Somewhere between Salt Lake City and Grand Junction this January while climbing a scary mountain pass in a four wheel drive it came to us that a way to look at the CEO’s job is as follows:
To determine how much stress the balance sheet of the company and the people that work for it can handle at this time in the company's life.
You may have a different view of it, or a different way to say it that works for you and we would love to hear from you about how you see it, but humor us for a minute.
It appears at times that even at some pretty large companies that the only person who is really thinking about the future of the entire enterprise is the CEO. Everyone else is in their department looking for more resources, and hopefully in the words of Peter Drucker, focused on the next most important task.
What does this mean for you?
It means you need to be relentless in your pursuit of what is true from your direct reports because they may have an inherent bias to keep you on a consistent drip of flattery and fluff. It also means that having a board of directors that can help you think about the company from the outside is vital.
Questions a good board can help you wrestle with are:
• How much debt should we be working with now to grow the business?
• Where are your next threats coming from?
• What innovations are going to allow you to increase your margins?
• Where is your current leadership team in their own personal life cycles?
The rub is that building and maintaining a productive board of directors is a challenge. Too often it is such a hassle that you don’t even have one. CEO’s can often feel like the coach of a professional sports team. The players on the field are your employees, the fans in the stands are the customers, and up in the owner’s box sits the board of directors. Where does the coach stand? Sometimes they stand alone.
Ask yourself the following question: What is the company telling itself right now that we want to be true, that may not actually be true? Many department heads will be talking about growth because they know that is what everyone wants to hear. The challenge is that if the company doesn’t manage its balance sheet and time the growth correctly outside forces can end up owning the business. You may have a growth mandate, but try as we might most of us can’t make water go uphill, so back up your mandate with facts and processes you can trust and measure. This rigor and dialogue can save your business.
Consultants can bring diversity of thought to a company, they also bring new terminology that at first glance may not make sense. We use a customer acquisition framework (CAF) to describe how a business wants a potential customer to learn about, and then accept its offer. It might be called sales and marketing and in other places it’s called marketing and sales. Regardless, the biggest change we have noticed in this area are the options available to your company relative to just five years ago. That is why it is one of our themes for 2019. It might make sense for you to revisit your strategy.
In 1995 the phone and the fax machine were the money makers, and having a toll free number was a big deal. You might have had a marketing department, but you didn’t know what worked and what didn’t and the magazine ad salespeople were really happy about that.
Today marketing executives can show up to a meeting with real data that tracks and predicts future behavior by your target customers.
What does this mean for you?
It means you have more leverage with your marketing dollars and your sales team. Just ten years ago you were still guessing with your marketing dollars and the sales reps could hold you hostage with the relationships they initiated.
In the House Tour image below think through how far you could have a potential customer get without the help of a sales person? As an owner you have an incentive to get them as far through the house as you can. Get this right and your cost of sales will plummet and your profitability will rise.
Email continues to be the killer app for developing and maintaining a respected position with your clients, customers and prospects. Recent data shows that enterprise and individual customers spend the vast majority of their time reading and communicating inside of an email application.
What does this mean for you?
It means that unless you have a business which really wants to attract a customer that it doesn’t know and offer them a commodity (think owning a McDonalds franchise) you don’t really need to spend a ton of money on social media. Your best course of action is to have a well-developed email communication plan that integrates with your website and sales team.
The frequency of your email communication should depend on the type of service or product you are delivering. It can range from a travel service emailing you multiple times a week, to an estate planning law firm that shares its findings once a quarter. If you want our advice on what your cadence should be, click here.
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Drew Sanders Blog
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