HBR: What I Didn’t Know About Becoming a CEO


By Karen Firestone
NOVEMBER 09, 2015

The company I co-founded is now ten years old. While we’re an investment firm, many of the things I’ve learned as CEO transcend any particular industry. In looking back over the years, there are some things that I expected to be tough, and they have been. But there have also been surprises.

First, I was surprised by how much selling I would personally have to do as CEO – and I was equally surprised by how much I enjoy the process.

I had very little experience as a corporate pitchwoman. That doesn’t mean I was a novice in promoting an idea; as a young analyst at Fidelity Investments, I needed to convince the managers of the large mutual funds to buy my stock ideas. That entailed delivering a successful sales pitch accompanied by a written report including some type of quantification supporting my claims. Later as a portfolio manager, I traveled to conferences and delivered speeches about my fund, but I was rarely involved in the “selling” process. That was the job assignment for many other very skilled people.

And yet from the minute we received our SEC approval to manage clients’ assets, I became our chief salesperson. And it turns out I like selling much more than I thought I would. Of course, I believe in our product, which is the ability of our firm to deliver strong investment performance and competent service. But what I find really fascinating is how sales is like solving a puzzle using listening, questioning, describing, and responding to the potential client to somehow capture her interest and commitment.

I still find these presentations exhausting in a way that I never find studying an income statement, interviewing a company’s management, or building an earnings’ forecast tiring. But it’s also exhilarating.

My second surprise has been how much my own mood is affected by our firm’s performance – especially underperformance. Of course, I love whenever we outperform our benchmark or peer group, but the pain of underperforming is much more painful than the pleasure of winning the same amount, a phenomenon studied at length by Daniel Kahneman and Amos Tversky.

And though I originally believed that if I shared portfolio decision making with a few partners, I would minimize the pain of bad days, weeks, or quarters, I could not have been more wrong. During the crash of 2008, the four of us responsible for picking stocks all suffered our own individual and collective anguish as the S&P plummeted.

And I was startled to learn how much my attitude still sets a tone around the office. There was an occasion years ago when one of my partners commented that I seemed to be in a bad mood, and that it was not an effective management strategy. That made a huge impact on me. People like to see the boss project a positive outlook even if the market is tough that day, or the firm just lost out on a major new account.

Finally, I’m also frankly amazed that ten years into our business and many decades into my life as a professional investor, I remain as concerned about the particular stocks we buy and investments we make as when I first began recommending equities as a young analyst many years ago.

I had thought I might be less of a market addict as our firm aged, or that I would care less strongly about our competitive positioning. But every Sunday evening, all year, every year, around 6:00 PM, I mentally travel around the globe, thinking about the direction of the stock market the following day and what that will mean for our holdings. I often only think about it for short time, perhaps 30 seconds, but sometimes it stays with me, in the forefront or background of my mind for hours, and I wake up with the same thought on my mind.

I suspect that for many CEOs, thoughts of their organization are often swirling close at hand. I do not mind that proximity; it has become comforting to me, not disconcerting or intrusive. Ten years in, I’m happy that I feel that same drive. Though the specifics surely vary widely, I’m sure most CEOs also find themselves surprised by their current responsibilities, their attitude toward certain functions, and perhaps most of all, the impact we all have as leaders of an organization.