"There's a reason the bottleneck is always at the top of the bottle."
Here at Apex North, we’re kicking off the year with the publication of The CEO Playbook, an in-depth analysis of the most common problems CEOs face when growing their business. I worked with three of my colleagues to interview CEOs and gather information on what’s keeping them from scaling up their companies. We collected an incredible amount of data which we analyzed, synthesized, and distilled down to the most frequently seen blocks that CEOs run into. We compiled our findings in the playbook along with strategies to help overcome or even avoid these issues altogether. The CEO Playbook has become a vital tool in our toolbox in ensuring consistent growth.
The number one takeaway from our research for The CEO Playbook is The CEO Doom Loop, one of the most common, and arguably the most dangerous risk to a company’s growth. It’s a frequent occurrence and can be both debilitating and stressful. On top of that, the CEO Doom Loop can be tricky to spot from the inside of an organization.
Today I’m going to go over what The CEO Doom Loop is, when it can happen, and ultimately how to get out of it before the Doom Loop turns into a downward spiral of stagnation and potentially, complete business failure.
What Is The CEO Doom Loop
Part of a CEO’s job is to lead the vision and culture of a company which defines the company’s trajectory. However, growth is not always easy or straightforward and often companies run into plateaus as they try to grow. And a CEO’s response when they notice their company’s growth plateauing or stalling out is crucial. Whether the lack of growth comes from a lack of sales, lack of strong leadership, or a lack of retention and attraction of top talent, the CEO’s actions can shape the company’s progress and could lead to a Doom Loop spiral.
As the company strains to grow, cracks begin to emerge. Cracks, where the company is overstrained, not functioning properly or out of alignment. A natural first impulse for CEOs is to dive in and help fill the cracks, to get in there and fix the problem yourself. You know the company best and it makes sense for you to get in there and fix it. But, as I’ve said before, if you’re working IN the business, you can’t be working ON the business as well.
This first phase of the Doom Loop is when CEOs dive back IN to do the work themselves. It’s natural when problems arise to want to dive in and solve them. It’s a common tendency of CEOs to take matters into their own hands, but this is a misstep. By stepping in to fix the problem, they stop performing the role of CEO and also prevent someone else from their leadership team from performing their responsibilities.
This can weaken the CEO’s position and can cause other members of the leadership team and their employees to feel not trusted. This in turn generates an adverse culture that can drive away current and future “A” Players from the company, exacerbating the already present problems. This undermines any efforts the CEO has undertaken to generate a clear vision and culture for the company’s growth.
A CEO’s lack of faith in their team is a red flag. It either means that their team is not made of “A Players” or the vision and culture within the company, generated by the CEO, is not clearly defined. Employees and leadership members can sense when they are not trusted and will often pull back, making the already apparent problems more apparent while the CEO becomes too busy fixing internal problems that they’re unable to fully perform the duties as CEO.
Now, the problems have only multiplied. The CEO has reverted back to the leader of sales or is completely overworked while the disenfranchised leadership team begins to leave. Those cracks keeping the company from scaling up begin to expand. This can often cause CEOs to become even more anxious and double down. The more a CEO fills their time with the inner working of the business, the more a leadership vacuum is created. A key aspect of a company’s growth is the clarity and focus of a CEO’s vision and if a CEO is not focusing on the long term vision of the company, then the company becomes directionless.
If unchecked, this spiral can not only completely halt growth, but can even lead to the dissolution of the company, all while the CEO fights to fill holes and blames employees for the issues.
The Impact on the CEO’S Role
What happens in The CEO Doom Loop to CEOs is often they lose confidence in their team and their own position. Any problem in a business is either being tolerated or created by the CEO. When solving the complex problems within their companies, CEOs forget to take a look inward. The insecurities, lack of clarity of vision, and lack of confidence in a CEO have a cascading effect that quickly turns into The CEO Doom Loop spiral.
This can occur in companies at any time but most frequently arises turning moments of transition and growth. Companies reach plateaus and then push to grow and the strain can lead to cracks appearing which can pit the CEO into a Doom Loop.
How to Cure The CEO Doom Loop
Thankfully, with the right mindset and mentoring, it is always possible to come out of The CEO Doom Loop spiral and get your company back on track. Through our research and the work that I’ve done as a CEO + Leadership Team coach, I have a set of techniques and tools that can help CEOs come out of The CEO Doom Loop.
I remind my clients all the time of the importance of developing their own role as CEO. It’s important to build the confidence, clarity of vision, and leadership plan as a CEO to ensure the success of your business. It is the CEOs responsibility to build a strong leadership team they can rely on and work with instead of against.
When companies grow, CEOs also have to grow. If you’re not growing, it’s impossible for your company to grow. There’s a reason the bottleneck is always at the top of the bottle.
Get Your Own Copy of The CEO Playbook to Learn More
As I said earlier, our research was incredibly fruitful and we put our findings in The CEO Playbook. If you’re interested in getting a copy of The CEO Playbook, you can get one through our website. The CEO Doom Loop is difficult to diagnose from the inside and it’s helpful to have an outside eye come in and advise. One of my favorite coach quotes is “you can’t read the label on your own bottle, because you’re inside the bottle.”
Here, at Apex North, my number one goal is helping CEOs develop the confidence and skill to grow their companies. If you’re interested in growing your company, let’s chat! Connect with me online or call me at 612.504.0129.