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'No Magic Formulas" - CEO Spotlight: Chanan Greenberg, CEO of Privia (Aug 2002)
By Angel Mehta, Managing Director, Sterling-Hoffman Management Consultants
Privia, Inc. (www.privia.com) began operations in 1999, with a strong belief that companies could reap substantial benefits from a solution that would help them manage their revenue pipelines. Known for taking business concepts and turning them into profitable software companies, Chanan Greenberg’s Leadership approach reflects his passion for building a successful software organization.
Sterling-Hoffman Management Consultants: Over the years the role of a CEO has changed especially in the Technology industry. You’ve started up a number of organizations prior to Privia, what do you think the role of a CEO in a start-up organization is today versus 10 years ago?
Chanan Greenberg: I think changes in technology and even market conditions do not change the fundamental duties of a CEO. New technologies and E-Business applications require CEO’s to have a greater understanding of these opportunities so they can reap the potential benefits for their organizations. However, the basic requirements of CEO’s remain very much the same, as they were long before the dot COM bubble.
In a start-up, the role of CEO is to execute on a vision and to lay down the foundation for a corporate culture that will successfully support a growing profitable business. The CEO needs to establish a clear vision of the opportunity or un-served business need. From there, he or she needs to determine that there is a big enough market to support a company servicing that need and establish enough differentiators that will give the company a fighting chance and get funded. Keeping the company funded is the CEO’s on-going, never-ending duty. To be successful the CEO must build the company to last. This is accomplished by establishing a profit-driven culture, setting up measurable standards of performance, building a great team and balancing all of this with the need of the company to be “light on it’s feet” and responsive to customer needs.
Current market conditions may make the game tougher but the rules for building a profitable business remain the same.
Sterling-Hoffman Management Consultants: What talents do you feel you bring to Privia?
Chanan Greenberg: As a CEO & founder driving the company’s direction, building a great team and keeping the company funded come with the territory. I think my personal and professional background allow me to bridge business and technological concepts and present them in a compelling way that helps attract customers, experienced executives and investors. I also focus on driving the determination to succeed through the entire executive team. It would be easy to blame “market conditions” for the adversity we face out there, however, it’s conviction and determination that will keep us moving forward acquiring new customers.
Sterling-Hoffman Management Consultants: Many say that the entrepreneur’s success is mainly due to luck. There are so many people that are talented yet never achieve success. Is it really luck or is there some magic formula that determines who succeeds especially as a CEO in this industry?
Chanan Greenberg: I can’t think of any CEO who would object to having luck on their side. However, no serious CEO would build a business plan factoring in “luck”. Building a business requires a lot of planning and plenty of hard work, having luck on your side is great, but luck is an element we cannot control or count on.
I don’t believe in “magic” formulas. There are some good business practices and some “golden numbers” you aim for when building the company. Experience shows that following certain guidelines helps build a better team and achieve better financial results. But it’s important to keep an open mind and adapt to change. Getting some experienced executives to join the company and its board of directors can provide important perspective and help CEO’s avoid making some mistakes. It’s true that some excellent people who followed “golden rules” have not achieved success – some of that can be attributed to “bad luck” some of it due to bad management. The past few years have confused many of us, with regard to what it means to succeed. We have seen many lucky people get rich from companies that have since been written-off. They were definitely lucky and talent was only a part of the story. You could say that Mr. Gates and Mr. Ellison are also “lucky”. But you can’t be lucky all the time; their track record of building great companies indicates that talent and hard work are still a big part of their story.
Sterling-Hoffman Management Consultants: If I were thinking of starting up a company today, do you think this is a good time to launch an enterprise software business?
Chanan Greenberg: I think it is an exciting time to start building a new company. If you can identify a critical business need that is underserved, a large enough market that would pay for your product and you are able to establish some barriers for competition – you might be on to the next big thing. It’s true that it’s harder to get funded and harder to execute – building companies is never easy. Investors as well as customers are carefully checking to see if what you offer provides real value. But if a start-up company does get funded and is successful in generating sales in this difficult market it’s obviously providing a truly valuable product or service and has a serious management team leading it. Privia was funded by Benchmark Capital in late 2001 and started generating sales in early 2002 with Fortune 500 companies, yes it is very difficult, but we are seeing that it can be done. Young companies who survive this market and continue to grow will become greater companies down the line.
Sterling-Hoffman Management Consultants: How important do you feel your Board of Directors is? Could you describe a situation or provide an example where they played in an integral role in decisions made.
Chanan Greenberg: The board of directors is tremendously important. It’s not just a reporting committee. It’s an active forum in which important issues for the company are discussed and decisions are made. In a start-up stage, management is often busy working on the day-to-day tasks and the board is a forum that periodically gets management to look again at the big picture and evaluate its progress. Active board members contribute on an on-going basis to recruiting and sales efforts. Privia’s board consists of experienced investment and professional executives who lend their experience and contacts to help Privia’s management build the company.
Sterling-Hoffman Management Consultants: Many CEO’s feel that choosing the right executive team is essential to succeeding. What criteria do you use when choosing executives to join Privia?
Chanan Greenberg: The importance of selecting the right executives to join the team cannot be overstated. In early stage companies, each executive has a great individual impact on the company’s performance. The criteria we use at Privia for choosing executives are:
Relevant professional experience – start-up companies need executives who can hit the ground running and get results.
Relevant occupational experience – not everyone fits into a startup. People who have spent 20 years working for large corporations and have never worked in a startup environment can go through great adaptation pains and at the end may discover they only perform well when they have a large organization backing them.