Insights into the executive mind - Chip Perry

May 1, 2008

Chip Perry
President & CEO
AutoTrader.com

This month is the 10th anniversary of AutoTrader.com. Since its founding in 1998, AutoTrader.com has grown from 10 people to 2,000 employees across the country. Perry was the first employee. Today, AutoTrader.com anticipates growing by more than 400 people during 2008. The site currently has about 3.2 million cars listed for sale and more than 14 million unique monthly visitors, making it the nation's largest auto marketplace.

Business to Business: What business books have helped you become a better leader, businessperson and CEO?

Chip Perry: I don't tend to follow the latest trendy business books that trumpet "the next big thing" in management. That being said, a book I have found useful is Michael Porter's "Competitive Strategy." It is a seminal work that has influenced the creation of business strategies across literally hundreds of industries over the past 25 years. Porter showed how basic economic principles and concepts can illuminate the way industries are structured, how profitable they are and how individual companies can forge successful strategies that are rooted in the dynamics of suppliers, customers and competitors. And the great thing is you don't need to be an economics major to understand it.

BTB: What did you learn from the biggest mistake you've ever made?

Perry:  In relationships with both superiors and employees, I've learned that one ignores interpersonal chemistry at one's own peril. Chemistry is intangible, but it's easy to know when it's there or not. Chemistry is key, because it facilitates a candid relationship and trust between two people.

I also consider developing good chemistry the boss's responsibility, not the subordinate's. Whenever I've felt the chemistry was lacking with my boss, I wasn't happy and I ended up moving on, sometimes without much planning or preparation. 

On occasions when I've hired or promoted someone with whom the chemistry seemed right at first but turned out to be lacking, our relationship inevitably became strained, and eventually we parted.

BTB: Any mentors along the way?

Perry:  I've been fortunate to sit at the elbow of a couple of really great leaders who inspired me and gave me strong role models to emulate. The first was Dick Schlosberg, who was publisher and CEO of the LA Times when I worked there in the early 1990s. He was the head of a big newspaper, but was never too busy or too aloof to spend time with anyone in the company, at any level. He also showed me the importance of fiery, passionate leadership that helps people see the big picture and the higher purpose of their work.

The second was Dennis Berry, who was the CEO of Manheim Auctions and then COO of Cox Enterprises when I worked for him. Dennis has an uncanny ability to see opportunities invisible to others as well as the courage to pursue them with tremendous gusto and determination.

BTB:  What advice would you give a new CEO?

Perry: A company's fortunes ultimately rise and fall on the way customers perceive its products, people and value proposition. So all CEOs, new and experienced, should spend time with their customers.

Visiting with customers on a regular basis keeps you grounded in current trends in competition and how the folks who pay the bills see your offerings. Seeing firsthand how your sales people and how customers react pitch your products provides valuable insights that enable you to create realistic financial forecasts and on-target new product plans. It's important to stay in touch with customers that are big fans as well as those who are unhappy or even alienated from your company. Some of the most important things a CEO must know come from unhappy and former customers.