja’s slide is a great tool, but smart advertisers and brands shouldn’t let their understanding of it keep them from asking partners, “What else can you bring to the table?” Perhaps Thoreau himself would best be rewritten as “Simplify! Simplify! … But don’t forget to ask the right questions.”

David Shay is evp of marketing at CPX Interactive.

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mediabistro PRNewser: Agencies

Spin the Agencies of Record
By Tonya Garcia

CPX Interactive, a digital advertising company, has chosen Bazini Hopp as its AOR. The firm will promote the digital advertising agency to the marketing and advertising community. [via]

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PRWeek: CPX Interactive hires Bazini Hopp as AOR

CPX Interactive hires Bazini Hopp as AOR
By Beth Krietsch

NEW YORK: CPX Interactive, a digital advertising company, has hired Bazini Hopp as AOR.  

The agency will handle traditional and social media activities and thought leadership programs as it works to communicate the company's message to advertising agencies, marketers, and the online advertising industry.

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