CEO Accession: Additional Information

THE METHODOLOGY

 

Step One: Data Collection

 

SBI researched both private and publicly traded companies. Collecting financial data over a four-year period (2016 – 2019). After reviewing the data. SBI was not confident in the accuracy of the data collected for privately held companies.

 

 

SBI then collected information on 1,800+ publicly traded companies from Refinitiv. The following criteria was used to select the population set:

 

  1. Headquartered in the United States 
  2. B2B 
  3. Market Capitalization ($100M to $3B)
  4. 3-year Compound Growth Rate greater than zero

     

This resulted in 1,405 companies.

 

Step Two: Time in Seat Research

 

Using company 10’Ks and Refinitiv data sets SBI determined which CEO’s had been in their role for 4+ years. Specific criteria used was.

 

  1. Started on or before January 1st, 2016
  2. Maintained the position of CEO through December 31st, 2019

     

This allowed SBI to use 2016 as a base year and to calculate three-year revenue, EBITDA and share price growth off 2016 (the base year).

 

This resulted in 700+ companies.

 

Step Three: CEO Background Research

 

Using various resources such as: LinkedIn, Refinitiv and corporate biographies. We bucketed CEOs into six functional areas.

 

  1. Engineering
  2. Finance/Admin
  3. Marketing
  4. Operations
  5. Product
  6. Sales

     

When determining what function to place each CEO. We used a benchmark of 10+ years or 50%, whichever is greater to determine how we defined CEO’s backgrounds. We looked for specific job titles and functions to validate their backgrounds.

 

During our research we removed two groups of CEOs from our research.

 

  1. Any CEO you in their current role was a CEO/Founder of the company 
  2. Any CEO for which we could not draw a clear line or find adequate information to determine which function area to place them

     

This resulted in 500+ Companies

 

Step Four: Data Analysis

 

We selected a random sample size of 140 companies from the remaining 500 companies. The randomly selected sample size of 140 is what is reflected in this report.

 

BEST PRACTICES FOR CEO NEW HIRES

 

1. Make Revenue Growth a requirement

  • Does your candidate have a revenue growth background?
  • Could they grow their way to EBITDA, or would they have to save their way to EBITDA?
  • Are you considering a VP of Sales or a Chief Revenue Officer?
  • Have they spent 5+ years in a sales function?

     

2. Outside in focus and client experience

  • Has the candidate owned a client relationship?
  • Have they been in a primarily client facing role (Sales, Marketing, Customer Success, etc.)? 
  • Do they focus on operational efficiency or customer experience?
  • What can they tell you about your customers?

     

3. Cross-Functional Interlock

  • How collaborative is the person’s leadership style?
  • How does the person interact with the Sales and Marketing functions?
  • Have they worked in two or more functions throughout their careers?

     

4. Do they have Go-To-Market Experience?

  • Can they think beyond just Sales and Marketing and identify the best routes to market?
  • Do they have experience with both direct and indirect go to market models?
  • Do they think about efficiently growing revenue?

     

5. Ability to be Agile and Dynamic?

  • Are comfortable making decisions with incomplete data?
  • Do they have a bias for action versus analysis?
  • Are they able to adapt quickly to changing market dynamics and fact base?