Small Business CEO

The Army used to have a slogan “We do more before 9am than most people do all day”. In other words, the Army is for hard working, disciplined soldiers. If you want to be like everybody else, stay in bed.

If you want more reasons to get up early, remember what Ben Franklin said “Early to bed and early to rise makes a man healthy, wealthy, and wise.”  We all want to be healthy, wealthy and wise!

Getting up early is one of the keys to building a successful business. Most successful CEOs I know get up very early. Some workout and go to work, and some just go to work.

There are a lot of reasons to start your day early:

• A CEO’s day is usually devoted to serving other people, like customers and employees. The only way to get your job done is to do it before anyone gets to the office.
• Most people perform better and think more clearly early in the morning.
• Getting to work early gives you quiet time to focus.

Action
Create the habit of getting up early for 30 days in a row. Make a commitment to get up early and stick with it. The first few days will be tough, but eventually your body will adjust to the new sleep cycle and it will become a habit.

Competitive Intelligence (CI) is the process of gathering and analyzing information about competitive products, services, websites and marketing activities and using this information to make business decisions. CI tools can help small businesses keep tabs on competitors and decrease response time to changes in competitive strategy.

CI is used to make a business more competitive relative to its existing competitive set, as well as potential customers.  Most CI is typically actionable information that can lead to a business response:  If a competitor lowers prices, you could lower prices too;  If a competitor starts a blog, you could subscribe to their blog, and maybe even start your own blog.

Most small businesses don’t have a formal, systematic process in place for collecting and disseminating competitive intelligence. But there are some competitive intelligence tools that every business should utilize.

Competitive Intelligence Tools

•  Google Alerts  This CI tool sends you email updates when the keywords you enter show up in search, news or blogs.  You can keep track of competitors, people, products and more.

One of the most important jobs you have as CEO is to get employees to do what you ask them to do. But getting things done through other people can be challenging, especially as the tasks becomes more complex.

There are four different types of tasks, based on complexity:

1. One Step Tasks (answer the phone, respond to emails, take orders, go to meetings)
2. Process Tasks (follow company processes, use checklists)
3. Judgment Tasks (use personal judgment, act in the best interest of the customer and the company)
4. Personal Initiative Tasks (make suggestions, add value, go the extra mile)

While most employees can handle 1, 2 and 3 pretty easily, some employees will struggle with personal initiative. If you give employees a checklist to follow, most will follow it step by step. But if you ask an employee to invent a better way of doing business and write it up in a report, most employees will fail.

This is less a reflection on the employee, and more of an issue of setting realistic expectations. It’s not your employee’s job to reinvent the wheel. It’s your job. But when you need to make a significant change, you need employee involvement.

This is where employee “buy in” comes in. It’s human nature to resist change. Learning or doing new things requires a lot of energy. To get employees to take initiative and embrace change, you need buy in.

Reasons People Don’t “Buy In”

• Resist change
• Lazy
• Fear of failure
• Fear of more accountability
• Poor communication of why the change is necessary
• Poor communication of what’s expected

As CEO, the two things that you can control and manage are:

• Communicating why the change is necessary
• Communicating what’s expected

To get employees to buy in, it’s your job to paint a picture of why the change is necessary and what’s in it for them. Then you have to clearly communicate what is expected, how things should be done, and how results will be measured.

Making Big Changes
If you have a big change to make, like a “new way” of doing business, you cannot just announce the new way to your employees in the Monday morning staff meeting. You have to give the change the specialized attention it deserves.

It’s best to create a new way of doing business with input from the people it will affect most - your employees. This requires communication, as well as time and energy on your part. When people are asked for their input, they are much more likely to embrace change - even if all of their suggestions are not incorporated into the ‘new way’.

Micheal Gerber, the author of The E-myth Revisited, paints the picture by referring to the old way as “the old company” and the new way as “the new company”. This language makes it pretty clear that things are going to change and change in a big way.

When you pursue a major change, it’s important that you succeed.  Your credibility as leader and CEO is at stake.  If you request major changes and things don’t change, you lose all credibility.

Action Steps for Big Change

• Only make changes that are worthwhile
• Convince employees of the need for change
• Show employees how not changing will hurt the business
• Give employees the tools the need to make the change
• Clearly communicate what’s expected
• Provide a role model for change
• Reward employees for making the change
• Measure the progress of change regularly

Making Small Changes
Making small changes is a little easier, but getting employee buy in is still key. And the best way to get people to buy in is to ask for their help and their input.

Action Steps for Small Change

• Ask an employee for their help (asking is better than telling)
• Convince employees of the need for change
• Give employees the tools the need to make the change
• Assign the employee the responsibility for change
• Clearly communicate what’s expected
• Follow up

I got an email yesterday morning from a customer who was looking for a sales contract to sign.  It’s not a huge job, but it’s not a small job either.  I have been really busy, but I am never too busy to send out a contract - especially to a customer that is ready to get started.

So I emailed him back, and I promised to send a contract out by end of day.  Things got busy and the day got away from me.  I got a huge headache, and I was about to go home when I remembered the promise I made.  I sat down and cranked out the invoice and contract, despite my headache. Promise kept!

My head was killing me, but I have a simple principle I try to live by - keep my promises to customers, employees and family. If I didn’t keep my very first promise to this customer - sending the contract - why should he believe that I would keep subsequent  promises after the contract was signed?  He shouldn’t.

We’ve all done business with that flashy sales guy that promises the moon and never delivers.  It’s always someone else’s fault or maybe it was the weather.  Eventually, that guy gets a reputation as ‘all talk and no action’.  If you own a small business, you cannot afford to be that guy.

Conversely, people are amazed if you are really on the ball.  So few people juggle everything well.  But when you under promise and over deliver, people remember.  When you go out of your way to exceed people’s expectations, they remember.

What do you want to be remembered for?  What do you want your reputation to be?

Asking the right questions can lead you to work on the right things in your business.  While there are many different ‘things’ that make a business work, here are some basic business health questions that every CEO should consider: 

• What is the most profitable area of your business?  What is the least profitable area of your business?
• What do you do better than the competition?  What do you do worse than the competition?  Why do you lose business to competitors? 
• What are the key business drivers that most impact your financial outcomes?
• What are the key business drivers that most impact customer attraction, conversion and retention?
• Where has your business improved and gotten stronger?  Where has your business declined and gotten weaker?
• How would cash flow change if the outstanding accounts receivable average was reduced?
• If you had to stop doing one thing or selling one product or service, what would it be and why?
• What are the best-case and worst-case scenarios for launching a new product or service this year?
• Who are your best customers, and who are your worst customers?  What traits do they share in common (pay higher price, pay on time, refer business)? 
• How can you attract more of your ‘best’ customers?  How can you increase the loyalty of your best customers? 
• What is your customer turnover rate?  How can your reduce customer turnover?
• If you were selling your business, what would you do to make your business more appealing to an investor? 
• What steps can you take to maximize your personal wealth and to improve your lifestlyle (more time off, more fun, less stress)?
• As CEO, where do you waste your time doing the wrong things?  Where do you spend your time doing the right things?  How can you do more right things?
• What are your strengths as a leader?  What are your weaknesses as a leader?  How can you improve?
• What are your top 3 goals for the next quarter and the next year?

There is a big difference between leadership and management. A famous business author once said, “Managers do things right, while leaders do the right thing.” As CEO, your job is to work on the right things (lead) and to make sure things are getting done right (manage).

Managers
Managers focus on maximizing the output of the organization. They organize, plan, staff, direct and control.

Leaders
Leaders provide vision and direction to a company. They choose the battlefield and create the battle plan. They define the values of an organization and the operating principles.

Traits of an Effective Small Business Leader

1. Set Standards of Quality - clearly define what you expect from others. Put it in writing.
2. Communicate / Be Direct - tell people what you think. Your employees cannot read your mind.
3. Hold Others Accountable - provide feedback on employee performance. Don’t be afraid of conflict.
4. Live Your Values - people need to know what you stand for.
5. Tell Stories - paint pictures for people. Be personable.
6. Keep Your Promises - do what you say your are going to do, when you say your are going to do it. Or don’t say anything at all. If you don’t keep your commitments to employees, they won’t keep their commitments to you.
7. Lead by Example - do what you expect others to do - come in early, stay late, keep your desk clean, take notes in meetings, follow up on requests, keep your promises, stay organized.
8. Sweat the Details - if you don’t sweat the details, no one else will. The buck stops with you.
9. Work Hard - be the first to come in and the last to leave. Do whatever it takes to get the job done. Go the extra mile and don’t take shortcuts.
10. Demonstrate Self Discipline - do the things that are hard to do.
11. Learn - read, read, read. Know more about your industry than anyone else.
12. Be Nice - people buy from people they like, and they work hard for people they like too. Your employees don’t owe you any loyalty - you have to earn it.
13. Be Healthy - take care of your body. It’s the only one you have. Your health directly impacts your energy level and your energy level directly impacts your businesses growth.

“Anyone can become angry - that is easy. But to be angry with the right person, to the right degree, at the right time, for the right purpose, and in the right way–this is not easy.”

Aristotle

According to Wikipedia, emotional intelligence “describes an ability, capacity, or skill to perceive, assess, and manage the emotions of one’s self, of others, and of groups.” What a great skill to have as CEO! So how can you develop this skill? Why not learn more about emotional intelligence (EI).

The following is an excerpt from Time Magazine’s article on Emotional Intelligence, called “The EQ Factor”, by Nancy Gibbs:

“The researcher invites the children, one by one, into a plain room and begins the gentle torment. You can have this marshmallow right now, he says. But if you wait while I run an errand, you can have two marshmallows when I get back. And then he leaves.

Some children grab for the treat the minute he’s out the door. Some last a few minutes before they give in. But others are determined to wait. They cover their eyes; they put their heads down; they sing to themselves; they try to play games or even fall asleep. When the researcher returns, he gives these children their hard-earned marshmallows. And then, science waits for them to grow up.

By the time the children reach high school, something remarkable has happened. A survey of the children’s parents and teachers found that those who as four-year-olds had the fortitude to hold out for the second marshmallow generally grew up to be better adjusted, more popular, adventurous, confident and dependable teenagers. The children who gave in to temptation early on were more likely to be lonely, easily frustrated and stubborn. They buckled under stress and shied away from challenges. And when some of the students in the two groups took the Scholastic Aptitude Test, the kids who had held out longer scored an average of 210 points higher.”

The point of this illustration is that those that have the ability to delay gratification demonstrate that their reasoning brain has power over their impulsive brain. They have what psychologists call “emotional intelligence”. It can be argued that people with high EI have more self discipline than those with low EI.

As CEO of a small business, shouldn’t we all work be aware of our own EI? How do you rate yourself in these areas?

According to authors Cary Cherniss and Daniel Goleman, emotional intelligence consists of four domains and twenty competencies. The four domains are: self awareness, self management, social awareness and relationship management.

Self Awareness - a deep understanding of one’s emotions, strengths and weaknesses, an ability to accurately and honestly self-assess.

Self Management - the control and regulation of one’s emotions, the ability to stay calm, clear and focused when things do not go as planned, the ability for self motivation and initiative.

Social Awareness - the ability to consider employees’ feelings in the process of making intelligent decisions either on a one-to-one basis or as a group.

Relationship Management - the ability to communicate, influence, collaborate and work with colleagues.

Check out The Emotionally Intelligent Workplace: How to Select For, Measure, and Improve Emotional Intelligence in Individuals, Groups, and Organizations by Cary Cherniss and Daniel Goleman to learn more about EI.

“My dreams are worthless, my plans are dust, my goals are impossible. All are of no value unless they are followed by action.”  -  Og Mandino

A good business strategy is useless without good execution. The challenge for most small business CEOs is that they know what needs to be done, but they don’t always execute.

Top Excuses for Not Executing

• Time - I don’t have time to get everything done; I wear too many hats
• Urgency - I have too many fires to put out to work on non-urgent Q2 tasks
• Delegation - I can’t rely on other people to do the important things
• Disorganization - I am too disorganized to follow up and hold others accountable

Every CEO must create a culture focused on execution. Without it, your business will stagnate or die.

As CEO, creating a culture of execution starts with you. Do you communicate the goals of the business clearly and often? Do you delegate important tasks and give others new opportunities and challenges? When you delegate, do you communicate what’s expected and follow up at regularly scheduled intervals? Do you hold others accountable when they drop the ball? Are you accountable for your promises and commitments to employees and others?

If you answered ‘no’ to any of these questions, what is your plan to change?

Accountability starts at the top - with you. If you know what you expect from your employees, but fail to communicate your expectations, you will not create a culture of execution. If you demand accountability from others, but fail to keep your own commitments, you will not create a culture of execution. Communication and accountability are the keys to creating a culture of execution.

How To Create a Culture of Execution (Business - Big Picture)

• Value - Create worthwhile business goals that employees buy into
• Realistic - Set goals that are attainable within a short time period (weekly, monthly, quarterly)
• Measurable - Set goals that are quantifiable and measurable
• Systematic - Create a system to measure key business goals

How To Create a Culture of Execution (Employees - Individual Responsibility)

• Leadership - As CEO, you are the example of accountability, so track your commitments and keep your promises
• Responsibility - If a goal requires a team effort, assign one employee responsibility for accomplishing the goal
• Accountability - Assign employees with a realistic number of goals, based on their workload and other commitments
• Acceptability - Give employees the opportunity to define the time line for achieving the goals they accept as their responsibility

Action Items

• Communicate the goals of the business clearly and often to all employees (paste them on the wall if you have to)
• Reward all employees when big picture goals are achieved (i.e. annual sales goals)
• Reward individual employees when important personal goals are achieved

Habits

• Review the progress for each assigned goal weekly or monthly (quarterly reviews are too long to hold people accountable)
• Follow up verbal commitments from employees in writing (i.e. after meetings, send a summary email of the commitments made by each employee)

There are two types of managers: 1) managers obsessed with control and oversight into what’s going on, and 2) managers that are focused on progress rather than perfection.

Watching the Ball
Managers that try to measure and control everything like to ‘watch the ball’. They focus on measurement systems and make sure everyone is following the rules. They hold a lot of meetings, read a lot of reports, and provide a lot guidance on how things should be done.

Moving the Ball
Managers that are more focused on progress, rather than perfection, like to ‘move the ball’. They understand that a great website launched today is better than a perfect website launched six months from now. They understand that the goal of a business is to meet or exceed customer needs, and getting that done is what’s most important.

As with most things in life, balance is important. It’s important to pay attention to what’s happening, but it’s even more important to make things happen. If you lean one way or another, lean toward ‘moving the ball’.

Personality profiles are a great tool for employee selection and development. Personality tests can measure if there is a fit between a job candidate and a specific job, if people are task oriented or people oriented, if people are organized or disorganized, if people are introverted or extroverted…

In addition, there are job skills tests, which measure a persons skill with software or technology.

The bottom line - personality tests help improve employee selection and development.

Three of the most popular personality profiles are:

• The Berke Assessment
• The DISC Profile
• Meyers Briggs

The Berke Assessment
The main difference between The Berke Assessment and other tests is that it measures an employee’s fit for a specific job. This is unique among other personality profile tests.

The D.I.S.C. Profile
The DISC Profile is a tool for understanding behavioral types and personality styles. It tests behavior across four primary dimensions - Dominance (driving, decisive), Influence (optimistic and outgoing), steadiness (empathetic and cooperative), and conscientiousness (concerned, cautious & correct).

The Meyers Briggs Profile
This test measures where people fall on a personality type scale: introvert -extrovert, sensing - intuition, thinking - feeling, judging perceiving.

Action Items

• Choose a personality profile tests and administer it to your employees
• Test all job candidates before a job offer is made
• Use the test results to put employees in the right job