Shadow CoachingSurgeon Atul Gawande has a great article in New Yorker about hiring a coach to help him become a better surgeon.
He doesn’t call it this, but what he’s describing is “Shadow Coaching”. A shadow coach watches you (or shadows you) as you perform some activity and later gives you pointers and tips to improve your technique. This is the kind of coaching sports coaches do; also acting coaches, singing coaches, etc. Almost any kind of coach that improves performance works this way.
It’s useful because a coach has a different vantage point than you do (physically as well as emotionally) and can see things you cannot. A shadow coach also needs an understanding of the topic and the ability to teach things you would not have known. In Gawande’s case his coach was also a surgeon, and able to perform in the operating room. But this is not required in a coach. I doubt that 200-some pound, 50 year old Bela Karolyi (pictured above) could do any of the things he coached his 80 pound teen age girls to do in gymnastics competition, yet they won Olympic gold.
They can improve your performance in the following areas
This is the term I use for a less specific, but often more powerful type of support. A strategic coach is your confidante, your sounding board, your cheer leader and the one to kick you in the butt when needed. A strategic coach helps you achieve success (as you define it) in a broader sense than a shadow coach will. In fact one of the first things a strategic coach should do is help you put specific descriptions to your definition of success.
Strategic coaching also works because the coach has a different vantage point than you do, but in this case the important distinction is more emotional and intentional than physical. In fact it’s common for strategic coaching to work by phone with no face to face interaction at all. A coach can keep the big picture in mind and not get as distracted as you are in the day to day emergencies. Probably the single most useful thing a strategic coach can do is keep you focused on the important things and not allow you to get consumed by the merely urgent.
In working with CEO’s there’s often a fine line between coaching and consulting so I thought it useful to give consulting a short mention here. My working distinction is this:
A consultant brings in expertise that you didn’t have. A coach helps you maximize the expertise you already have.
Another way to say it is a coach is more focused on asking the right questions while a consultant provides answers. In my experience, CEOs of small to medium size companies want both. They want a coach to help them become better at what they know how to do, and at times they want a consultant to bring in some expertise that they have not yet developed.
By “most CEO’s” I don’t mean most of the people who have CEO on their business card; not those in charge of very large, public companies. Most of us run companies with less than 100 people. In fact, 50% of the American work force works for companies under 50 employees. That’s a lot of CEOs.
And by “Nothing All Day”, I don’t mean you’re lazy or hanging out at the beach playing angry birds. What I mean is that the stuff you do all day is not, for the most part “CEO work”. It’s usually what is done in a large company by sales people, or production folks or HR or accounting.
There are 2 reasons for this.
This is a trap. The more time you spend on important work, the less often emergencies pop up. If you don’t force yourself to block out time for the non-urgent then you’ll always be chasing your tail.
This is true for all but the very largest companies. Think of CEO as a function not a job. Like cleaning your house. It’s a function that needs to be done, but you don’t need a full time janitorial staff. So there’s nothing wrong with you doing sales, solving production problems, or any of that others stuff. In fact there’s a lot that’s right with it.
What you shouldn’t do is neglect the CEO functions your company needs because they are not urgent.
Think of that metaphor. The conductor makes none of the music. A small band (4 or 5 people) doesn’t need a conductor. Everyone plays an instrument – but someone chooses what song to do next, and when to schedule rehearsal. You’re probably mid-way between the two. You are the conductor but you also play an instrument (or several).
My wife broke her leg recently so I’ve been doing all the driving and grocery shopping. She is able to use a wheeled stool to get around the kitchen and cook again which she is very grateful for – as am I – so her menus inform what I’m to get at the store.
One night at dinner she said to me, “The chicken stock makes the rice too salty”. I’ve been married long enough to know there was more to that statement than met the ears.
“Oh,” I said, “Did I buy the wrong kind of stock?” She nodded. “Should I have bought the low-sodium kind?” She nodded again. “But it didn’t say that on the list.” I said, more by way of explanation than self-defense.
Her response to me is the reason you should be interested in this post. She said “It never occurred to me that there was any other kind.” Never occurred to her. Never?
Of course she KNOWS there are other kinds of chicken stock. It’s just that this is the kind she’s used for so long that the others are not part of her conscious thinking anymore.
To be an effective shopping manager, she needs to think differently than she does as an effective shopper.
It’s the same reason we’re eating lots of mushrooms this week. She prints a list from the grocery chain website. The list said “ Mushrooms are on sale – 3 boxes for $5” and it didn’t say “We only need one box.” But I digress.
This is actually a pain in the ass for her. And I sympathize. She’s frustrated with having to spell all that stuff out. And frustrated when I call from the store asking about what I’m sure she considers stupid details. And she’s more frustrated because when she shops, she does make a list but also makes a lot of decisions and changes on the fly. These are triggered by what she sees on the shelf. And it ties into what she’s got coupons for and even changes her plans of what to cook. This is all very hard to translate into instructions for someone else to follow. Even someone as smart and motivated (did I say rich and good looking?) as I am.
The truth is, in our case it’s just not worth it for her to become a better shopping manager. We’ll muddle through and she should be driving again in a month or so. But in your case, if you want to free yourself from performing a function AND you want someone to do it as well (or better) than you, you have to become a better manager. Here are some tips:
1. Use details. Lots of details. A manager (or delegator) has to think differently than a doer. List the specifics of the outcome you really want – even the minutia that should be obvious. And consider the context of the decisions you’d make if you were doing the job. Then make those explicit. This is one reason it helps to write things down. It’s harder to be vague on paper.
2. Allow more time than you think it should take. You won’t be good at explaining everything right away and the other person will need some time to learn how you think. The more nuanced the job is, and the more experienced you are the more time it will take. Schedule some time for review and ongoing training. Schedule it before the deadlines are due so you have time to correct mistakes and omissions.
3. Use Verbs. Too often we give someone a list of To Do items that includes only nouns. When your list says “Conference Topics” it may not be obvious what you want them to do about Conference Topics. Do you want that person to suggest topics for the upcoming conference? Do you want them to interview others about what topic they’d like to see? Are you giving this person the authority to decide on the topics or just to recommend? The answer lies in verbs.
Jason Fried says that the office is a lousy place to get work done because of 2 things: Managers & Meetings.
If that’s true, then you’re not doing it right. And, of course a lot of people aren’t doing it right – that’s what keeps my blog in business. I’ll tackle the meetings bit here and leave the manager problem for another post.
Most people don’t do their work in a vacuum. They need collaboration and communication (C&C) with others. Let’s say you have 5 people on a team who need to organize their work together. Let’s add a sixth person – the manager – who needs to know how the team is doing, if there’s anything she can do to help any of them (that’s her job after all) AND she needs to provide direction and connection with other teams in the organization.
That’s a lot of C&C. If all those people reach out to one another willy-nilly whenever the impulse strikes that’s a lot of interruptions. No wonder Jason wants to get away from the office.
But there is another solution. Figure out which parts of all that C&C can be scheduled and organized. It won’t make the problem go away, but it will diminish it. Hopefully to the point where the down side of the interruption is out weighed by the benefits of C&C. So if you’ve got a scheduled and organized way to collaborate and communicate, what do you have but a meeting?!?!?
I agree that most meetings are a waste of time. But that’s because they aren’t done right. Appropriate meetings not only save time, but encourage all kinds of good things like synergy, morale, camaraderie, sharing of ideas – in short, team work. But the idea of abolishing meetings because of this problem is like abolishing food because people are obese. You just have to do it right.
[Ricardo Semler goes so far as to make all meetings optional. His point is if you're planning the meeting it's your job to make it enticing enough that people want to come (and want to pay attention instead of playing with their iphones). This is pretty extreme and only works when all other aspects of the company culture are aligned with it. But it's an interesting approach. ]
If doing meetings this way sounds like a lot of work – well yeah. That’s why no bumper sticker says “I’d rather be running a meeting.” But (as Jason points out in the video) meetings are expensive. A one hour meeting with 10 people is really a ten hour meeting. And if you add up the salaries of all those people and account for the interruptions the meeting causes before they get back into the flow of their work – you’ll jump out of your skin. If you’re going to spend that much money / time / etc isn’t it worth it to do it right? That’s why you get paid the big bucks.
UPDATE: Seth Godin and I are aligned in starting the new year with better meetings.
flickr.com/photos/ramdac/ Jason Gulledge
I almost called this post the ideal team for RUNNING your company. But that would be wrong. You can run it however you want. Some people want to be in charge of everything. Fine. Some want to just do stuff and not think about process or monitor any results except the bottom line. Fine. Some want to operate on a whim and change direction on impulse. Fine too. You can run a company any of those ways. Just don’t expect it to grow very large or very fast.
If you want a company to grow, you have to have a team that executes. Hence the term “executive.” By executive, I mean someone who can take an idea and run with it: make it happen. I don’t mean they run away with it. Executives need to be monitored and accountable but they don’t need hand holding. They take responsibility and initiative.
There are two reasons you need a team and they both relate to the fact that a growing company is constantly changing. There are new activities and new challenges all the time. (This same is true of a turn around situation so the team concept is applicable there as well even though the company may actually be shrinking not growing).
Reason # One is there are too many moving parts for a single person to do them all. If the same stuff is happening over and over again, maybe one executive can deal with it. But by definition, this won’t be true if you’re growing.
Reason # Two is because of the shower syndrome. You know those ideas you get in the shower? Or maybe as you’re falling asleep, or out walking the dog? I often get them when I’m in the car by myself – another reason not to text and drive.
Those are the result of your non-conscious mind working on a problem after your conscious mind has let it go. They aren’t always right but they can be very very powerful. The reason for a team is you only get these ideas about one thing at a time. If you’re focused on raising a new round of investment, you won’t be focused on opening a new market.
flickr.com/photos/rocketjim54/
You need a team so more people can get these kind of ideas in the shower. Not that I recommend group showers or anything.
So without further ado here’s your team:
NOTE: The ideal team size is not 7 even though I’ve listed 7 categories below. The best team size is either 3, 4, or 5. It makes sense to combine responsibilities based on your industry, company size and individual’s skill sets. But you do need a “buck stops here” person at the top of each of these categories.
Sales & Marketing. I know these are separate skill sets, but they both serve parts of the same process (turning a person into a lead, then a prospect then a customer). So you need a person at the top who can make this happen and do it in a way that supports the strategic goals of the company. At different times that means opening up new markets, shifting the sales mix toward, or away from certain product lines, more profitable sales at the expense of market share – or vice versa.
Operations. This person is charged with developing an organization to deliver what the sales people sell. They must focus on effectiveness, not just efficiency. They should be able to accurately project lead times, quality assessments and costs.
CFO Everything the company does affects cash. Someone needs to be focused on the cash aspects of every decision the company makes. Someone need the time and bandwidth to routinely hit up vendors for better prices, make sure sales are collected early and bills are paid at the optimal time.
This person need not be an accountant. But they need to understand accounting well enough to “speak the language” and relate accounting to management decisions. And she (or he) must understand the differences between short term spending and long term investment.
Legal Almost everything the company does has legal implications. This person should not be in-house council. They should probably not even be a lawyer (like the CFO need not be an accountant). But they have to “speak the language.” This person should know when something needs to be sent to the company’s counsel and when it doesn’t. They should be able to mark up legal documents and negotiate contracts to a point where you’re not paying lawyers to do things that a mere mortal can accomplish. This way the firm can get the most benefit from what it does spend on legal fees.
IT Here I’m talking of IT as a strategic function – not a support function. Increasingly, every company has some informational or knowledge component to what they sell or how they make and sell it. Someone needs to know how to tap into the latest technology to provide a competitive advantage in that aspect of the product or process. This is the person I’m talking about.
For some historical perspective, consider this. Before factories were run by electricity, they were powered by an external source – often water. No matter what they produced, they needed an intricate arrangements of wheels, belts, pulleys etc to get the power from the river or waterfall outside the building to the machines and devices inside. The ability to design and implement the power transmission often became a strategic advantage to the firm – despite that fact that what they sold did not contain water, belts, or pulleys. That is the aspect of IT that I’m referring to here. It is of course, more critical in some companies than in others, but worth considering in all companies.
New Products Every market is moving faster and faster. Just selling the same stuff year after year is a way to consign your company to the commodity market (at best and the graveyard at worst). Someone should be thinking 1,2 or 5 years out about and developing new products for existing customers as well as new markets. This job is very much in the Important but not Urgent category.
CEO The CEO is the keeper of the business model. It’s up to her (or him) to understand how the trends and cultural changes outside the company affect and are exploited by the systems and organizational structure on the inside.
This person is the captain of the ship, or more aptly, the conductor of the orchestra. Did you ever stop to think that the conductor makes none of the sound the audience hears? Their job is in two parts. One faces outside the company where they need to make key relationships and notice trends. One faces inside the company, where they develop the size and scope of the organization to profit from those trends and relationships.
It takes a big cultural shift for many companies – especially ones that were founded by a single individual.
I’m a big fan of the bootstrap – that phase when you do it or make it rather then buy it, when you spend time rather than money, and pay in stock options rather than cash. But a company can only bootstrap so far. If you’re going to build a top notch team, you have to hire the best and pay them market rates. But just as importantly, you have to structure the organization so those expenditures are investments rather than costs.
Another big attitude shift is that of control. When one person’s at the top they are expected to know everything and all the decisions rest on their shoulders. A company like that can’t scale past a certain point. To grow you must be thrilled to give up control, and be happy to find people who are much better than you at certain tasks.
Another cultural shift is that as a company grows it becomes more dependent on process and less on just getting the job done. Not to say that process should be allowed to impede the results – that’s bureaucracy. But the wisdom and experience that people develop can’t be allowed to live in a few people’s heads. It has to spread throughout the organization so that best practices abound. That takes process.
Many of the ideas here were inspired by a discussion I had with Mark Volchek about this topic. Mark is a co-founder and the CFO of Higher One. The company was founded in 2000 by students right out of college, was on the INC 500 in 2009 and went public in 2010.
The title of this post is a play on the title of one of the best business books I know: Up The Organization by Robert Townsend. Townsend was president of Avis Car Rental in its prime and has some witty and insightful things about how companies (mostly big ones) should operate. The book has been revised and reprinted, but if you can find an out of print copy of his sequel Further Up the Organization, I recommend that one.
That’s reaction some entrepreneurs have. They don’t need no stinkin’ organization. They just tell people what to do. Then they scream and curse when it doesn’t get done right. But whenever you have two or more people working toward a common goal, you have an actual organization, whether you like it or not.
The trick to developing a growing, thriving organization is to push as much responsibility as possible down the organization.
The more things that are handled as close as possible to where the work is done, the more people at the top have time and resources to do more strategic things. But this is hard to do.
Why? Because the people at the top often have more experience and ability. At least we say that’s the reason. Yes, they often are more competent. But the reason it’s hard to push that competence down the organization is that people who are good at what they do have what’s called “unconscious competence”. Remember when you learned to drive a car? Remember the focus it took? You were developing competence – consciously. At some point you got so good you could drive and talk and listen to the radio, AND think about something else. You became unconscious of the movements needed to maintain speed, steer, put on the blinker etc. That’s unconscious competence.
Probably the person down in your organization, the one who should be given some responsibility, is not unconsciously competent. And if you just told them to do something they wouldn’t do it right. They wouldn’t get what you wanted done. It may not be that they can’t do the job, just that they need training, mentoring, oversight (aka management) to be able to execute that responsibility as well as it needs to be done. And that takes time and effort.
But more than time and effort it takes you being able to explain what you do well, and how you do it. That’s what trips most of us up. When we are so good that we are unconsciously competent, we can’t always explain to another person how it should be done. And so, we can’t figure out how to push some responsibility down to someone else. And we have to keep it ourselves. But that limits the growth of the company.
There are many: Checklists, Work Flows, Management Training, Mentoring, etc. “The Exercise of the Elves” is one of my favorites. They all take a skill set that is often quite different from the skill of actually doing the work. This is one reason many small companies stay small. They aren’t willing to invest in that skill. Big companies are. They hire people to do these things, or they bring in consultants [shameless plug] or both. Companies that aren’t willing to do this are forced to keep responsibility at the top and keep their organizations small.
But if you want to get out of the engine room and into the wheelhouse; if you want to take your company to new places; in short, if you want to function more like the CEO and less like the General Manager, it’s a skill you need to bring on board.
I just asked for a meeting with the CEO of a start-up I’ve invested in. The reason? I just got their half-year report and there’s no bad news! Andy, if you’re reading this, I’m talking about you.
Because we’re running a business here and there’s always bad news in a business. The only time there’s not bad news is when there is terrible news (the company just went out of business), or when there is amazingly, unbelievably, terrific news (the company just got bought by Google, here’s your check for $100 million). The rest of the time there is bad news. And the CEO’s job is to find it and fix it. And do it quickly so you can find more bad news, fix that, then rinse and repeat till Google buys the company and we all get checks for $100 million.
If I get a report that doesn’t mention the bad news, then either the CEO hasn’t found the problems or the CEO isn’t telling me about them (and probably isn’t asking for the help he needs to fix them quickly enough).
The thing that gives me the most confidence in a business owner or CEO is how they handle bad news and problems. This doesn’t mean they shouldn’t be upbeat. There was some legitimate good news in the half year report I just read. There’s always good news too (or you’re out of business). But a good CEO is upfront about the problems, is looking for the root causes (not just the quick fixes) and is putting together a plan to deal with them.
Andy, if you’re reading this, two things.
And why that’s a good thing!
source: Richard Masoner on Flickr.com
Just like a bicycle built for one doesn’t usually grow into a bicycle built for two, there is not a linear continuum from small company to big company like there is from little kid to big adult. It doesn’t work that way.
Why? Because the business model has an external component: customers. And if you hadn’t noticed, they have a mind of their own. It’s been said, the things you can’t change include the weather and other people. The things you can change include yourself and the oil in your truck.
But the truth is, if your burrito sales max out at lunch time because there just aren’t enough people in driving distance who want your burritos, then making more of them faster, or adding more chairs or a bigger sign won’t conjure up any more sales. Now if the bottle neck is chairs, or how fast you can roll a burrito, then that’s an internal problem and you can fix it.
But if you’ve maxed out the external aspect of your business model, you just can’t grow it any bigger without changing the model. Opening another store to become a chain or selling online would change your model and allow for more growth. But without changing your model, the company won’t grow in size – but it can grow in profit.
Why is this a good thing?
The silver lining is that most really big business models REQUIRE size. They can’t survive at all when they’re tiny. They need life support (in the form of outside investment). And they need to grow really fast. Because of that, competition can often do a lot more harm to a company with a business model that requires growth.
As Ridgely Evers said “A Silicon Valley start-up is completely focused on getting big, and naturally risks failure to get there. A true small business, on the other hand, is focused on becoming profitable, feeding a family, and staying in business. That’s a fundamental psychographic and cultural difference.”
I’ve often said you need to do three things to have your company succeed.
As I was thinking about Evers’ quote, it occurred to me that people who run small companies focus more on number one and two than they do on number three. While big companies put a lot of focus on number three.
The problem is not that small companies don’t grow into large ones – the problem is that if you ignore point number three, your company is not as successful as it could be regardless of its size.
The better you build your organization the more profitable and less frustrating it will become. Building an organization is the true job of a CEO.
It’s a statistical fact that people with bigger feet are better at spelling than people with smaller feet. Why? … They tend to be older!
Sorry for the bad joke, but ask yourself what’s the difference between big companies and small ones?
Did you answer things like: more customers, greater revenue, larger staff production capacity or sales force? Then you made the same mistake as the joke. Not understanding that size is the consequence not the cause.
What do we mean by “Scale”?
Scale has to be understood in context. If you’re a surgeon, or a personal trainer or a voice coach, then your business is a “practice”; and the maximum size you can get is going to be smaller than the maximum size for a company that makes computer hard drives. (It’s also true that the minimum size you can survive at is likely to be smaller as well.)
The same is true for a restaurant or a knitting shop. You can only get so big before you’re serving all the customers who want what you sell and are within a reasonable distance from your shop. You’ve saturated the “addressable market” in business jargon.
Of course, a restaurant can open other locations and become a chain, and the knitting shop can start selling stuff on line. But think how different your day would be as the owner of a knitting shop compared to the owner of an online knitting shop. In the latter case you’d be analyzing your page views and conversion rates. You’d have a shipping department and your business would be open 24/7. You might even need to conduct business in multiple languages.
The difference is not one of size or quantity but a difference of kind or quality. You’re not really in the same business at all. You are (to use jargon again) operating in a different business model.
And that brings us to the difference between a big company and a small one. A big company is one that understands it’s business model and exploits it for maximum size; and a small company doesn’t.
What is a Business Model?
Business Model
Two Kinds of Small Companies
Let me mention that there are two kinds of (small) companies that don’t understand or exploit their business models.
The first is what most companies are like. 50% of American workers work for small companies and most are like this. They actually have a business model, and they operate within that model. They just don’t consciously analyze the model so they don’t know how to incorporate it into their business decisions.
The Devil in the Details
To understand and exploit your business model, you have to know what really drives your customers to buy. Is it price? quality? features – and which ones? convenience? That’s why Ray Kroc (McDonald’s founder) used to say that they weren’t in the hamburger business they were in the real estate business. Their customers bought for convenience and consistency (not quality). So the key to their success was picking the right locations to give their customers the most convenient access to their consistent products.
You have to understand all your internal costs and how to maximize the impact of every dollar you spend. Do you know the cost of lead? The cost to convert each lead to a customer? Whether spending an extra 10K to improve production capacity will improve or hurt your bottom line and by how much?
Scalable companies know these things. And they’re always working to improve their execution of the model in which they operate.
Companies without a business Model
The second group of small companies is exemplified by the newest internet start-up. I’d name one but by the time you read this they’ll be supplanted by another.
But it’s true of any novel invention. Novocaine was invented to be a local anesthetic for military use – but found it’s market in dentistry. Early telephones were wired in pairs. You needed a separate line to the phone of each person you wanted to talk to because the business model was predicated on sending only urgent messages (faster than a telegraph). PayPal started selling cryptography on hand held devices. No one bought it. They tried several other business models before they found that people would pay to transfer cash electronically and that required security which they were good at.
These companies don’t have a business model or rather they haven’t found it yet. So what they should be doing is NOT growing. They should be learning. They should be learning what customers want, how much they’ll pay, how to find and sell to them, and how to do this in a way that makes money. Once they’ve figured that out, then they should grow.
“What’s new since we talked last?” I asked. “Meetings,” she said. “I’m doing one-on-ones with my people, like we talked about.”
She is a client. Her company makes web sites and on-line products for a specialized industry. They’ve got a reputation for high end work, solid market penetration and about a dozen employees. She is the primary sales person and has the most common complaint I hear from business owners: “I can’t find good employees”
The meetings were going well. She was staying on track, learning what people were up against, and heading off complications before they became actual problems. The words were very positive, but her tone was not.
“So?” I asked.
“All these meetings. They’re keeping me from my real work.”
But she was wrong about that. What a small company has in common with a small child is despite their size, they still need all of the parts. So even small companies need three levels of management, someone to do collections, to analyse the numbers, and all that stuff big companies have whole departments for. But being small you don’t need them all full time. So people wear multiple hats. And when that happens, you tend to wear the hats you’re best at or enjoy the most. So my client loves sales and coming up with new product ideas.
Because she’s done a good job in those areas, the company needs more production capacity, and better coordination. So now she must consider management to be her “real job”. By focusing on this (not exclusively but predominantly) she’ll enable others to do more with fewer problems. That’s the real job of building a company. When problems decrease, and productivity improves, she’ll be able to wear this hat a little less and put on another a bit more.
One-on-one’s: Great management tool.
Have one with each of your direct reports.
Meet weekly at the same time for 30 minutes. Never reschedule. It’s that important – it is your real job.
Prepare. They should and you should too.
Don’t solve problems. Or train. Some of that may happen. But if you can’t fit it into 30 minutes along with the other stuff, then you need a separate meeting for training or problem solving.
It’s a time for you to share certain things and learn certain other things. Generally the same kinds of things each week (maybe even in the same order depending on your style) which makes it easy for each of you to prepare.
What to share. Anything the other person must know to do their job better. That’s your role as manager: to help them do their job better. Maybe share what’s happening in other departments so they can interact better. Maybe it’s feedback of how they really made a difference. Share what they can expect from you and the rest of the company; both before the next one-on-one and longer term. You prepare by keeping a notebook around all week and jotting down stuff that you’ll need to share with each person. Then spend a few minutes pulling it together before the one-on-one.
What you should learn. Status: what happened since last time and how that compares to what you expected. Why there’s a difference. What problems they are running into. Their opinions on things. Insights you don’t know about because you don’t live at their desk. Over time, you’ll get a sense of who they are as a person: what motivates them, what puts them off. You’ll get a feel for what they do well and where their limitations are. Make notes about this.
Written take-aways: What each of you will do before the next meeting based. This becomes the status for next week’s meeting. Notes you can use for their annual review. They should take away your impressions of how they’re doing so nothing (I repeat nothing) in their review is a surprise. If it is, you’re not doing it right, but that’s another column.
Trust (in both directions) is a non written take-away.
Beware: You’ll think you don’t have time. But it reduces time spent on interruptions and problem solving. And it’s your real job.
Takeaway:
[tags]management, CEO skills, entrepreneur, small business owner [/tags]
Most of us aren’t in a position to turn the entire economy around. But don’t think you are powerless. Some people look at this situation and see all the negatives. Some people see opportunity. It’s easier to feel the fear and do the cut back thing and blame the economy.
In fact, it’s both the worst of times and the best of times (haven’t I heard that before?) And you’ve got to deal with both. I’m launching a new program to help companies do this called “Tighten Up and Come out Swinging”
Tighten Up to deal with the problems. Come out Swinging to take advantage of the opportunities.
In fact I’ve re-done the opening page of my web site to explain the details. Check it out.
Takeaway:
[tags]CEO Skill, economy, small business, entrepreneur, turn around [/tags]
1. Talk to people – Don’t assume
Talk to your customers
Talk to your vendors and suppliers (Look at point #2 before you do this so you can combine discussions as you see fit).
Talk to investors
Talk to your bankers
Talk to Employees
Talk to your spouse and family
2. Cut back – conserve cash. Think of cash flow before profit.
Do a line item inventory. Go through your P&L statement and stop spending on anything you don’t absolutely need. For everything else, call up your vendor’s and renegotiate.
Cut back on employees last (unless there are some you should have let go anyway – and this is true for many companies)
Cut back on Marketing second to last. The stronger you market in the down times the better position you are in
Cut back on prices as necessary. Understand where your break even is and what your marginal costs are. It may be smart to take some jobs or sell some product just to keep your staff employed. Be flexible.
3. Look for more ways to get more bang for your time (you thought I was going to say buck didn’t you? – you did that in #2 if you were paying attention).
Takeaway:
[tags] CEO, entrepreneur, recession, small business, economic melt down [/tags]
What a dumb question. If you’re a parent, I doubt you’ve ever gotten an answer that comes anywhere near what you’d call satisfactory. And if you’ve ever had a parent, I doubt you’ve given such an answer.
Because it’s the wrong question.
I was reminded of this watching the Republican political convention. For some reason we had on the PBS channel (we usually watch on C-span so we don’t have to listen to pundits) and one of the “reporters” was asking someone in McCain’s campaign about the choice for VP. In case you’ve been under a rock for a week, you know that the pick and how it was handled is pretty big news.
The question was “Did you vet her well enough?”
Why waste prime time asking a question when I know what they’re going to say? I don’t mean I know the answer – that’s a judgement call. But when you’re a reporter talking to someone in the campaign, it’s the wrong question. She should have asked “When did the campaign first learn about xxxx?” or “How many people were interviewed in the vetting process?” or any number of factual questions which would give more of a hint at the vetting process, especially when you can see if the person avoids the facts.
So what does this have to do with running your business? Simple. Asking the wrong question will make you think you have an answer when you don’t. If your kid says “School was fine” does that mean it was? Maybe, maybe not. It probably means they don’t want to talk about it anymore.
There are lots of questions you want to ask of prospects, of customers, of employees, of suppliers. But if you don’t ask the right ones, you’ll think that school really was fine. And the risk is you’ll be wrong and not know it.
Takeaway:
[tags]business, entrepreneur, parenting, school, CEO skills [/tags]
“Never Give Up” I’m always a big fan of Inc Magazine, but when they had this advice on the cover I had to say something.
It’s not that you should give up – it’s that saying “Never Give Up” makes it sound like success in business is entirely under your control. It’s not. Success is based on what you do plus how people respond to what you do then how you adapt to how people respond and what they do about that and so on. Of course, if you give up too soon you’ll miss all the shots you never take as Gretzky said. But what if you give up too late? They don’t run stories or write books about people like that. Except maybe Seth Godin and The Dip.
Take my favorite business analogy: Courtship. There are people who are in a wonderful relationship today because one of them refused to take no for an answer. But there are also people in jail for stalking (or worse) because they refused to take no for an answer. Persistence has its place but it’s only part of the equation. All too often persistence (like love) is blind.
Best Business Advice?
Understand. Learn what motivates your customers. Learn the ins and outs of your business model. Learn what gems of knowledge are hidden in your finances. Learn what makes your employees tick. Learn the difference between being lucky and being smart – then be both. Now put all that understanding into the right action at the right time. But that’s a bit more subtle and it sounds like a lot of work. Because it is. That’s why business success is worth celebrating. If it were easy, everyone would do it. And no one would be left to work for you.
Takeaways:
[tags] Entrepreneur, small business, CEO Skills, management, Persistence [/tags]
Probably Never. When you’re on a winding road with lots of potholes and a strong wind, you grip the wheel tighter. But even on a smooth highway, you can’t just let go of the wheel and start typing on your Blackberry.
So what does this mean to you? The number one complaint I hear from entrepreneurs about employees is that employees just don’t get it. What I think that means is that entrepreneurs just don’t get it.
Get what? Get that their job is to keep employees moving in the right direction. If the employees knew how to “get it” or what the “right direction” is they’d be working for themselves right now. The reason yours are working for you is that they need that constant reminder of where the company’s heading.
Obviously when things are tough you’ve really got to keep a grip on the wheel. But just because things are going well doesn’t mean you can go “hands off”.
To switch analogies – it’s how you coach a winning sports team.
It’s hard to build a sports dynasty because winning players have a tendency to feel they’ve made it and then slack off. The coach needs to keep them moving forward just as hard.
Takeaways:
First image from http://www.flickr.com/photos/bob406/487249298/
Second image from http://www.flickr.com/photos/19783530@N00/1779549245/
[tags] Entrepreneur, manager, CEO, Small business [/tags]
Animal trainers have a saying “It’s never the animal’s fault” Because animals don’t speak, trainers need to find non-English methods to communicate what they want. If the animal doesn’t perform, they try to find a better way to communicate, they don’t blame the animal. It helps to take this approach with employees: if they don’t do what you want, think of how you can change what you’re communicating, how you’re following up, what incentives you’re using to reward results.
Most people react to that last sentence with something like: “But they’re people not animals and they do speak English and what’s more they’re adults. They SHOULD be able to do what I say.” So true. So true, and yet so remarkably ineffective.
Whenever you find yourself using the word SHOULD with another person in a fit of frustration take it as a sign to change your behavior not theirs. Your behavior is the only one you can control anyway unless the other person is small enough that you can pick them up. You can influence others not control them and only by changing your behavior.
I was talking to a client today who runs a small office: himself and four others. He’s so mad a two of them that he’s thinking of making it an even smaller office: himself and two others. And he’s got a right to be mad. They did some really stupid stuff recently. And so he’s upset with what they SHOULD be doing differently.
Taking my own advice about the SHOULD word, we looked at how he was communicating, and realized that he was not being much of a manger. If employees didn’t get it right the first time he said something, he never followed up. When it wasn’t done right, he either did it himself or let it go undone. Of his four people; one of them usually gets it – she’s been with him for decades. The others do most of their jobs right most of the time, but not always. And the company’s in a tough market right now. He’s been asking them to do different things to move the business forward. And for the most part they don’t. They stick with what they’ve always done and even though it’s slow and they don’t have as much work as they can handle, they don’t do the extra stuff.
Of course they SHOULD; but there’s that word again. So we talked about what he could do differently as a manager – what level of detail he needed to explain his request and how often he needed to follow up, and what incentives or consequences he could put in place.
And we talked about if he even wanted to bother. It would be much simpler to cut back and only have two employees. I still don’t know the answer to that one yet – he’s going to think about it.
If I may change analogies, let me tell you that when I was single and I lived alone, I never cooked. As much as I loved to eat, the cooking part was not something I wanted to spend the time doing or learn how to do well. After I got divorced I cooked, because I wanted the kids and me to have dinner time together. But I still didn’t put a lot of time into learning the nuts and bolts of cooking. I got a few meals down, and could follow a recipe or three and it was good enough. Now I’m married to a wonderful cook. She loves to eat as much as I do – maybe more. But she’s willing to actually be a cook. Not only can she follow a recipe, she can augment or even invent one. And her technique is outstanding. Of course she puts a lot of time into it, and she loves it. So why am I telling you this?
The situation with most entrepreneurs is they want to eat really well but they don’t want to learn the nuts and bolts of cooking. By that I mean they want the benefits of a well managed workforce, but don’t want to learn the techniques of managing, or put the time in to actually do the work of being a manager.
Here’s what it takes to manage: Direction, Support and Monitoring.
Here’s what too many entrepreneurs think is management:
For direction, they provide the vaguest set of directions in the fewest words, almost never written. “Hey, somebody just called from the Framus company about our account – handle if for me will ya?”
For support they never figure out what the employee needs and give it to them. Instead they expect people to get it done with stuff that costs less than it did last time. And what they do provide only shows up if the employee asks for it – hounds may be a better word than asks.
As for monitoring? They don’t check back till after the deadline’s passed and they get real mad if it isn’t done right.
A better manager handles it this way:
1. Direction. First you have to know what results you want. You have to describe them in terms of deliverables or behaviors (not attitudes). Think of what would happen if aliens flew their UFO into your facility at night and did the employee’s job perfectly. What would be different when you came to work in the morning? That’s what you need to describe to the employee. Until you can describe these results in detail, don’t try to manage anyone, spend your time describing results.
2. Support. Your next job as manager is to provide the employee with everything they need to do their job. This includes training, facilities, tools and equipment, time, reasonable expectaions and other people to provide the parts that they can’t do. Motivation and recognition is also part of support. Different people need various amounts at different stages in a given job.
3. Monitor. Employees should know how they will be monitored. If you did a good job giving direction they’ll be able to monitor themselves and come to the same conclusions you do about their performance. But you need to do it more frequently than you think – especially when you’ve given someone a new assignment with changes their routine or they’re doing something they’ve never done before. You need to see how they’re doing in time to make changes and corrections and give more support before the stuff hist the fan. That way you can both be successful.
Takeaways:
[Tags] Management, CEO Skills, entrepreneur, small business, manager [/tags]
I got the blue plastic tub for free and turned it into a garbage can because it used to hold car wash soap so I didn’t want to use it for a compost bin and we turned the old garbage can into a compost bin. Do you know how much money they want for a compost bin?!?!? But I digress.
So the first time I used the blue tub for garbage it they refused to take it. I asked around and someone said it was over the limit. “What was the limit?” I asked and was told “It has to be able to be lifted easily.” A very logical limit. Also a very stupid one. Can you imagine the arguments and even law suits the city would get into if their limit was so vaguely defined? They’d have arguments from customers, from sanitation workers, from people who didn’t get hired as sanitation workers and even from their workers comp insurance company.
So I looked it up. The rules are: Can no larger than 42 gallons weighing less than 60 pounds, the garbage has to be bagged and the lid of the can cannot be hinged. My can violated 3 of those rule. I didn’t do my job. And the sanitation workers just didn’t take it. No fuming or yelling, no covering for my lack of performance. They just did their job and moved on. I’ve seen them be lenient about the hinged lids and also about the no bagging rule many times in the neighborhood which I appreciate, but I don’t begrudge them their decision to enforce the rules in my case.
Why am I telling you this?
This blog is supposed to be about business – your business – not my garbage problems. The point is that I’m familiar with too many business where the performance standards (rules if you will) are vague, even if they are logical. Things like “able to be lifted easily” which begs the question by whom? And how easily? For the record, I’m a middle aged, overweight guy who doesn’t work out and even I can lift that blue can easily, but I don’t want do to their job.
And so there is a lot of confusion and frustration in the work place about whether someone is doing their job properly. My garbage man and I have no such disagreement. My job is to put the trash out by 6AM on Wednesdays, bagged in a can less than 42 gallons weighing less than 60 pounds and his job is to take it away. The end.
Takeaways:
[tags] entrepreneur, small business, CEO, Management [/tags]
Dan Pink turned me on to this post by a guy named Jason and this one by Mark Cuban (at least I’ve heard of him) with tips for start-ups. I was mildly distressed by the focus on tech and software companies. What about an old school company that makes stuff out of atoms not bits? Not that some of their ideas don’t apply but here’s some that they missed.
This post is not about what you think. It really is about business. First a little background. I started a company in 1991 when I lived in Texas. Two years later I moved to Connecticut but the company stayed Texas. I’ve run it long-distance as a “remote control CEO”. I had to systemize the business to work like this and that’s what laid the ground work for my coaching other entrepreneurs to systemize their companies. About four years ago my wife took over and has done a wonderful job. She is much more of a people person than I. Here’s an illustration of that.
We have a system for tracking our sales efforts (number of calls, follow ups, contracts sent out etc) and our results. One of the guys in our fulfillment department quit and they decided not to replace him, figuring the people in the front office could fill in. This month, sales are down 33% from last month. That sounds worse than it is: we keep client for years and only get about 10 new ones a month (and we generally loose about 10 as well) so sales went from 9 to 6 and it so happens we only lost 6 so we’re even. But still 33% down is not the way you want to go.
My wife could tell from the sales tracking system that the number of contracts sent out was about the same as last month but the number of follow up calls was way down. And she could tell from the timing of when the calls were made (or not) that it’s because the people in the front who are now filling in in the back are letting the follow up calls fall through the cracks.
So what does she do? She goes over these numbers with our general manager and says basically “You see the problem? I’ll give you the month of April to fix it and if sales don’t come up we’ll have to do something different”
What would I have done? As a typical entrepreneur, I would have said that it’s OBVIOUS that the guy who left needs to be replaced and I would have been frustrated as hell that somebody didn’t see this coming half way through the month and waited till I saw it at the end of the month and I would have wanted changes made right now.
Which way is right?
What? You think I’m going to say my wife is wrong – all over the internet? I may be dumb but I’m not crazy. And I like to think that I’m not a typical entrepreneur anymore. There are three things to think about.
1. A typical entrepreneur’s approach only works if you’ve instructed people how to analyze the numbers and told them that it’s their job to do so and how frequently you want them to do this and how to come up with solutions to the problems they uncover when they analyze the numbers. If you’ve done that and put people who have that skill in the right positions then you have the “right” to be frustrated when they don’t do their job. In my experience most entrepreneurs don’t do any of this, but they still want the results of having done it.
2. My wife has never done this, and given the way responsibility is assigned in our company she has no intention of doing it. She’s keeping the job of analysis and problem solving on her desk. So her way is perfectly suited for our company – even though it’s slower than what a more typical entrepreneur might want.
3. I’ve given you a bit of a red herring by talking about the typical entrepreneur the way I have. If my experience of coaching entrepreneurs since 1994 has given me insight to what’s typical, the typical ones don’t even start to measure things to the degree that we do. So they would have no idea why sales were down. They’d just be upset when they saw the decline. So what appears to be slow as I tell this story (taking a month to see the problem and another month to fix it) is actually fast compared to what usually happens. (A month to see the problem and several months fuming about it while casting about for a fix – and maybe never uncovering the real cause). Because we’ve always measured a lot of stuff in our company, and always looked to find the root cause of any problems, not just the immediate solution, I don’t think I’m the typical entrepreneur.
Takeaways:
[tags] management, entrepreneur, small business [/tags]
I mentioned this before but I don’t think I gave it the focus it deserves. The focus it deserves is actually in this New Yorker article and a shorter one in Fast Company.
But consider this key quote
If someone found a new drug that could wipe out infections with anything remotely like the effectiveness of Pronovost’s [check lists], there would be television ads with Robert Jarvik extolling its virtues, detail men offering free lunches to get doctors to make it part of their practice, government programs to research it, and competitors jumping in to make a newer, better version.
The article focuses on checklists to improve outcomes in hospital intensive care units. But has examples of their use in other fields, with results just as impressive.
Why They are Unappealing
But just like the timer, a checklist is so mundane we feel funny using it. We think it will dehumanize our workers or our work. In my opinion it does the opposite. For two reasons.
Would your business benefit from consistency? Best Practices? Courage? Wits? Improvisation – what I’ll call creativity? If so then I’d propose that management’s primary job is to create check lists and make sure they are used properly.
Takeaways:
[tags] best practices, entreprneur, check list, productivity, small business, management. CEO [/tags]
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