5 Tips to Being an Effective CEO
Brian grew up in business. His dad, Ronnie, started the manufacturing firm, his mom, Marge, ran much of the administrative and financial aspects of the company, and family life revolved around the company.
Brian studied engineering and earned his degree. After college he came back home and went to work for the family business, quickly proving himself to be one of its most talented engineers. With Ronnie’s tight grip on the company and Marge to back him up, the company grew sales to over $15 million per year. And then tragedy struck. Brian’s dad died.
It was then that with no leadership team in place and a culture that had learned to lean heavily on Ronnie for key decisions that the company was at real risk of failure. Brian was a great engineer, but with the loss of his father he was pushed into a role of running the whole company, something for which he wasn’t fully ready.
Brian considered selling the company for his mom. He didn’t want to do anything wrong that might jeopardize her future. But he also believed in the business, and felt that with a better map, he could lead it through this critical test.
This is when I first met at one of my business owner conferences, and he became a business coaching client. The situation that Brian faced was an extreme one, but what it highlights is how most business owners were never trained to be a “CEO”. They started their business because they were talented at the core function of what their company made or produced. This could be a physical family of metal parts like for Brian’s company, or this could be a service offering.
Here are my top five tips to be a better CEO that I wished someone had told me a few years into the operation of my early companies.
Tip #1: Clarify the big picture.
What business are you trying to build? Which markets are you working to serve? Which markets are you choosing to not serve at this time? What products or services are your most profitable? You’re most sustainable? What are your core company values? What does your company stand for? What is the culture you envision for your company? You get the idea. One of your core functions as a CEO is to ask the big questions and make sure you reinforce the answers with your team (see tip #4 below.)
Tip #2: Establish your written quarterly action plan for the company.
Here is the link to an earlier article I wrote on creating your company 1-page plan of action. As CEO you need to make sure your company has clear priorities and defined plans – quarter by quarter. I’m not talking about a fifty page strategic document that no one ever looks at again, instead I’m coaching you to create a rolling series of 1-page quarterly action plans for your company. What are your top three focus areas? What are the definite criteria of success for this quarter in each focus area? What are the main action steps or milestones to accomplish that success criteria in each focus area this quarter?
Once you’ve done this for a few quarters I encourage you to get your key department leaders to create their own “department” 1-page quarterly plan of action too. Not only does this help them focus on those fewer things that will make a bigger difference for the company, but it will also give you a blue print for accountability for them and their department.
Tip #3: Hold your company accountable to acting on its priorities, stated goals, and values.
Your company only has so much time, talent, money and other resources. It needs to invest these in those fewer, better places that will make a real difference. It’s your job as CEO to consistently hold your company accountable– yourself included – to act daily in accordance with these priorities.
For example, in Brian’s company they recognized that if they could reduce the design time for new products from the historic 36 months it took from decision to make product “X” to the first production line coming off their assembly line and ready to ship to their customers, it would mean about $250,000 per year per product of additional profit for their company.
Changing behaviors is never easy. For Brian’s company it took two years of gentle pressure applied relentlessly until they were able to consistently reduce their design time to less than one year.
As CEO you are the champion pushing your company to hold true to its priorities, goals, and values.
Tip #4: Find creative ways to say the same message in fresh ways.
To have the impact you want you need to keep your message consistent. But if you don’t add some creative variation to the mix your team may just start to tune you out. So pull out the stops.
Implement a new award… Establish a new tradition… Give out a funny gift to emphasize winning behaviors you want to be repeated… Tell stories – new and old – that mythologize and promote the qualities and behaviors you want your team to absorb.
Do this intentionally. Do this passionately. Do this creatively. And do this consistently. This is not a sprint, it’s a marathon.
Tip #5: Build and groom your leadership team.
Perhaps the most important job you have as CEO is to build and develop your leadership team. Who will you eventually need on your leadership team? Who do you already have on your team? Are there any glaring holes? Any people you’ll likely need to upgrade?
Think through on paper at least twice a year what skills, talents, and qualities you need from your different leaders on your leadership team, and what experiences you want to help them get over the coming six months so they can grow their capabilities as leaders. This is a multi-year job and the stakes are very high.
So there you have the five most important tips about being a CEO that I wished someone had told me when I first took on that role at my early companies.
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