10 Regrets of Not Doing The Right Thing

One evening I was ruminating about management regrets.  We all have them.  Sometimes we learn… but too often we don’t.

3985490626_4ece1bf58aI sent a flurry of emails to my CEO friends, asking, “Tell me about a time that when you made a CEO-decision that YOU KNEW DARN WELL you should have made much earlier but were nervous about…. but when you finally pulled the trigger EVERYTHING TURNED OUT JUST FINE.”

These friendly pillars of knowledge, offered these thoughts:

  1. Going slow on investing just leads to wasted time as one ends up investing down the line anyways.  There is no investment better than investing back in a growing business.  Do your ROI analysis – if you won’t lose your shirt… go for it.
  2. I’ve never regretted firing someone who wasn’t performing or the wrong fit, even after worrying about the decision for months.  On the other end of the spectrum, I’ve never regretted making a much-needed, but costly, new hire “too early.” In both cases, I always look back a few months later at my team say, “Why did I wait so long?”  JUST DO IT!
  3. Getting nit-picky in deals and ending up not getting them done!  What a waste of time and loss of an opportunity – I was foolish!
  4. Not hiring fast enough, thinking I can’t afford headcount, but not hiring is what I could not afford.  For example, It has been just about 30 days since our new VP joined, and he already has 15 multimillion deals in the pipeline with our existing partners.
  5. Never wait to be tough in negotiations with bigger companies.   We were wrongfully being sued at the IP level by a big company because they were worried about us as a competitor.  They presented an irrelevant but related patent and sued us to try to scare us into selling to them.   Everybody around me was asking me to compromise and give up because it was just one of many market opportunities for us.  I refused to compromise.  We did the right thing and… extracted a very favorable settlement which gave what we needed in a very affordable way without having to go to the uncertainty of a trial (which the big player really didn’t want either).
  6. Quoting customers list price for an upsell the customer asks for!   Salespeople are always nervous about offending the customer or losing a deal and I keep telling them there is nothing offensive about charging appropriately (never gouge!) for additional services.   I joined in on a call and it took me less time to get the customer to say yes to an additional element than it took me to get my salespeople to stop whining about being afraid to quote it.
  7. Not saying “No” earlier in a deal/negotiation process whether it was for financing or revenue.  I’ve found its the fastest way to cut to the chase as to whether a real deal can be struck, but also nerve-wrecking at the same time.
  8. Deciding to raise prices when the product value calls for it.  Sales guys never want to deliver bad news.  If we do our homework properly we usually get the expected result, but again, we’re always worried about irrational actors.  Stop worrying and do it!
  9. Every time some one gets canned.  Everyone knows it for months but nobody has the “guts” to do it so I STEP IN AND FORCE IT.  Everything always comes out fine… actually, things get BETTER after the tumor is removed.
  10. Overthinking, Micromanaging, Delaying, Denying, Hoping and then Dying.  You can’t layoff and cut expenses to get rich, you can’t hope your way out of a hole, you can’t micromanage your way to recovery.  You need dry powder in the form of capital so you can invest in the business and manage through the tough times.  This game is not for the feint of heart or the under-capitalized.

HEY! That’s My Pie!

PieChartIf your time was a pie chart, how much do you serve to others vs. keep for yourselves?  

Good question, eh?

The fact is that founders and CEOs are notorious for not only serving up too much of their pie to others but allowing others to steal their pie.

This is a question I address in engagements with founder CEOs.  Regardless of the company, sector or unique skills of the founder CEO, the stories are remarkably consistent:

“Once upon a time I had a vision for the company and dedicated myself to sector relationships / product / whatever (pick one) and this consumed something close to 70% (the typical answer) of my time. We raised money, hired key staff and drove forward.  Now, a couple years later as we cross $5M / $10M / $25M (read: real revenue) I found myself miserable – trapped IN my company vs. working ON my company.  I want and NEED to get back to driving value by staying in my zone like I was on day-1…  Please help liberate me from the other stuff!!”

After some questioning and prodding followed by honest introspection on the part of the founder CEO, the truth comes out: the CEO actually gave away his/her time or allowed it to be taken, it was NOT stolen.  Along the way, many issues are revealed:

  • Hired a Resume – into a key Sr. Mgmt position without examining true management capabilities.
  • Allowed Upward Delegation – particularly critical problems in product, operations or sales.
  • Feared Losing an Executive – and permitted performance issues instead of acting decisively.
  • Refused to Delegate – holding on to issues that took time away from value-driving efforts.
  • Micromanaged Delegated Issues – because the CEO had a previous aptitude in the area.
  • And on and on and on…

When we cross this bridge and put the truth on the table, creating a plan is remarkably straightforward.  This usually consists of a “before and after” org chart and list of 5 – 10 specific actions that the CEO will make in the next 30-60 days including hiring, firing, process modifications and personal behavior changes.

Executing that plan is anything but straightforward because humans are not robots and necessary discussions require brutal honesty and the conviction to make tough decisions and hold such discussions in the first place.  With a coach and accountability, however, the CEO can pull it off and get back to a pie chart where 51% of their time is dedicated to the areas where the CEO uniquely excels and adds enterprise value.  In the end, the organization and CEO are BOTH re-energized.

It’s not only unselfish to keep more of the the “time pie” to yourself, it forces your direct reports (read: well-paid Sr. Managers) to do their jobs and allows you to stay in whatever “your zone” is and drive the valuation of your company.

Is it time to stop serving it up and get back to driving value?

Crossing The Chasm Into Mid-Stage Growth

I was recently encouraged to elaborate on the shift a startup CEO goes through when their company has reached the meaningful revenue-generation stage and can see profitability on the horizon.  That’s a book!  Nonetheless, in response to that urging, here’s a basic top-line look at my perspective on the topic.

For those that know me, some of this is repetitive or verbatim from the About Page of my blog.  Anyway, one of my passions is to enable founder CEOs to calibrate their focus and execution as they drive the enterprise value of their business past the early stages of its life.  These CEOs typically started out with an idea and about three years later, perhaps after a pivot, are successful but feel trapped inside the business by HR, Operations, Finance, etc.  These leaders often express a desire to get back to personally driving a key part of the business “like in the early days.”

For founders, this point is often where the start-up has become a ‘going concern’ and is growing in its sector rather than blazing the initial trail.

In the life cycle of any business, there are a number of perfectly normal chasms to be crossed.  For start-ups that are moving into mid-stage life as established firms, this often means crossing the chasm from early stage team to an organization optimized for growth.  It also may mean that it is time for the CEO to think about a COO.  Why a COO?  I elaborated on the importance of a #2 in a previous post found here.

NOTE: optimizing the organization does not mean suddenly hiring a bunch of people and spending tons of money (which can also cause investors and board members to hyperventilate over the new burn-rate).  It does mean, however, that the org chart may require distinct changes to be prepared for next-stage growth.  Egos must be set aside as the skills of everyone in the organization are objectively considered in addressing two key issues:

  1. TEAM NEEDED: What additional skills are required to deliver specific results one-year and two-years from now?  This requires a careful and realistic preparation and review of a strategic growth plan to assess what the most effective AND dollar-efficient organization looks like.  This also may mean re-drawing the org chart with fresh eyes and seeking external perspectives.
  2. SKILLS AVAILABLE: With #1 on the table, evaluate if the needed skills are present among the current team.  Can they reasonably and objectively be developed in the near term?  If not, what are the best roles for those current team members?   This is sensitive, particularly in the face of the great temptation to reward early participants with titles and roles that are often beyond their skills and capabilities vs. placing them in the optimal positions.

If executed properly, three things happen:

  1. The CEO is sequentially and meaningfully enabled to devote more and more of their time to what they do best – be it product or business development – and drive the value of the enterprise from those role(s).
  2. The CEO is also freed-up to ‘be the CEO’and lead the team including the important casting of the business vision and mission without being distracted or embroiled in more granular operational issues.
  3. The management team has a specific organizational hiring plan that is aligned with the strategic growth plan (typically labelled “Rev 27” ha, ha) and they are accountable to the CEO to execute it.

In stepping back, the foregoing may seem like an over simplification.  In reality, this process must be carefully managed as myriad issues loom around the reasonable feelings of early stage participants and introduction of new team members, often in senior positions. Sensitivity and communication in the planning process is vital.  This should include 1:1 lunches with key individuals where clear decisions are presented along with highly encouraging feedback.  A little patience is in order as well – my experience is that the process takes 60 to 90 days from start to full buy-in by the management team.

The foregoing should a long way to ensure the trip across this particular chasm is a success.

Top 5 Mistakes When Hiring a COO

I recently read an article by Debbie Millin the President & CEO of UpperLevel Solutions, a professional firm that offers COO services to companies looking to fill a skills gap on an interim basis. Debbie indicated that these are the top-5 mistakes that can be made when hiring a COO (summarizing the longer blog article she wrote):

1. Candidates are not senior enough.

You start out thinking you want an executive role, but during your search process you scale it back to something at a lower level because (a) you can’t afford an executive level person – or at least you think you can’t, (b) you don’t want to upset your existing senior managers by bringing in someone above them, or (c) both.  

2.  Candidates are too senior.

You find someone with fantastic experience at Fortune 100 companies coupled with every certification and degree on the planet and naturally assume this person must be brilliant and will lead your company to greatness.  9 times out of 10 this person is trouble to a growing company (culture misfit).

3. You don’t listen to your existing management team.

You have hired your current management team for their skills and knowledge.  They may have some insights you don’t, or they may not be able to articulate anything but a gut feel.  Don’t dismiss that.  You may need to sort through any politics that are feeding into their thought process. Listen to them.

4. You limit your search to candidates within your industry.

This is often a very big mistake.  Of course there are some specific industries that require very specific experience, but that is the exception not the rule.  Don’t limit yourself.  Find a good, smart ops person and they will learn your industry quicker than you think.

5. You are only looking for local, full-time candidates.

Many employees only visit an office a couple of times a week, if at all.  If someone has a computer and phone – and the right background – they can get the job done for you. Think about what’s right for your culture.  You might truly need a COO-level person, but only need them part-time.  

Shrewd advice!

Debbie can be found at: www.linkedin.com/in/debbiemillin

Top-10 Peter Drucker Quotes

Like many of you, I have been tremendously influenced by Peter Drucker.  The other day I was reminded that it was the 50th anniversary of the publication of Drucker’s classic Managing for Results.

In that light, I pulled together my top-10 favorite Drucker quotes:

  1. There is nothing so useless as doing efficiently that which should not be done at all.
  2. Innovation is the specific instrument of entrepreneurship – the act that endows resources with a new capacity to create wealth.
  3. Management by objective works… if you know the objectives. Ninety percent of the time you don’t.
  4. Rank does not confer privilege or give power. It imposes responsibility.
  5. Unless commitment is made, there are only promises and hopes, but no plans.
  6. No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.
  7. Most of what we call management consists of making it difficult for people to get their work done.
  8. Efficiency is doing things right; effectiveness is doing the right things.
  9. Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.
  10. Management is doing things right; leadership is doing the right things.

Inc’s GrowCo: Startups Matter More Than Ever

GROWCO Energy in groups is often contagious and there was an abundance of it at Inc Magazine’s GrowCo conference last month in Nashville.

If one had any doubts about the state of the American entrepreneurial spirit, those are quashed this week as founders and start-up executives descended on Nashville at Inc’s annual confab.

A few issues were noticeable to me.  Here are my top-3:

  1. Management disciplines don’t get enough credit
    OK, frankly basic management is something of a boring topic when reduced to its academic foundations… Rockstar CEOs on the other hand are revered without deeper dives into their management techniques – maybe too much so.
  2. Innovation is seen as hit or miss or luck.
    There’s not enough digging into the decisions made by founders and then showcasing where those founders were quite intentional and well-reasoned in their decisions.
  3. Scaling processes and scaling the team is critical to scaling growth… but largely left out of the conversation.
    Now, if you were paying close attention, Papa Johns CEO touched on it in his interview: “Whatever gets, measured gets done. Whatever gets rewarded, gets repeated.”  He’s actually talking about scale gained by measurement of KPIs and replication (also scale) caused by a reward system that incentivizes it.