This article, written by Andrii Nasadchuk, a renowned IT expert and CEO of Aimeice Tech, is part of a series aimed at raising awareness of the most pressing challenges in the IT industry and offering practical tips to navigate them.
As CEO of Aimeice Tech, an education software development company, I never underestimate the importance of learning from the experiences of other business leaders. The insights gained from studying how others navigate IT industry challenges can be just as useful as analyzing your own mistakes.
I recently spoke with a fellow technopreneur Sergey Bondarenko, who has spent more than a decade as the CEO of an IT services company. This conversation inspired me to write an article focusing on the top ten mistakes C-level executives make, as well as advice on how to avoid them.
Top 10 Mistakes CEOs Make & How To Avoid Them
A brief explanation of why I am sharing this article at this particular time. Here’s the context:- The global IT services industry, despite currently growing at a CAGR of 7.1%, is undergoing a rapid and rather turbulent transformation, with enterprises primarily investing in cloud computing technologies and cybersecurity
- Many Western companies are now outsourcing to Asia and Latin America in order to cut IT costs and navigate geopolitical tensions in Eastern and Central Europe
- According to a recent KPMG survey, 31% of enterprises have already made no-code and low-code platforms the foundation of their digital transformation strategies, citing increased employee productivity and speed to innovation as the primary reasons for reducing investments in traditional coding
- Enterprises are increasingly adopting generative AI solutions for software development, hoping to accelerate coding activities by up to 50% while reducing their IT employee headcount
1. Disregarding Continuous Learning
This may sound cliché, but the IT industry is indeed fast-paced. Especially when it comes to coding and managerial skills and their practical applications. According to recent research, the average half-life of a skill is only five years. This means that in five years, your newly acquired skill, such as retraining open-source large language models (LLMs) on customer data or running time-boxed proof of concepts as part of AI development services, will be only half as valuable. One of the most common CEO mistakes is failing to prioritize continuous learning, especially if you come from a pre-AI era when mobile and web development alone could sustain an IT company's growth for years due to the scarcity of skilled professionals in these fields. A way out? Continuously seek out learning opportunities, keep up with industry trends, and encourage your team to do the same. Ideally, your company should have a dedicated learning and development department that oversees employee qualifications and provides in-house training in a variety of domains, including foreign languages, cutting-edge technologies, and cybersecurity best practices.2. Becoming a Micromanager
Empower, not micromanage. That is the mantra we hear from all inspirational leaders. But do CEOs really take this advice? During our conversation, my colleague admitted that he had previously believed that his involvement in every project (and every task his team completed as part of that project!) would ensure IT service quality and increase customer satisfaction. In reality, these practices hampered employee creativity, increased stress, slowed progress, and led to deviant behavior, such as arriving late for work and quitting on short notice. A recent Trinity Solutions’ study echoes his sentiment. For example, the researchers discovered that 71% of employees working for a micromanager felt their performance suffered; meanwhile, 69% of respondents considered changing jobs as a result of micromanagement, with 36% actually carrying out their plans. To avoid making this mistake, CEOs should learn to identify and communicate desired outcomes, delegate decision-making authority, believe in their employees' abilities and decisions, adopt a coaching mindset, and foster a risk-taking environment. It is also critical to get regular feedback on your leadership style and adjust it as needed to avoid falling back into the micromanagement trap.3. Ignoring Work-Life Balance
Overtiming is not unusual in the IT services industry. For example, a recent study conducted by Indian IT specialists discovered that employees frequently work 50 or more hours per week to meet project deadlines. Our story's hero took the same approach, burning the midnight oil and expecting his team to follow suit. Such practices quickly led to exhaustion, decreased productivity, and other signs of a burnut, resulting in skyrocketing turnover rates. Some common causes of burnout, as reported by IT industry insiders, include heavy workloads (57%), limited support from senior management (32%), and a lack of resources to perform jobs effectively (31%), among others. As a CEO looking to effectively navigate IT business problems, you should prioritize work-life balance for yourself and your employees, while also setting boundaries and respecting personal time. On a company level, it is critical to encourage your employees to use vacation time, take regular breaks, and avoid working too many hours.4. Planning finances inadequately
One of the most daunting challenges in the IT industry is connecting ongoing tasks and processes to a larger, company-wide picture. CEOs are frequently unable to effectively manage cash flows because they are preoccupied with daily tasks such as securing new projects, hiring the best talent, and keeping existing clients satisfied. This issue is often caused by an even larger problem—a lack of strategy, strong positioning, value proposition, and clear growth plans. Most smaller IT companies, particularly unicorn startups, operate without a CFO, making strategic financial decisions without due consideration. Inadequate financial planning inevitably reduces revenue for IT companies, forcing them to lay off employees, cut marketing budgets, and eventually go out of business. To avoid this scenario, you should not only hire skilled financial professionals for your team but also improve your own financial literacy. As a next step, you should define crystal-clear, measurable short- and long-term financial goals, confirm that these goals support your overall business strategy, such as entering a new market or investing in R&D, and build a healthy cash reserve to sustain your business during times of uncertainty.5. Overpromising and Failing to Deliver
In order to win clients, IT companies make promises that can be difficult to keep. Often, this is due to a lack of specialization and relevant experience with specific technologies or domains that the companies are targeting. For example, at the onset of the COVID-19 pandemic, all IT services companies suddenly became experts in healthcare technologies in general and telemedicine solutions in particular. In reality, most of those "experts" have yet to create a HIPAA-compliant application. Overpromising and failing to deliver on obligations harms your company's reputation and undermines client trust, but it can also have legal and financial ramifications. Luckily, such CEO mistakes can be avoided by setting realistic expectations with customers, embracing transparent communication, and realistically assessing your IT teams’ knowledge and capabilities.6. Failing to Adapt to Market Changes
In a world where GenAI-powered chatbots work alongside human mental health counselors and robotaxis threaten to replace traditional drivers, saying that technology is moving at an astounding pace would be an understatement. For new technologies, the time to obsolescence—i.e., the period during which a particular technology is useful—is shrinking by leaps and bounds. Just ten years ago, a food delivery startup could not do business without spending a few hundred thousand dollars on two mobile app versions (one for iOS and one for Android). Yes, cross-platform app development frameworks such as Xamarin existed, but their performance often fell short of expectations. Today, a HoReCa business could build an app using low-code or no-code platforms and go to market up to three times faster while cutting application development costs in half. Do not get me wrong: sticking to the so-called legacy tech stack can be a business strategy—after all, more than two-thirds of companies still use legacy software to support mission-critical operations. However, if your IT company seeks to charge higher rates and secure a lasting competitive advantage, you should keep your finger on the pulse of technological advances, continuously expand your service offering, invest in employee education, and recruit top technology talent no matter the cost.7. Making Poor Hiring Decisions
As the CEO of an IT services company, you are probably aware that your employees are your most valuable and priceless asset. Rushing the hiring process or taking too long to make a decision can both have a negative impact on your business. These practices are not uncommon in IT companies, contributing to the recruiting debt. Similarly to technical debt, it accumulates over time until you realize you have entire departments of employees who are either incompetent or fail to function as a team, jeopardizing the success of clients' projects. Lesson learned: make sure to hire the right people to augment and strengthen your workforce. Also, look beyond technical skills and consider the candidates' communication style, personality, and cultural background; these should be consistent with your company culture.8. Neglecting Client Relationships
Running IT companies, fellow CEOs make one of the most unfortunate mistakes you can imagine: focusing too much on acquiring new customers rather than nurturing relationships with current ones. Prioritizing new customer acquisition not only strains your marketing and sales teams but also costs money. The expenses associated with acquiring a new client can be up to five times higher compared to upselling your services to existing clientele. Given recent developments in the global IT market and the growing pressure to optimize operating costs, the best decision you can make is to establish a solid framework for developing strong, long-term relationships with your customers. Aside from performing regular check-ins and providing impeccable services, this includes proactively proposing solutions to customer problems, implementing loyalty programs, and training your workforce in customer relationship management.9. Underestimating the Significance of Company Culture
IT companies, which are typically led by technologists, prioritize technical excellence and client satisfaction while failing to foster a strong, well-defined, and positive company culture. The outcomes? Employees struggle to understand the company's mission, values, and goals, which causes them to lose motivation and feel isolated at work. This leads to higher employee turnover, which jeopardizes project continuity, inconsistent work ethics, and difficulty finding skilled talent to fill hot vacancies. There are several steps a CEO could take to navigate this challenge. First and foremost, define the values that describe your company and what you strive to achieve; these values must be communicated to your entire workforce, not only by you but also by the entire leadership team, who must be competent in their immediate functions while also aligning with the newly established company culture. Second, cultivate a sense of purpose in your employees. This can be accomplished by clearly defining roles and responsibilities within the organization and recognizing and rewarding employees who embrace and promote the company culture. Finally, incorporate open communication into all aspects of your business, creating formal and informal channels for employees to express their concerns, ideas, and feedback. Running surveys and town hall meetings on a regular basis will allow you to detect and address common IT company issues such as financial uncertainty, layoff fears, and a lack of engagement.10. Not Seeking Advice
No CEO can be a one-man army, donning a superhero costume in an emergency and working around the clock to put out fires. By focusing on tactics, you miss out on the opportunity to conduct strategic work. That is why seeking professional advice is essential. In addition to establishing a competent leadership team to delegate some of your workload to, it’s recommended that you build a network of external advisors and mentors, utilizing expert consulting services to navigate change and adjust your strategy to the evolving market conditions.Conclusion
Mistakes are an unavoidable part of any leadership journey, and being the CEO of an IT services company is no different. Reflecting on these top ten CEO mistakes, as shared by a seasoned colleague, has not only improved my leadership skills but also strengthened the foundation of our company. For those about to embark on a similar journey, I hope these tips provide some guidance and help you avoid these common IT industry challenges. Keep an eye out for more thought leadership on our blog. Also, while we are at it, check out my recent article on effective B2B communication strategies.To avoid these mistakes and position your IT services company for success, consider partnering with Aimeice Tech. Our team of experts can provide guidance, training, and support to help you build a strong company culture, adapt to market changes, and nurture client relationships. Contact us to learn more about our services and how we can help your business thrive.
