Tag Archives: Delegate

How Do You Create Consistent Business Operations? Seven Thoughts

Situation: A CEO is concerned that business operations are inconsistent. Employees are always coming to her for answers instead of working things out themselves. As a result, the CEO is continually focused on operational details as opposed to strategic direction. How do you create consistent business operations?

Advice from the CEOs:

  • Make managers live up to their titles.
    • Require them to go to each other to solve problems first, instead of always asking the CEO.
    • When they ask a question, don’t give them the solution, but advice on how to solve it.
    • Require them to present solutions vs. problems
    • Be willing to spend money on their solutions.
  • Answer all questions with questions.
    • Ask them for their recommendation.
    • Keep asking until they come up with the answer.
  • When one starts to delegate, it hurts for a while but will work itself out.
  • The CEO should not be doing “regular jobs” that are really employees’ responsibilities.
  • How has implementing these suggestions impacted other companies?
    • Businesses have become more diversified.
    • CEOs are focused strategically vs. tactically.
    • Businesses are more successful and profitable.
    • CEOs enjoy coming to work again.
  • Create a sales intern program.
    • Hire 4 sales interns for $10-15/hour – with the offer that after 3 months there will be full time jobs for those who prove they can sell.
    • Have the top 4 sales staff design the intern program – call response scripts, responsibilities, etc. – subject to CEO review and approval.
    • Assign one intern to each of these 4 sales staff in mentor/mentee relationships. This will demonstrate the capacity that each has as a sales manager.
  • Should younger workers be handled differently?
    • Allow flexibility – where appropriate – on hours and how they do their jobs.
    • Responsibility will also vary by pay level – higher pay equals more hours and more accountability.

How Do You Evaluate an Acquisition? Five Points

Situation: A CEO is evaluating an acquisition which could significantly contribute to his company’s financial position. Patented technology may add value to the deal. The founders of the acquisition target are willing to work part-time to facilitate the transition of their technology to the acquirer. How do you evaluate an acquisition?

Advice from the CEOs:

  • Set a timetable to close the deal or walk.
  • Two key factors in the due diligence process will be strength of the intellectual property and cost of the acquisition long term.
  • Another key factor to evaluation will be how this opportunity fits into the company’s larger financing plan. Currently the company is undertaking a financing round. How much will this acquisition contribute to or distract from the financing round?
    • If this is a primarily a value-add opportunity, will it add to the larger financing round?
    • Can the larger financing round be completed on time while pursuing this opportunity?
    • An option is to negotiate a white label agreement – an agreement that will keep the company in the game while completing the larger round.
    • If the founders are not amenable to a delay, what is the cost in terms of funds and effort versus the larger round.
  • The technology appears interesting, but the timing is bad given your need for the larger financing round. Here’s an option.
    • Go to the founders and start the discussion. Secure a license or hire their programmer. Let the technology go dark until the financing round is completed.
    • There is value here – but do this as a side focus if it’s not too expensive. Assure that the deal includes both rights and the underlying algorithms.
  • Delegate this to someone else in the organization. The CEO’s focus is the larger financing round.

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How Do You Maintain the Passion for Your Business? Six Thoughts

Situation: The CEO of a company is finding it increasingly difficult to maintain the passion that she had when the business was young. Day to day work feels like having a monkey on her back with too much time spent on sales and business minutiae. Too little time is spent on strategy and growth. How do you maintain the passion for your business?

Advice from the CEOs:

  • Look at what you like and don’t like – delegate what you don’t like.
    • Delegate activities which are inappropriate for a top executive – like answering the telephone when others are present to do this.
  • Get everybody in the same boat – get them rowing in unison.
    • Delegate more responsibility – with the understanding that others will make mistakes. When they do, they must understand their responsibility for repairing them.
    • Prioritize tasks as they are delegated to reduce conflict or confusion.
  • Strengthen relationships with key suppliers and customers. This is a strategic move to reduce future risk to the company.
  • How did you get the monkey off your back?
    • Ask managers and employees for their input – have them develop solutions. If they push back that they don’t know how or don’t have the resources, let them know that their job is to provide solutions, not just to identify problems.
    • This takes time and patience, but if the CEO is steadfast this can yield results in a surprisingly short period of time.
  • Reduce time spent on sales. Become the closer – the only person who can do that little something to close a sale.
    • Have the others do the heavy lifting our qualifying the customer, developing the solution, crafting the proposal and presenting this to the customer. Limit the CEO’s involvement to reviewing the proposal prior to presentation, and to acting as closer ONLY if sales can’t do the job themselves.
  • Learn to take time off – develop other interests. This is the first step in being able to take longer periods of time off.

What is Your 3-Year Plan? Six Suggestions

Situation: A founding CEO wants to cut back to 1-2 days per week with someone else overseeing day-to-day operations. Her timeline to accomplish this is 3 years. Currently she splits her time between engineering and sales support, managing operations, overseeing the CFO and managing the company. How do you accomplish this transition? What is your 3-year plan?

Advice from the CEOs:

  • Advertise for and hire a General Manager/engineer who can understand the company’s applications and develop unique solutions.
  • Advertise for and hire an understudy for the sales person. This could be someone in their 40s who is experienced, and who can act both as the sales person’s back-up and develop additional accounts to diversify the business.
  • As the company continues to grow it will take more time and effort to manage all the activities. Plan the company’s organization chart and infrastructure to account for this.
    • Be careful not create an infrastructure during good times that is unsustainable during down times.
  • As the new GM gains familiarity with the company, this individual will and should start to take control. This automatically means that the founding CEO will have to agree to release some of her control. Prepare for this.
  • Consider several alternatives for the GM:
    • Super President – $400K.
    • GM with engineering talent – perhaps a consulting or engineering sales background. Hire at $150-200K and develop into the President.
    • Given the 3-year lead time this individual could be a Technical Lead or Project Engineer. The objective will be to develop a very talented person into the GM or President. This alternative opens a larger pool of talent, at lower initial cost.
  • Where are these people found?
    • Trade association contacts.
    • A high-quality engineer that another CEO won’t be hiring over the coming months. Talk to friends and industry contacts.

How Do You Stay Focused When It’s Busy? Five Points

Situation: A CEO and his COO find it difficult to focus on core tasks when business is booming and everyone is busy. The company is small but has been very successful. However, the pressure of simultaneously attending to key customer relationships, training new people, and formulating plans is overwhelming. How do you stay focused when it’s busy?

Advice from the CEOs:

  • If the CEO and COO are doing a mix of corporate and project tasks, the first step is to delegate so that top staff focus on strategic areas rather than execution.
    • Over the next week, keep a record of what the CEO and COO are doing. At the end of the week sit down and determine which activities were corporate activities, and which should have been delegated to staff.
    • As an example, training of new personnel should be a key role of someone else. The CEO and COO will be involved, but only tangentially. The bulk of onboarding should be handled by staff.
    • Similarly,restrict sales activity of the CEO and COO to high level discussions and decisions.The rest should be handled by sales staff.
    • What must the CEO and COO be involved in?  Intellectual property development, high level decisions about new service offerings, high level decisions on business expansion opportunities, and occasional oversight of company operations.
  • It is important to focus. The first priority should be the company’s principle revenue stream.
  • The second priority should be new service offerings which are central to efficient delivery of the primary revenue stream.
  • Meet with top staff and develop a five-year vision. The order of priorities that are developed will determine where to focus.
  • In the process of developing priorities, ask the following questions:
    • What do you love and what do you need to love?
    • Analyze the comparative importance and urgency of each activity of the CEO and COO. Which require top level input, and how much? Which are better delegated to staff?

How Do You Transition from Doer to Leader? Four Suggestions

Situation: The Founding CEO of a professional services company has always been deeply involved as a service provider and rainmaker in addition to his role as CEO. As the company has grown he sees the need to spend more time as leader of the company instead of being a doer. What can be done to facilitate this transition, and what expectations need to be created? How do you transition from doer to leader?

Advice from the CEOs:

  • Another CEO removed himself from day to day business development activity by bringing in a new rainmaker. These were the adjustments made to facilitate the process.
    • During the first year he worked with the new individual in a team or partnership role.
    • Compensation was results-based. Discussion of equity consideration was deferred until the individual proved herself.
    • The CEO moved himself out of the individual contributor role except as needed to support the new rainmaker’s efforts.
    • All of this was accompanied with clear communication to clients: “this adjustment will provide better service to you; here’s my number if you need help.”
    • Rainmakers are a different personality type. To be most effective, they must be able to say “my team.” Allowing this will ease the transition and improve the relationship.
  • Create teams to deliver solutions that have traditionally been provided by the founder.
    • Identify skill sets behind the roles that are being delegated.
    • Build an organization that will fill these roles.
    • Participate in team meetings, but as an advisor rather than as principal decision-maker.
    • Adapt role and behavior in phases to ease the pressure of the change on both the CEO and the team.
  • How does the CEO manage his own expectations as well as those of the company as he makes this transition?
    • Delegation initially takes more time and effort than doing the work yourself. Be patient and let the investment pay off.
  • Larry E. Greiner of USC was an expert on the study of organizational crisis in growth. Per Greiner’s model, the company is currently at stage one – moving from principal and founder to initial delegator. It may be a useful to study this model.

How Do You Manage Culture as You Grow? Six Solutions

Situation: A tech company has grown to twenty people. The CEO is concerned that if they grow much beyond this their culture will start to change. The principal question is whether team leadership structure will remain tight and focused, while teams will continue to be flexible and have fun. How do you manage culture as you grow?

Advice from the CEOs:

  • Other companies have grown to twice this size and continue to increase their number of employees.
    • One uses component owners as leads, with people under them. Leads are more technical than managers and aren’t expected to be superb managers.
    • They grow middle managers organically instead of hiring from outside.
    • If an individual’s plate is full, give them the ability to delegate work to an up and comer.
  • Active communication has number limits.
    • The optimal functioning group is 7-12; higher functioning teams are even smaller with 7-8 members.
    • Create flexible teams that maintain communication pathways and culture.
    • Consider using reconfigurable space.
  • When one company grew from 25 to 60, they noticed that at 30 people it became difficult to track people; they needed to develop systems and internal management tools.
    • Much more attention was needed on sales forecasting and expense elasticity. The solution was to study peaks and valleys and built a model that could function within historic peak /valley limits.
  • How do you maintain the contractor pool?
    • Keep a list and actively communicate with them about current and anticipated needs.
    • One company’s rule: consultants are 100% billable – functionally they are only able to realize 98%, but the rule keeps this number high.
  • Use contractor pools to supplement project tasks. If your primary differentiating focus is on successfully closing projects, focus contractors on ramping new projects.
  • Hire people who embody you and your culture. Hire in your own image.

How Do You Scale with Scarce Talent? Four Factors

Situation: A software company relies on in-house expertise to both position itself and come up with unique solutions to clients’ problems. The CEO wants to significantly scale up the number of clients served per year. The challenge is that it is difficult to find software engineers who are experienced in a wide range of code languages. How do you scale with scarce talent?

Advice from the CEOs:

  • Start by looking at the load carried by your current employees. Do they have the capacity to significantly increase the number of clients that they serve? Do you have sufficient back-up to serve existing and new clients should something happen to a key employee? It’s one thing to have ambition to expand, but another to assure that you have the capacity to serve both existing and new clients.
  • Take a close look at your org chart.
    • What happens and where are the exposures when you double the current service volume? Where will the greatest stresses occur? These are the first areas in which you should start to build redundancy.
    • From an HR standpoint, you need a leadership development plan that extends down your organization chart. Use the stress analysis just mentioned to identify the areas in greatest need of additional resources and leadership development.
  • Look for areas where you can off-load current responsibilities to support staff to increase the capacity of your current talent. This increases potential capacity as well as the overall value of the company.
    • The lack of redundancy may prove to be detrimental to your ability to attract new large clients. Large potential clients and partners will use whatever means they have at their disposal (including stealth visits to your offices by local reps) to vet your organization before they make a commitment to you.
  • New client and partner relationships are like new product introductions.
    • A few early adopters will jump on your opportunity.
    • Many of the most established clients or partners will sit on the sideline to monitor the experience of early adopters.
    • If you trip in your service delivery early in your scale-up, most of the remaining targets will be slow to support your offering.
    • Count on the first two years of building additional clientele to be very intensive. It will distract you from many of the functions you perform today, unless you have additional personnel to support this.

How Do You Create Consistency in a Business? Six Suggestions

Situation: A CEO feels like he is on a roller coaster ride with unpredictable revenue and processes month to month. His ideal outcome will be to be able to go on vacation for 4-6 weeks, and have the business running better when he returns than when he left. Have you managed to achieve this? How do you create consistency in a business?

Advice from the CEOs:

  • Make your managers live up to their titles.
    • Insist that they go to each other to solve problems first, instead of always asking you.
    • When they ask a question, answer how to solve it – but don’t give them the solution.
    • Require them to present solutions rather than problems.
    • Be willing to spend money on their solutions.
  • Answer all questions with questions.
    • Ask them for their recommendation.
    • Keep asking until they come up with the answer.
  • You should not be doing jobs or tasks that are really your employees’ responsibilities.
  • When you start to delegate, it hurts for a while but it will work itself out.
  • What has been the impact on other companies when they’ve made these changes?
    • Businesses have become more diversified.
    • CEOs are focused strategically vs. tactically.
    • Businesses are more successful and profitable.
    • CEOs enjoy coming to work again.
  • How do you work with younger workers, millennials?
    • Allow flexibility – where appropriate – on hours and how they do their jobs.
    • Responsibility will vary by pay level – with the understanding that higher pay equals more responsibility and most likely longer hours.

How Do You Make Time for Priorities? Eleven Recommendations

Situation: A CEO is building a new company. She has a small, highly qualified team, and much of the work is hands-on. In addition, there is fund raising to support the venture. The CEO also makes time for exercise and keeping in shape. With all of this on her plate she is getting overwhelmed. How do you focus on priorities in an early stage company? How do you make time for priorities?

Advice from the CEOs:

  • Maintain your exercise and health – this makes everything else easier.
  • Decide on your strategic platform. This creates a larger conceptual framework and helps to clarify priorities.
  • Identify the gating items. Focus effort here and spend scarce resources strategically to push your goal.
  • Within your gating items, identify the factors that make you scalable. Focus most of your effort here.
  • Create a weekly focus.
  • Lay out your to-do list in a Covey quadrant – most and least important vs. urgent and not urgent. Review this weekly to eliminate or delegate less important priorities.
  • Operational issues are usually symptoms – identify the causes and fix them.
  • Daily, list what you’ve done. Look back every 1-2 weeks and assess how you spent your time. Eliminate time wasters.
  • Don’t let you passion be undermined by the drudgery.
  • As an early stage company, you have to react – understand and appreciate that some aspects of early stage company life will not be very strategic.
  • Fix things rather than adding people and complexity. This compliments Fisher’s Stages of Growth recommendations for a company of under 11 people.