This weekend I was watching some of the Techcrunch50 video coverage and came across some interesting discussion between Peter Thiel and Mike Arrington. They batted around some different topics but one I found particularly interesting was the discussion of a startup Theil is invested in that is tracking startups metrics for VCs (follow that?) and one measurement they’ve found thus far is depending upon a CEO’s pay can sometimes show the success of the company and I could see this being the case for small business as well potentially. Here’s that segment of video:
The first point is strictly investment driven and CEO aligning with the equity investors but it’s the second and third points that I see better translated into the small or startup business.
CEO’s salary puts a cap on the level everyone else gets paid
This is pretty easy yet interesting assessment but isn’t always apparent to the small business. If we fall into the traditional business mindset of the ‘CEO should make the most money’ than everyone else’s salary is directly proportional to that. I translate that this into thinking the CEO compensation as more of a sales role by which its looked at as ‘commission’ based or more realistically ’stock’ based instead of hierarchically based. Examples of this are Google founders Sergei Brynn and Larry Page’s $1 dollar salaries. I can appreciate this model as the focus turns more on what is best for the company rather than the person at the top of the organization.
Building something people believe in
Like Thiel mentioned, this is the more important point. I am going through a recurring process for me of questioning the vision, the shared values of the team, and goals for our company. I do this about once a year (assuming no major shifts to strategy) to ensure we are heading in the right direction. I think it’s an important process to go through as I break it down at the company level, business level, and product levels. I want, as I think many small business owners, to ensure our people have an understand of where we’re going and that the entire organization is marching to the same drum. Does your company do this? Is there something that is missing?
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