Category Archives: Leadership

Growing Pains

From the Ask Tom mailbag –

Question:
As the CEO, I am stretched a bit thin. I have 10 direct reports, with the prospect of adding two or three more as we continue to grow. I have 1-1s with each manager for 60-90 minutes twice a month, but it leaves little time to spend as CEO. I feel a bit like I am pulled into the weeds.

Response:
Your company is too big to be little and too little to be big. Your company is in No Man’s Land. You have enough resources (budget) to make the hires necessary to relieve a bit of pressure, but these are critical hires, you don’t want to make a mistake, so you continue stretching. There is only one way out.

You have to build the infrastructure of your executive management team. You cannot work longer hours. You cannot work harder. You can only spread the burden.

This is a dilemma first faced by every entrepreneur startup, where the Founder makes all the decisions and solves all the problems. As the organization matures, what happens when all decision making continues with the Founder? What happens when all problem solving continues with the Founder? The speed of decision-making, the speed of problem solving slows down, sometimes stops.

You managed to get out of startup, but your inclinations continue. Others, I am sure, have told you that you have to let go. No.

You have to delegate. This is not a task assignment. What you have to delegate is decision making and problem solving. The most important thing you can do, as CEO, right now, is to build the infrastructure of your executive management team. If you cannot do this, you will end up with 13-15 direct reports and you will still wonder why you are stretched so thin.

What Did You Train Them To Do?

“But, my team never comes up with any constructive ideas to solve the problem,” Edward explained. “I ask them to think about the problem at hand and they just sit there, waiting.”

“How long has this been going on?” I asked.

“Not long after I arrived at this company. As the incoming CEO, I was briefed about this executive team. I was told they were bright, action oriented, made solid decisions. But, that’s not what I see. I wouldn’t call them dolts, they would never have gotten this far, but day to day, I feel like the quarterback who has to constantly scramble.”

“How have you contributed to the problem, meaning, how have you contributed to the team’s lack of constructive solutions to problems?”

“Now, don’t think you are going to pin this on me. I didn’t hire these people, they were here when I arrived. I am the same person I have always been,” Edward was firm.

“I want to take your description at face value, that at some point this executive team was bright, action oriented and made solid decisions. If they were once that way, what changed?”

“You are still looking squarely at me,” Edward replied.

“You’re the only one in the room,” I waited. “Think back to your early interactions with this team, tell me what happened in the first couple of meetings.”

“Well, the first couple of meetings, I was just sizing them up, seeing who was strong, who was weak, and where we could make improvements. I call it diagnostic work.”

“And, what was your diagnosis?”

“There must have been a reason I was hired in to take over from the outgoing CEO. This team was okay, but needed some firmer guidance and direction.”

“And, if you see those first few meeting as a training session, led by you, what were you training them to do?” I wanted to know.

“They needed to look more clearly at their mistakes and listen to me, to help guide them to make better decisions.”

“And, isn’t that what you have now trained them to do?”

Not Warm and Fuzzy

From the Ask Tom mailbag –

Question:
I have been reading a couple of books on Servant Leadership. It makes sense, but seems kind of warm and fuzzy. I am not necessarily a warm and fuzzy person.

Response:
So, let’s shift your viewpoint of Servant Leadership from a warm and fuzzy concept to getting some work done. If you read this blog, you know I define work as problem solving and decision making. In your role, as a manager, you have a team to perform some organizational function (marketing, sales, account management, ops, quality control, research & development, HR, accounting). In the work of your team, they have appropriate problem solving and decision making. When things are stable, your team can manage all the routine problem solving and decision making.

And, when things change, and the level of decision making creeps up, sometimes they struggle. And, that is where you come in, as the manager. It is your role to bring value to your team’s group and individual problem solving. You do not do this by telling people what to do, you do this primarily with questions.

So, the concept of Servant Leadership has little to do with warm and fuzzy, everything to do with decision making and problem solving.

Not the Surrounding Circumstances

I woke this morning, looked around to see. This new normal is emerging, funny that today looks a lot like yesterday and I anticipate that tomorrow will look a lot like today.

Five months into this journey, things have changed. And, our ability to react, nay respond, nay adapt depends not on the surrounding circumstances, but on us.

What have you learned in the past five months, not about the world around, but what have you learned about yourself?

Bring Value to Problem Solving

“What were the specific things your manager did that brought value to your problem solving and decision making?” I repeated. “We have already established that it is not barking orders, bossing you around or yelling at you when you screwed up.”

Kim had to think. She could easily tell me all the bad experience with previous managers, but, thinking about positive experience was much more difficult.

“There was this one time,” she started, “where I was working on a problem and I had no idea what to do next. After an hour thinking about it, I finally went to my manager, who I knew had all the answers. I expected to have the best solution right away, so I could get on with my job.”

“Apparently, that’s not what happened.” I said.

“Not at all. My manager asked me to describe the problem, asked me what I thought was causing the problem.”

“Sounds reasonable,” I agreed. “Your manager couldn’t give you the solution without understanding the problem.”

“Then, she asked me what the alternatives might be. She said I was closest to the problem, I probably had an idea how we might be able to solve the problem.”

“You said you had already been thinking about it for an hour and couldn’t come up with anything.”

“Yes, but that is because I was trying to come up with the perfect solution. My manager wanted a bunch of alternatives even if they weren’t perfect.”

“And?”

“Since I wasn’t looking for the perfect solution, I had four or five things that might work or might not work.”

“So?”

“So, my manager asked me, of all those alternatives, which had the best chance? Actually, I think they all would have failed, but if I put solution number two with solution number four, then it might work. So, she told me to go and try it, so I did and it worked.”

“So, your manager did not give you the answer. Didn’t tell you what to do, didn’t boss you around or yell at you?”

“Nope. Just brought value to my problem solving by asking questions.”

Not in the Job Description

Across the lobby, I spotted Kim. Out of seven supervisors, she had just been promoted to manager. She had a good team, positive vibes, but I could see Kim was a bit nervous in her new role.

“How’s it going?” I asked.

“Pretty good, so far,” Kim replied. “I think I can handle all the stuff I am supposed to do. It’s that other stuff, I am worried about.”

“What other stuff?”

“Team stuff, morale, the stuff not in my new job description. You talk about bringing value to my team. I want to do that, but I am not sure what it means.”

“It’s not that difficult,” I replied. “Just think back, when you were a supervisor. What did your manager do that really helped you, I mean, really helped you become the manager you are today? Was it barking orders at you? Bossing you around? Yelling at you when you screwed up? Solving problems for you?”

“No,” Kim replied. “It was none of those things.”

“So, think about it. What were the specific things your manager did that brought value to your problem solving and decision making?”

What Are You Working On?

“What are you working on?” I asked.

“Just trying to finish this project,” Andrew explained.

“What’s the hold-up?”

“Things always move slower than I want. You know, getting my team to push things along.”

“And, when things don’t move fast enough, how does that make you feel?” I pressed.

Andrew smirked. “A little annoyed, impatient, anxious.”

“Anxious, about what? It’s just a project.”

Andrew nodded. “Yes, it’s just a project. But, it’s my project. I know I have to work through my team to get it done, but ultimately, it’s up to me.”

“So, it’s not just a project? It’s about you?”

“Yep, on the face of it, the project has a spec, it has a budget, it has a deadline. But the project is also a test about me. Can I organize it? Can I gain the willing cooperation of the team? Can I put a sequence together to keep us on track? If we get off track, how quickly do I see it? Will I know what to correct? Can I keep the team pulling in the same direction? It’s more than just a project. It’s more than just the team. Do I have what it takes to be effective?”

Clumsy at First

Last week, I published the following excerpt –

Those permanent adaptations will seem clumsy at first, just not the same, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Now, a list of questions, from which I would like to get your response.

  • In your business, what have you learned over the past month, that you did not know before?
  • In your business, what changes have you made out of necessity?
  • In the changes that you have made, what might become permanent?
  • How are you practicing those new things, to become competent in those new things?
  • In your business, what is likely never to return?

Post your comments, I am curious. -Tom

This is Not Nuclear Winter

As a business owner, three things to monitor.

  • Cash
  • Revenue vs Expense
  • Balance Sheet

Cash
Cash is king. And, only cash is cash. Accounts receivable isn’t cash, inventory is not cash, only cash is cash. You are going to need it. Preserve cash, tap your lines of credit, apply for government backed loans and grants.

Revenue vs Expense
Your monthly cash flow statement might need to be a weekly cash flow statement. Most accounting systems have embedded cash flow statements, but they don’t look forward very well. Try this simple one.

  • Cash Balance
  • Anticipated cash during the period (month, week) from revenue sources and accounts receivable.
  • Anticipated expenses during the period (month, week) including payroll, rent and any other necessary expense.
  • What’s left? If it’s positive, that’s good. If it’s negative, that is your burn rate.

Your burn rate will eat your cash, so how much do you have in cash reserves to cover? Without modification in payroll, paying your rent, paying your vendors, how long can you last?

Balance Sheet
Most businesses can get their expenses underneath their revenue. It’s painful, but has to be done. It’s not the profit/loss that kills most companies, it’s the balance sheet. It is mortgages, institutional debt (term loans) and covenants that go with. Make sure you know your banker, high quality communication early will help. Your bank will usually put you out of business before your landlord or your vendors.

Make sure you have your survival plan in place.

Trouble in River City

In the midst of Covid 19, we had an earthquake (5.7) yesterday here in Salt Lake City. As we look forward, evidence of economic contraction is appearing, for some, aggressively attacking. This is not a time for panic, but a time for rethinking.

Lee Thayer, (Leadership 2004), speaks about necessity and its importance in the workplace. The entrepreneur, who starts a business, only puts in place that which is necessary. Only necessary equipment is purchased. Only necessary people are hired.

As time advances, and the business becomes more complex, necessity becomes more complex. And management decisions are made to bring on more infrastructure to support that complexity. Sometimes those decisions are accurate; sometimes those decisions miss the mark.

During this rethink time, look around. Re-think your work-flow. Re-think your personnel structure. Carefully examine what your customer wants, to make sure what you deliver is necessary.

Some of you are already hurting, do not give up hope, rethink. Some of you are thriving, don’t think you have dodged a bullet.